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The failure of Garmin’s Nüvifone series through the lens of absorptive capacity

Langhorst, Patrick (2014) The failure of Garmin’s Nüvifone series through the lens of absorptive capacity.

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Abstract:During the last decade it has become easier, cheaper and handier to be navigated by using cheap and free navigation applications for the so-called ‘smart phones’. At the same time it threatened and put pressure on navigation system producing companies, like Garmin. Exposed to decreasing sales and revenues in the navigation sector, Garmin decided to enter in a strategic alliance with ASUSTeK in order to create a smart phone (“Nüvifone”) itself to compete in the market. After being two years in the market and poor market sales of the Nüvifone, Garmin decided to cease the collaboration with ASUSTeK and to focus on the development of navigation apps for Android and iOS devices instead of investing more money in the Nüvifone. This paper focuses on the reason behind the failure of Garmin’s smart phone by making use of the theory of absorptive capacity. Absorptive capacity looks at a firm’s capabilities to recognise external signals for a change and then use this information to develop a new product or service. This study found that in fact there was a lack in Garmin’s absorptive capacity that lead to low market sales at the end.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/65291
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