Case Study

TomTom: Building and marketing a new business concept

19 pages
April 2008
Reference: IMD-5-0735

In early 2008, the top management of TomTom, the world’s leading provider of navigation systems, met to review the strong results of the previous fiscal year. Looking back over the last five years, TomTom’s performance was impressive: The company had created a new industry and its revenues had exploded from €8 million to €1.5 billion However, the business environment was rapidly changing and the management needed to plan the next steps of the company’s future growth. Key issues for TomTom’s management were: How to sustain the company’s growth pace? As the market for navigation systems continued to boom, the company faced more competition and eroded margins. In the near future, a significant piece of its consumer business was likely to turn into an industrial market as more car manufacturers integrate navigation systems into the dashboard. This also raised the question of TomTom’s current business model: how sustainable can it be? How can the Dutch-based company add more services to its product portfolio and having been so successful, how can it prevent its organization from falling into the trap of complacency?

Learning Objective

Developing and launching a product innovation. Creating a new business. Managing growth.

Field Research
© 2008
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