Text: Better Business s1

Video Title: iRobot: Competitive Strategy of Home Robots

Length: 5:37

Classroom Application: Instructors will find this video helpful in the discussion of organizational analysis. Specifically, students should gain an understanding of the importance of a SWOT analysis as well as recognize the appropriate business competitive strategy to employ.

Synopsis

iRobot was started just over 20 years in an effort to bring robots out of the lab and into the real world. They are most known for the iRobot Roomba® vacuum cleaning robot. This product helped to change how people view robots. iRobot continues to develop robotic products to change the way customers include robots in their daily life. As of today, the company has robotic products in over 6 million homes.

Discussion Questions

1. Based on the information presented in the video, conduct a SWOT analysis on iRobot.

Although student answers may vary, the following is a representative SWOT analysis based on the information presented in the video:

Strengths: technological competencies, strong organizational culture, first-mover advantages, strong name/brand recognition, research and development, customer relations

Weaknesses: only in one market (home cleaning robotics), limited product line

Opportunities: many other cleaning options for product development, new customer markets, changing technologies, consumer perception of technology

Threats: low-priced knock-offs, changing technologies, consumer acceptance of technology

2. Which of Porter’s competitive strategies best fits iRobot’s business model?

Although student answers may vary, the competitive strategy that most fits the details of the video would be the “differentiation strategy.” iRobot products are developed to be different. They have created strong brand recognition for their Roomba product. They do not compete based on price, but on the features offered and the uniqueness of their products. Students may make an argument for the focus-differentiation approach since iRobot’s products are targeted to a very specific user group.

3. How would you describe the culture of iRobot? How does this company factor contribute to the competitive approach of iRobot?

iRobot was first started by three MIT graduates. The culture of the company completely revolves around the technology and bringing technology from the institution to daily lives of customers. In the video, Gerry Caron, Director of Production Development, states that “we know who we are.” This statement reflects the strength of the organizational culture. This culture impacts not only product development but also the targeting and marketing of the product. For instance, the products are designed so that they can be “hacked.” Tech-savvy customers are encouraged to redesign the products for their own use. However, technologies are patented so that competitors can’t steal product technologies and create lesser quality products. The belief is that lower quality robotics ruin the perception of home robotics for all competitors.

Quiz

1. All of the following are iRobot products mentioned in the video EXCEPT

a. roomba.

b. verro.

c. scooba.

d. rosie.

Answer: d

Explanation: All are products mentioned in the video except for Rosie (a robot from the Jetsons cartoon).

2. iRobot is a

a. publicly traded company.

b. investor owned company.

c. subsidiary of IBM.

d. None of the above.

Answer: a

Explanation: iRobot is a publicly traded company with all information readily available for investors including financials.

3. iRobot constantly tests the effectiveness of their products against those of competitors. Some of the tests mentioned in the video include

a. the box test.

b. the edge test.

c. the straight line test.

d. All of the above

Answer: d

Explanation: iRobot constantly tests the effectiveness of their products compared to competitors. All of the tests listed above are mentioned in the video as tests used by iRobot.

4. iRobot uses data from which unique source to develop better products?

a. Customer feedback

b. MIT students

c. Computer programs.

d. The military

Answer: a

Explanation: According to the video, customer feedback is a critical input to product development. Customers tell iRobot how to improve the products to make them more effective.

5. According to the video, what is the MAIN reason why iRobot so strongly dislikes cheaper competing products?

a. Because they reduce iRobot’s sales.

b. Because when they don’t perform correctly, they damage the overall image of home robotic products.

c. Because they steal iRobot technology.

d. all of the above.

Answer: b

Explanation: According to Nancy Smith, Vice President of Marketing Communications, the reputation and success of the entire home robotic industry is damaged when consumers purchase cheaper, but ineffective robotic products. Consumers are then less willing to take a risk on other home robotic products and brands.