Case Digest 6 - INRX - Course taught by professor Lubitz PDF

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Karen Hung 90036013 MGMT 178 May 15, 2018 Case Digest #5 – INRIX As a consultant to INRIX’s founder, Bryan Mistele, what do you see as their technology strategy and do you concur with it? What would you advise him as to whether INRIX’s strategic position and capabilities sufficiently differentiated the company from competitors and potential entrants in the field of “Big Data”? What are their strategic options and which one(s) do you think they should they choose? Why? Being a company in the real-time traffic information industry, INRIX had to rely heavily on their ability to crowd source, to analyze, and to distribute the data they gather to their customers in order to differentiate themselves from the competition. Many of the companies in the industry compete based on their accuracy of the data they provided. In addition, these firms had to compete to provide real-time traffic information in the largest number of countries possible, which makes it easier for companies to attract global customers. When INRIX first started, Mistele’s objective for the company was to create inexpensive, specific task-oriented devices. When deciding on the business model for the company, Mistele realized that the traffic data at the time was sparse, and he had found an opportunity to change the model for collecting traffic data. Their technology strategies have several different aspects to it. First, being in the real-time traffic information industry, INRIX also had to price differentiate themselves in order to provide competitive pricing like other firms. One way the company does this is through building partnerships with well-established firms in the industry to grow its network of GPS transmission and data gathering. The Tele Atlas deal continued to provide the company with proper distribution networks via their partnerships with Clear Channel. Another way INRIX differentiated themselves from other firms in the “big data” field is to leverage their platforms. The CEO recognized that although the traffic data is the same, different

industries require different sets of use for the data. Thus, he was able to sell targeted information services and decision support systems across multiple distribution channels. He had created vertical businesses and diversified the company’s revenues. For example, for the automotive industry, INRIX provided them with complete sets of operating systems, software, and additional products to complement their needs. For the public sectors, Mistele noticed that the industry values data analytics. For the media, they require the data knowledge INRIX collected to do weather reports or traffic updates. As the company builds, they find themselves in a situation where they needed extra resources to expand and grow. It is within their goal to eventually become a global company that reigns in the realtime traffic information industry. As a result, INRIX has two strategic options that they can choose from as they move forward in the industry. The first option was to go public. With limited current competitors and a growing market opportunity, going public will provide the company with the financial resources they needed to expand further. The second option was to negotiate a sale. After seeing how much Navteq and Tele Atlas were bought for, it is very likely that INRIX will also sell for a valuation in the billiondollar range. I think the company should choose the second option to negotiate sales. Considering the nature of INRIX, I do not think they are ready to expand even further. The company started out with small amount of personnel and required little structure governance. If INRIX decides to go global, then the managerial, organizational, and governance decisions they face will very likely end up endangering the company. Although Mistele and his board of directors are more than capable of running the company, it is still hard to say how well they will adjust to the change once the company goes public. Also, if INRIX was acquired by a larger and more well-established company, they would be able to adapt the business structure of such company rather than building it from scratch like how they would if they go public by themselves. The adjustment period will be shorter than going public and the strategic advantages they can gain from selling with be greater also....