iRobot is the leading home robot company with over 60% of the global market share. However, its market share is decreasing and it faces threats from expiring patents, low visibility, and competition. Its proposed strategy is to pursue focused differentiation by improving customer value through enhanced marketing, R&D, services, and new product lines to maintain its competitive advantage. Its strategic objectives are to increase revenue to $3 billion by 2022 while maintaining over 60% of the global market share through defensive actions and an emphasis on its role as a pioneer in the smart home ecosystem.

1. IBE2- Michael Saram
Group F
Trần Thiện Khang An
Phạm Minh Hiếu
Nguyễn Thị Quỳnh
Thoa

2. Video introduction

3. Outline • Current situation
review
• Strategic issues
• Proposed direction
• Proposed performance
targets
• Strategic options
• Proposed strategy
• References

4. Current situation review
Vision Statement:
Making practical robots a reality
Mission Statements:
Empowering People To Do More

5. Current situation review

6. Corporate resources
Finance From 2015 - 2018, iRobot’s revenue more than two-third from
$616.8 mil to $1092 million.

7. Value proposition
Who: Niche Target Market who has income of %50,000+, home owner, married career women, Single
Business Men, Ages from 30-60.
What: Home Cleaning Robot
How: improve safety world-wide, improve quality of life, create early stage of innovation lifecycle.

8. Business model

9. pestel
Factor Trend Evaluation
(Threat = T;
Opportunity = O)
Impact
(1 = low;
5 = high)
Rank in term
of
importance.
Political 1.Trade war between China
and US - current manufacturer
located in China. Trade barriers
with potential trade partners like
China would harm iRobot by
preventing potential exports.
2.Tariff will be raised on
Chinese Goods to 30% will
demotivate iRobot from
maximizing their profits.
3. The risk of military invasion
by hostile countries may cause
divestment from venture
4. Laws related to data privacy
are continually changing and
evolving in unpredictable ways.
O
T
T
T
5
3
1
4
1
4
2
3

10. Economical 1.Business Cycle Stage (e.g. prosperity,
recession, recovery)
2.Inflation/Employment/Foreign
exchange/interest rate & stability of host
country currency.
3. Labor Market condition.
4. Global expansion strategies of iRobot
Corporation are influenced by the financial
market efficiency as operating in highly
efficient financial market leads towards
improved liquidity position and strengthened
ability to enter new markets.
5. Education level in the economy
O
O
O
O
T
5
3
3
5
5
1
4
5
3
2

11. Social 1. Demographics and skill
level of the population
2. Culture (gender roles,
social conventions, etc.)
3. Leisure interests
O
O
O
4
3
5
2
3
1

12. Technological 1. New technology leaves old technology obsolete.
2. Social media marketing
3. Technological innovation and development level.
4. R&D on technology and impact on cost
structure/value chain.
5. By using third party for manufacturing, there is
no guarantee that iRobot will prevail on other
patent infringement claims against third parties.
Third parties may also design around iRobot
proprietary rights, which may render iRobot
protected product less valuable.
6. Cannot assure that iRobot product do not
infringe patents held by others or that they will not
in the future.
T
O
T
O
O
T
5
5
3
3
5
2
1
5
4
2
3
6

13. Environment 1. Current business depends solely on
consumer robot sales.
2. Weather and climatic conditions
3. Attitude towards eco-friendly
products.
4. Recycling and waste management
5. Renewable Technologies
O
O
O
O
O
3
3
5
4
4
5
4
1
2
3

14. Legal 1. Inadequate means of protection
in proprietary rights which
competitors may independently
develop technology that is similar
to iRobot.
2. Legal protections afford only
limited protection for iRobot
Technology. Laws in many of Asia
countries do not protect iRobot’s
proprietary rights to as great an
extent as do the laws in United
States.
3. Some of iRobot competitors
seek to compete primarily through
aggressive pricing and low-costs
while infringing on iRobot’s
intellectual property.
4. Data protection,
5. Consumer protection laws.
6. Employee protection laws
(discrimination, health and safe)
T
T
T
T
T
T
2
5
2
1
3
2
3
1
5
6
2
4

16. swot Strengths
● Distribution and Reach
● Dealer Community
● Financial Position
● First mover
● Set company apart through value-added
features
● Corporate Alliances
Opportunities
● Social media
● Increase in average household income
● User Interest in Technology
● Capture new opportunities in the smart
home ecosystem
● Educating marketing program
● Technology stair climbing
Weaknesses
● High day sales inventory
● Low current ratio
● Expiring Patents
● Low Visibility & Scalability
● Low Competition.
● Lack of strategic planning
Threats
● Fuel price rises
● More substitution products
● Technology development of rivals
● Piracy
● Government Policies changing
● Volatility of Supply Chain.

