Garmin Case Case Solution & Answer

Garmin Case Case Solution


Garmin was founded by Min Kao In 1989, and Gary Burrellinitiated its operations with the development of Global Positioning System devices in automobiles in Lenexa, KS. By the year 2003, Garmin had become the developer of wearable GPS product i.e. the Forerunner with the calculation competency in distance, pace and time. While during 2007-2008, due to the launch of dashboard navigation devices, the sales of stock prices had dropped causing 87% loss to Garmin and 94% loss to Tom Tom – one of the main rivals of Garmin.

With the discovery of new GPS technologies, Garmin has been the leading product manufacturer in five different segments significantly, such as marine – 13% sales ($442 million) of 2018, aviation – 18% sales ($603 million)of 2018, fitness – 26% sales ($858 million) of 2018, outdoor 24% sales ($810 million) of 2018, mobile or automotive 19% sales ($634 million) of 2018. Due to the expansion of product line to fitness and outdoor space; the share of Garmin did show a significant growth from 11 percent to 50 percent in sales between the 2008 and 2018.

Problem Statement:

Despite the decline in the PND market growth, Garmin has significantly demonstrated growth and increased its sales. But, due to extensive growth of other competitors in the market such as Apple, Samsung and Huawei, the intensity of the competition has been increasing. The PND industry is not only posing a threat of intense competition, but also exhibiting the threat of new entrants in the market,with whom Garmin would have to compete.


Target marketing:

It has been one of the most profitable methods to reach the potential market based on marketing of products in order to increase the sales.


  • Depending on one particular target audience; it provides us with an ability to bypass the majority of the targeted population.
  • It provides an adaptability to meet the demands of a particular population segment.
  • Target marketing ensures a significant increase in ROI.
  • It provides the users with the best option to choose, resulting in improved and better results.


  • Target marketing makes it difficult to attain all the required information from users without the privacy policy’s violation.
  • It might not breakeven because of the unpredictable response of the users to specified advertisements.
  • It takes time to develop marketing communication with the potential customers tending to be time-consuming.

Value-based pricing:

Value-based pricing is all about understanding the needs of the consumers.


  • It significantly provides the real data enforcing into a profit generating price within the existing pricing strategy.
  • Value-based pricing not only benefits the organizational growth but also assists in developing high-quality products with respect to the demands of the customers.
  • Interaction and reviews from customers result in more personalized and considerate services.


  • Although this is a quite simplified method but it takes time to project effective results.
  • 100% accuracy in predicting the average spending of the customers across different regions is not possible.

Differentiation strategy:

It involves creation or manufacturing of high quality products and services in order to distinguish the business from the other players in the market.


  • It allows the company to introduce of new products in the market, providing it an opportunity to be the market leader.
  • If any product is high in demand, the firm has the opportunity to increase its price.
  • The production of competitive productleads the sales of the organization.
  • The consumer range of differentiated products are not significantly price sensitive such as Apple and Samsung.
  • Loyalty of consumers benefits the organization to remain competitive and pose a threat to the new entrants in the market.


  • The introduction of substitute products might hit the market due to lower price ranges negatively affecting thefirm’s reputation.
  • Over differentiation might lead to an increase in the operating cost,making the ROI difficult to cover by premium pricing and loss of customers.
  • Consumers either consider differentiation as a luxury product or have doubts on its credibility.


SWOT Analysis


  • Garmin is an American multinational organization with the capability of leveraging GPS technologies and in-house manufacturing for the creation of trendy and useful products for higher market growth.
  • About half of the aviation market of the United States PND market was controlled by Garmin, and the company was positioned as the second bestplayer in Europe.
  • One of its core competencies involves vertically integrated manufacturing in Taiwan (Xizhi, Jhongli and Linkou), China (Yangzhou) and the United States (Olathe, Kansas and Salem, Oregon) facilities.
  • Production processes of Garmin allows it to maintain a strict process and an efficient management of quality control.
  • It has a workforce of approximately 13,000 employees throughout the world,with their intellectual skills and abilities of creative innovation.


  • Garmin is over-dependent on the North American market for its sales and on sole suppliers,resulting in decline in profit margins.
  • Garmin lacks investment in marketing and advertising the brand to improve its brand awareness.


  • Garmin can significantly initiate a joint venture with the manufacturers of aircraft in order to supply the dashboard upstream.
  • Garmin can bring reduction in the product offerings, and can invest in the research and development in the declining segments.
  • GPS’s modernization with respect to the changes in the support system of the states such as the United States of America.


  • Failure in retaining the competitive advantage in the market might result in declining thesales and profit of product segments or categories.
  • Increase in the competition with existing and new competitors would result in price reduction, reduction in order numbers and loss of market share.
  • Changes in the tax laws would result in consequences of tax for the organization,resulting in financial instability.

Porter Five Forces:


The trends of PND industry tend to be highly competitive due to the variation in the products and geographies diversification. It is believed by Garmin that the principal competitive factor influencing the market growth is based on the product’s design, functionality, quality, reliability, to its brand reputation and customer services. However, Garmin competes favourably with its competitors such as Tom Tom, MiTAC and many others in the market but, due to the use of advanced technological approaches, the intensity of the competition is moderate………..


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