PERSONAL DIGITAL ASSISTANTS
Personal Digital Assistants are available in Italy. The most popular had held devices are Palm Pilots and personal organizers. We were unable to obtain any growth rates in this industry. There are authorized dealers throughout Italy where you can purchase palm pilots. They can also purchase various personal organizers at local computer retail stores. At this time, Italians do not access the Internet via personal digital assistants. 3COM, maker of the palm pilot, recently announced Internet access through their device in the United States with worldwide rollout following. This industry is very fragmented because there are several companies who offer these devices. The threat of new entrants is very high because of rising technology.
INTERNET ACCESS DEVICES
Telecom Italia sells a product called PLAYWEB. This is a set top box this allows Internet access via the television. This is a threat because it’s already an entrant in the market. Omnitel sells the mobile phone, which will offer software that allows you to access e-mail, interactive information services, internet/intranet applications offered on standard WEB services. This is a threat to Philip’s because of the hand held capability and ease of use along with convenience.
SUBSTITUTE PRODUCTS
Canalsatellite and Skyplex offer satellite services in Italy. Consumers purchase a satellite dish and pay monthly fees for service. RAI is a local broadcasting company that offers television shows for local residents viewing. This service is free to Italians who have the proper reception, but RAI chooses the shows that are broadcast. Stream Digital Cable Service and Telepiu offer Digital Television to Italians. Consumers purchase a set top box from the company and pay monthly service charges. Because this is a substitute product it is a threat to Philips because the likelihood of consumers buying more that one set top box or service is highly unlikely.
NEW ENTRANTS
The threat of new entrants is two fold; one if you are referring to the new technologies being invented and offering an alternative and superior product, the threat is great. The Internet and entertainment markets are large, new and volatile. New technologies are continually being positioned to gain market share. The main difficulty will be barriers to entry such as extreme cost, and access to distribution channels.
If you are referring to the country of Italy and who exist there and who doesn’t. And will there be any threats of entry and computation to local markets. Yes there is a threat because the market in Italy is trying to catch up. The country leaders want to have more web usage and now the usage is so low, as stated in pervious sections. The potential is great and Italy being part of the EU will have to open its doors to competition, which will come from all areas and come hard. From all the big players.
INTERNET TELEVISON
The Internet TV segment is consolidated in Italy. There is only one company that we are aware of who offer a product similar to Philip’s WebTV. Since Philip’s has already established their name in Italy, we see that introducing WebTV as being very favorable. We feel that Philips should form an alliance with a local Internet Service Provider, such as, Infostrada to help market its product.
OVERALL RATING AND OPINION
PLAYWEB was the first to be introduced in Italy, we feel that this can be an attractive market for Philips because of the lack of market saturation and maturity. Lack of competition adds another positive aspect for Philip’s WebTV. There currently are no barriers to keep new entrants from the market and costs of substitute product are high. The overall assessment of Philip’s WebTV going into Italy is favorable.
COMPETITOR ANALYSIS
IDENTIFACATION OF COMPETITORS
The main world competitors of the licensed Web TV are Philips, Sony, Mitsubishi, Toshiba and Panasonic (Matsu*censored*a). These companies are major worldwide competitors in many different markets and span many different products. They all compete in the set- top- box arena globally. There exist no Italian producers of WEB TV. However there does exist European, American, and Italian firms that compete in or sell a set top box in Italy. These companies include NetGem, Telecom Italia (Play WEB), WebSurfer, Network Computer (an Oracle and Intel joint venture), Motorola, and Samsung. All of these competitors do not have the “WEB TV” but have either analog or digital set top boxes that connect to the web via a TV and telephone line, cable, or satellite.
In this realm of living room web surfing there are many substitute products and many are already in the pipeline to be rolled out. The first substitute product of course is the personal computer with a modem. The computer companies are an obvious substitute but they are more an alternate solution. Many companies produce these computers; IBM, Hewlett Packard, Compaq, Dell, Gateway, and a host of others. The other substitute products that are actually fighting over who will be in control of the TV are: interactive TV firms, cable companies, satellite provider companies, telephone companies, ISP’s and digital TV manufacturers. This is an ominous and confusing list of substitute competitors. The reason for the confusion is due to the technology aspect and the combination of providing alternative TV usage. But due to joint ventures and alliances between firms that create a new or comparable service that is provided through a TV many previously non competitors are now competing for that TV time. For Instance now a cable company and software firm can form an alliance and now compete against WEB TV.
Possibly, the greatest competitor is inter-active TV systems. These systems are different technologies that allow real time communication between the viewer and the producer of the service.
The next competitor is going to be cable providers. The cable provider with the advent of new digital technologies will be able to provide a multiple amount of services that will compete with set top boxes. They will be able to provide online banking, Internet browsers, and the like but all through a cable service.
The remainder of the competitor’s for the TV will all be in some sort of combination or alliance with each other. For example, an Internet browser, a telephone company, and some new form of technology will form a company. Alternatively, a satellite broadcasting firm and a large computer firm. As long as similar services are provided, competitors exist.
IDENTIFIED CRITICAL SUCCESS FACTORS
Critical success factors are the key factors in succeeding in a given industry, market, and country. While analyzing Italy as a potential market, a list has developed of the major Critical Success Factors (CSF). Along with this list is an explanation.