17. PORTER’s FIVE FORCES
Threat of Potential New Entrants
- The economics of scale (weak force)
- The product differentiation (weak force)
- The capital requirements (weak force)
- The access to distribution networks (strong
force)
- The government policies (weak force)
Bargaining Power of Suppliers
- The number of suppliers (weak force)
- The product that these suppliers provide
(weak force)
- The suppliers do not contend with other
products within this industry (strong force)
- The suppliers do not provide a credible threat
for forward integration into the industry in which
iRobot Corporation operates (weak force)
- The industry in which iRobot Corporation
operates is an important customer for its suppliers
(weak force)
Bargaining Power of Buyers
- The number of suppliers (weak force)
- The product differentiation (weak force)
- The income of the buyers (weak force)
- The quality of the products is important (weak
force)
Threat of Substitute Products or Services from Other
Industries
- There are very few substitutes available for the
products that are produced in the industry in which
iRobot Corporation operates (weak force)
- The very few substitutes available are of high
quality but are way more expensive (weak force)
Rivalry Among Existing Firms
- The very few competitors have a large market share
(strong force)
- The industry in which iRobot Corporation is growing
every year and is expected to continue to do this for a few
years ahead (weak force)
- The fixed costs (strong force)
- The production of products (strong force)
- The exit barriers (strong force)
- The strategies of the firms (strong force)

18. Strategy is this well-suited in 2018?
2. Intensive Growth Strategies (Ansoff)
- Product development
- Market penetration
- Market development
1. Generic Competitive Strategies (Porter)
- Focused differentiation
3. Strategic Actions/ Enhancements
- Offensive actions
- Defensive actions: 1000 patents
- Timing: First mover
- Scope: M&A

19. Resources and capabilities

20. Price/
Quality
Product line breadth
1
2
VC Industry
1. iRobot
2. Shark
3. Neato
4. Ecovacs
5. Eufy
6. Dyson
7. Samsung
8. Cecotecs
9. Panasonic
Strategic group mapping
3
6
4
5
7
8
9

21. COmpetitive strength assessments

22. COmpetitive advantage
Competitive advantage:
● Big reputation
● Huge market share
● High tech
● Quality
● Features
This is a sustainable advantage or not? => Yes

23. Strategic issues
- Decrease in market share
- Piracy
- Expiring patents
- Low visibility & branding
- If rest on its laurels following this trend losing 20-30% within 3 years

25. Proposed directions
Proposed directions in the upcoming years:
- Piracy => Commitment to protect campaigns stress on privacy right
- Decrease in market share => Solve Competitive price threats from rivals
- Expiring patents => Defend patents
- Low visibility and branding => Improve marketing activities
- Be known for the pioneer of Smart home ecosystem

26. Proposed performance target
Financial Objectives Strategic Objectives
Short-term Long-term Short-term Long-term
By the end of year
2020, revenue of irobot
is expected to be $1.5-
2 billion
By the end of year
2022, revenue of irobot
is expected to be $3
billion
By the end of year
2020, Customer self-
service rate of irobot is
expected to be 97%
By the end of year
2022, Customer self-
service rate of irobot is
expected to be 99%
By the end of year
2020, gross profit of
irobot is expected to be
$1 billion
By the end of year
2022, gross profit of
irobot is expected to be
$ 1.77 billion
By the end of year
2020, global retail
market share of irobot
is expected to be 59%
By the end of year
2022, global retail
market share of irobot
is expected to be 63%

27. Strategic options
using QSPM
Generic Competitive Strategies (Porter)

28. Intensive Growth Strategies (Ansoff)

29. Strategic Actions (Enhancement)

30. Strategic Actions (Enhancement)

31. Proposed strategy
Focused differentiation

32. DIFFERENTIATION ADVANTAGE ( USING VALUE CHAIN)
Step 1. Identify the customers’ value creating activities.
Step 2. Evaluate the differentiation strategies for improving customer value.
Step 3. Identify the best sustainable differentiation.

