Innovation and New Product Development Case Study

Vizio, US' Low-Price Flat Screen TV Maker: Can It Sustain the Growth Momentum?

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Abstract:
In 2008, US-based flat screen television (TV) maker Vizio Inc was one of the US leading suppliers of liquid crystal display and plasma display panel TV sets. In a short span of time, the little known company had emerged as a strong competitor to established global brands with its low priced yet high quality products. Vizio's lean business model was characterised by low overheads, distribution through warehouse clubs and discount retail channels, and low cost sourcing of TV sets from Asian contract manufacturers. However, as competitors fought back by introducing their own aggressively priced products, and the sales of flat screen TVs expected to be adversely affected due to the economic recession, Vizio's future was uncertain. The case examines Vizio's rapid rise and highlights the benefits and risks of its low price strategy.

Pedagogical Objectives:

• To understand the dynamics of the US flat screen TV industry.
• To identify the key elements of Vizio's business model that contributed to its exponential growth.
• To examine the challenges for Vizio to sustain its rapid growth.
• To analyse the future success of its low price strategy.

Keywords :  Vizio, HDTV (high definition television), Plasma, LCD (liquid crystal display), Am Tran, Low price strategy, Samsung, Digital broadcast, William Wang, Warehouse Club Channel, Costco, Japanese TV manufacturers, Taiwanese flat panel manufacturers, Distribution strategy