Name recognition- Italians already familiar with a firm are more likely to believe in other products that company produces
New technology- A company that has a new, better and cheaper product will be able to outpace the competitors.
Technology leadership- If a firm is leading in a sector it will be looked upon as the best and a benchmark which people will want or expect.
After-sales service- Service in Italy is in high demand especially in a field as new and complicated as web browsing.
Market position- A firm that positions itself in one market can easily go to the next or if it can be first to offer a product it has a better chance of making that product a leader.
Advertising program- Advertising is key to Italy as long as it is designed for Italians and their different segments of users.
Cultural competence- This is the ability to understand your consumer based on who they are as a culture and nation.
Product in working form- If the product is ready to be shipped to Italy and no major technical problems exist this is good. WEB TV is only for the American, Canadian and Japanese parameters of TV.
Comparative Strengths of Competitors in Italy
Critical Success Factors Philips Sony Mitsubishi Toshiba
Name recognition 10 8 7 9
New technology 8 8 7 9
Technology leadership 8 8 8 8
After-sales service 9 9 9 9
Market position 8 8 8 9
Advertising program 8 8 8 8
Cultural competence 8 7 7 8
product in working form 0 0 0 2
TOTAL 59 56 54 62
AVERAGE 7.375 7 6.75 7.75
COMPETITORS CSF’s
Name recognition- The two leaders are Philips due to Philips being a European company, and Toshiba being a market mover and better known than Sony and Mitsubishi.
New technology- Toshiba is the leader in this because of their announced expansion in digital equipment and digital set-top-boxes, which will work in Europe. Where as Philips and Sony are digital, they have not announced actions for expansion. Mitsubishi is a close third because of their digital systems.
Technology leadership- In terms of overall leader ship in technology no one has the lead between these firms all are on the cutting edge, and it changes so rapidly on whom is the leader.
After sales service- All these companies under stand the need for continuing service after the purchase and all scored the same.
Market position- Toshiba has the market position in Europe as well as Philips but when discussing Italy they are all some what well established in that area except Italians are a few years behind in their demand for cutting edge products. However, Toshiba is making the move.
Advertising- All these companies spend millions on advertising a year and once they decide to enter Italy with WEB TV or an alternate they will be ready to go.
Cultural Competence- Philips and Toshiba ranked one point higher in this factor only because Philips is a European company and Toshiba actually has a plan for entering Europe and then Italy.
Product in working form- None of the licensees has a WEB TV product that will work in Europe. Only Toshiba has actually started manufacturing next generation digital set-top-boxes for the UK and Italy.
COMPETITOR PROFILES
There are two ways to divide the competitors. The reasons are that competition over the TV involves different industries that are now converging on the individual viewing the TV. They are able to combine technologies to provide these different services such as online banking and smart card technology, email, web surfing, e-commerce and a like. So to say, that the only competitors to Philips are WEB TV licensees is not a very wise decision especially when referring to the European and Italian markets.
The three main competitors are 1. Cable Companies like Canal+ (the huge French Euro wide cable company with 2 million subscribers in Italy alone). 2. ISP’s like AOL (the worlds largest Internet Service Provider with multiple services for the home user) 3. Telephone Companies like Telecomm Italia (Italy’s largest telephone, cellular provider). Each one of these competitors has a huge advantage in part of the product chain. They each can be a major player by providing an essential function to compete with the Web TV and the set top box in general.
sub categories, insert page break then place graphic
Understanding the major categories of the competition take a more focused look at the main set top box/ WEB TV competitors in Italy. We will only focus on the WEB TV manufactures but take notice of the set top box manufactures, Net Gem and Telecomm Italia. These two producers of set top boxes have strong footholds in Italy. Their technology will operate on Italian TV’s with current technology where as WEB TV will be forced to change its technology in order to become compatible.
1. Sony
2. Toshiba
3. Mitsubishi
4. Telecomm Italia
5. NetGem
Sony, Toshiba, and Mitsubishi are global producers of electronics. They compete worldwide in multiple markets: consumer electronics, computing, wireless, and semiconductors. In there consumer electronics division, they produce TV, VCRs, DVD, Camcorders, and Digital versions of these products. Of course, they are all licensee of WEB TV. They all have a presence in Europe and can be considered main competitors. In Italy, all these companies are well known as consumer electronic manufactures. They are all focused on expanding interactive TV across Europe and Italy. As of today, Toshiba has announced a plan of action, where by they will offer digital set top boxes and integrated digital TV for all European networks and parameters including cable, satellite and terrestrial venues. Toshiba’s plan is to offer it first in the UK and then move into France, Germany and Italy. Therefore, out of these main competitors, Toshiba is the main threat but you can never tell what will happen with future generations of a product.
The interesting thing about these competitors is that they are all licensees of WEB TV. They are also scrambling to find that ultimate next generation item that duplicates WEB TV and more. These companies are trying to gain market share in the alternate and substitute products. For instance Philips is a leading manufacturer of digital TV and if they could align with a cable company around an ISP then they will compete against their own WEB TV.
Philips can compete in Italy. The question is can they do it with Web TV. The answer is no. WEB TV can not operate in conjunction with the specs of European TV. Therefore, they will need to change the WEB TV and make it work or form a partnership with a new product. This market moves fast and each of these competitors could end up on top, and win the Italian market. They need the working combinations of a product that serves the Italian community and serves the new European union.
Considering all the available information we give Philips a rating of 7.375 for competitiveness.