33. ● Marketing and sales:
○ Celebrity endorsement
○ Support wholesale by discount/ PR events
○ SEO, viral contents on Internet
○ Marketing ads to promote the message of keeping data safe(improve
convertible rate) / about functionality & superior performance
○ More technical videos
○ Build a good sales team
● R&D:
○ Improve old features like UV sterilization, wifi connect, map
○ Come up with new ones
● Services:
○ Have discount/ gift for defects
○ Answer and support quickly to call/messages
○ iRobot HOME app

34. Products and services development
(Sell new products to existing customers)
=> Add variations to current products like size, colors, technical
features, design
=> Focus on improved functionality and superior performance
=> High quality inputs
=> Cloud services, Smart Home Ecosystem Service,

35. - Timing: First mover
- Defensive:
+ continue to defend its expiring patents
+ introduce new product lines Braava Mops, Terra Mows, Root
Educates
+ challenge quality of competitors’ products
- Scope:
+ Horizontal integration: acquisition of companies in China
:Proscenic, Haier
+ Acquisition of foreign distributors like SODC and Robopolis
Strategic actions

36. Question and answer
Before we get started:
- Keep the question short
- 30’
- It is recommended that everyone asks 1 question
- Priority goes to those haven’t asked in lesson 4

37. References
Williamson, D. (2018, Dec 5). iRobot Corporation SWOT Analysis. Retrieved from: https://www.essay48.com/term-paper/2909-iRobo
Corporation-Swot-Analysis
iRobot. Overview. (2016, Aug 4). iRobot Roomba 900 Series [Video file]. Retrieved from: https://www.youtube.com/watch?v=XIPzSm
Turnipseed, D. & Gamble, J. (2018). iRobot in 2018: Can the company keep the magic?. America: University of South Alabama
Kohorst, A. (2012, Nov 8). iRobot. Retrieved from: https://prezi.com/swxgfa_fra6h/irobot/
Murphy, E. (2018, Nov 20). iRobot Corporation Porter Five Forces Analysis. Retrieved from: https://www.essay48.com/term-paper/29
iRobot-Corporation-Porter-Five-Forces?fbclid=IwAR32NVBkcm1TWNWdPTSFzEhjlSq31upwd_AAqD2SzaFHvmwwfMlcclqYmHY
Stephens, R. (2019, Jan 8). Why iRobot Has High Growth Prospects. Retrieved from: https://finance.yahoo.com/news/why-irobot-hig
prospects-203448263.html

38. iRobot. (2019, April 8). Notice of Annual Meeting of Stockholders and iRobot 2019 Proxy Statement. Retrieved from:
https://investor.irobot.com/static-files/afe34f92-c23f-4b64-b377-fb37788c0648
iRobot. (2019). Static files. Retrieved from: https://investor.irobot.com/static-files/cd40f151-aede-4047-a24f-7e14d317723dEufy. (2019
Retrieved from: https://www.eufylife.com/products/642/575/cleaning
Samsung. (2019). All vacuums. Retrieved from: https://www.samsung.com/us/home-appliances/vacuums/all-vacuums/
Dyson. (2019). Vacuum products. Retrieved from: https://www.dyson.com/search-results.html?searchText=vacuum&from=product
iRobot. (2019). Roomba. Retrieved from: https://www.irobot.com/roomba
Neatorobotics. (2019). Botvac connected series. Retrieved from: https://www.neatorobotics.com/vn/robot-vacuum/botvac-connected-s
Ecovacs. (2019). Deebot robotic vacuum cleaner. Retrieved from: https://www.ecovacs.com/us/deebot-robotic-vacuum-cleaner/
iRobot. (2019). Investor Presentation. Retrieved from: https://investor.irobot.com/static-files/cd40f151-aede-4047-a24f-7e14d317723d
Oracle. (n.d.). Improve Customer Satisfaction and retention; maximize efficiency. Retrieved from:
https://cloud.oracle.com/_downloads/WhitePaper_CSS_38_Rightnow_Customer/rightnow-customer-stories.pdf
Yahoo Finance. (2019). iRobot Corporation (IRBT). Retrieved from: https://finance.yahoo.com/quote/IRBT/balance-sheet?p=IRBT
Byrne, T. (2018, Sep 23). iRobot Corporation Value Chain Analysis. Retrieved from: https://www.essay48.com/value-chain-analysis/2909-i
Corporation-Value-Chain-Analysis