December 31st 2009 was a big day for our family room. I went to CostCo around 11am and by 4pm, including a stop at Comcast for an upgraded set top box, our family room had an installed HD LCD TV complete with sound system and blu ray player from a 2 billion dollar consumer brand that started as a 3 person consulting business in 2002.
Imagine ending 2002 as a 3 person consulting firm with a single client. The next year you launch your own consumer brand to basically compete with this multi-billion dollar firm and other huge consumer brands including Sony. You now have 5 people. I hear quite often from CEOs that their space is very competitive or complex. Try being Vizio in 2003 as a new entrant in the flat panel TV market with just 5 employees.
What would be most important to you?
Manufacturing team to build the TVs, Advertising/PR campaign to create a buzz, and an E-Commerce website to sell.
Not exactly, at least not for Vizio.
Quite simply Vizio focused on three types of partnerships combined with excelling on execution of a niche strategy:
Partnership Strategy
1 & 2. High Quality Component Suppliers and Original Design Manufacturers to build the Flat Panel TVs
3. One Large Retailer to carry the Flat Panel TVs
Niche Strategy
Vizio’s niche strategy was to provide high performance flat panel TVs at a reasonable price based on the slogan “Vision Meets Value”.
A perfect fit for their only Retailer in 2003 and 2004 and this Retailer’s customers. The Retailer… Costco.
Flash forward six years, here are some 2009 statistics about Vizio:
* #1 Shipper of LCD HDTVs in United States (Q1 - Q3 2009)
* Vizio HDTVs can be found on more store shelves than SONY in July 2009
* Currently sold in CostCo (since 2003), Sam’s Club (since 2005), Circuit City, Sears, BJ’s, and Kmart (all since 2006), Walmart (since 2007), Canada (since 2008)
* TVs in over 10 million households
Vizio’s staff today, which incredibly is less than 200 people, is made up mostly of customer support and engineers.
The next time you start thinking that your company is too small or your industry is too competitive to create Order of Magnitude value, just walk into the TV section of CostCo (or Sam’s Club or Circuit City or ...)
