1 Explain the ways in which relatedness informed TomTom’s post-2008 strategy. Dutch manufacturer TomTom’s fortunes dived in 2008 with sales down 36 per cent to €959m (2014) and profits down 71 per cent to €25.4m (2014). From its peak of $15bn, multinational TomTom’s market value was just €2.3bn by 2015. How did this decline come about and what could management do about it?

Originally a software developer for business-to-business mobile applications and personal digital assistants (PDAs), TomTom became market leader in PDA software in just two years with satellite navigation (Sat-Nav) applications RoutePlanner and Citymaps. In 2002 the TomTom Navigator was launched, providing European customers with an easyto-

use, affordable, portable navigation device (PND) for the first time. Demand was strong for the PND, which was not just a new product but an entirely new consumer electronics category.

TomTom GO, launched in 2004, revolutionised the way millions of drivers got from A to B. Affordable and accessible to everyone, it became the fastest selling consumer technology device ever. Since then, over 75m devices have been sold in 35 countries, guiding drivers over 280bn kilometres.

During 2008 TomTom’s sales fell dramatically due to an increasingly saturated sat nav market, plus smartphone alternatives from Google and Nokia. TomTom was forced to reconsider its business and diversified into fleet management and vehicle telematics, where it is now a recognised leader. TomTom evolved from just a hardware business, selling sat navs to stick on windscreens, to a software and services provider that offered free mapping on smartphones and integrated traffic management systems used by governments to quell traffic and manage roads.

After partnering with Nike on the Nike+ SportWatch, TomTom launched its own TomTom Runner and TomTom Multi-

Sport watches in 2013, to help runners, cyclists and swimmers keep moving towards their fitness goals, by providing essential performance information at a glance. Both have GPS sensors, allowing them to tap into TomTom’s navigation platform. TomTom is now straying further from its roots by launching Bandit, an action camera, to challenge American market leader GoPro. It will contain GPS sensors allowing users to find and tag exciting moments in their video footage, based on speed, altitude, G-force and acceleration. Bandit’s real selling point is its video editing and sharing capabilities