Archive for February, 2008

When I first read the column in my local paper about Blue-Ray winning over Toshiba, I could not believe the battle was over so quickly. It’s almost similar to a prize fighter hitting the other fighter so hard that they don’t even stumble. They just fall.

In the case of HD VS BR, Toshiba had taken the strategy that a great product with consumer demand will position themselves as the major technology for the next generation of players and DVDs. BR took the position that if they secure the major players who produce the product, i.e. movie producers, then they’d win no matter what the consumer wanted.

And they were right.

So right that the USD $119 HD player will now be replaced with a $400 product. One that does not connect to the internet, download trailers and allow the viewer to see bonus content such as the director/actor commentary. This while the moving is playing in the background. The product is also lacking the ability to shop for product shown in the feature film.

And they still won.

BR won because they used alliance strategy as their main approach and not product features. BR is included with PlayStation 3…10.5 million sold. They connected with Sony pictures, Walt Disney, and Fox. Both Universal and Paramount were HD partners.

In the end, however, it appears that even though BR won, Toshiba might also have won. Toshiba and Sony have been talking for months and immediately after the announcement of the concession, Toshiba and Sony made public that Toshiba will be purchasing several chip factories that produce the Cell processors and RSX graphics chips for $835 Million. The chips are a key component in Sony’s gaming systems, and by creating this relationship, Toshiba will be moving from supporting Xbox with Microsoft to now working with Sony. The joint venture between the two will start in April of 2008.

In the US, a similar strategy, except with a slightly different twist is happening on the political front. Presidential candidates Obama and Clinton have almost the exact same arrangement. Obama has over 1 million “consumers” donating small amounts of cash to his campaign while Clinton has larger contributors.

The deal to secure state wide governors mirrors the background talk between Toshiba and Sony. Lots of talk voters don’t know about.

In the end, what the public ultimately sees is void of the talk that you never knew what went on in the background.

No matter what strategy you pursue, it’s important to see the following…

1. The better product does not always win….ex: Apple, VHS, The Tucker car…it’s often the strategy behind the launch that makes all the difference.
2. There is no right way, however, there is a need to understand that it’s up to decision makers to choose a strategy AND then to watch what’s happening in the real world and adjust accordingly.
3. There are options to the tactics implemented, and no one can give any guarantees.