Hippolita Usher 1

Management of Business

Founded in 1989, Garmin spearheaded the use of personal navigation devices in

cars. In the years that followed Garmin far outpaced its nearest competitor; but in June
of 2007 the introduction of the iPhone, coupled with the free Google Maps navigation
app, all but eliminated the need for a separate navigation device. This caused Garmin to
lose over 80% of its market value in just three years. (Knapp, 2018) A plummeting
market share compelled Garmin to set new goals and adjust its plans for the future of
the company. Prudent corporate planning is crucial to the survival of any company; this
involves setting concrete goals and designing a plan conducive to the realization of those
goals. (Robbins, DeCenzo & Coulter, 2014) Proper planning and goal setting is
especially important in Garmin’s case where the need to shift direction to a a new
upgraded course is critical to its longevity.
What role do you think goals would play in planning the change in direction for the
company? List some goals you think might be important.
Explicit goals would benefit Garmin by motivating employees, reducing uncertainty, and
clarifying the company’s direction. Without clear and detailed goals a company has no
defined purpose. (Robbins, DeCenzo & Coulter, 2014) Setting goals is the first step
towards shifting direction; it allows the company to move forward in an ever changing
market and make the necessary changes to the environment while still addressing the
needs of their core consumers. (Daft, 2008) Garmin’s goals should include adapting to
the changes in technology that threaten their market presence. They need to create their
own navigation app. The goodwill that they have established as a company would serve
them well in this regard, since they are already a trusted name in the industry and thus
would be viewed as more reliable than a free throwaway app. Garmin must also make
changes to their current devices. Smartphones are popular for their multi functionality
and ease of use, Garmin must make changes to their devices that will inspire consumers
to purchase its devices over using the built in option on their phone. More feature rich
devices with faster navigational searches, traffic assistance, and voice activation would
elevate their device above a mere phone application and give consumers a reason to
make the purchase. They must also expand their relationship with car manufacturers
outside of North America and Asia. The European luxury market must be tapped;
Bentleys, Rolls Royce, BMWs, and Mercedes should all come standard with Garmin GPS
devices. Garmin must also penetrate the luxury sectors of the marine and aviation
Hippolita Usher 2
Management of Business

industries and grow its outdoor division. Considering the pace at which the market
moves these goals must be implemented within a year.
What types of plans would be needed in an industry such as this one? Explain why
you think these plans would be important.
The GPS industry necessitates both strategic (long-term) and tactical (short-term)
planning. Above all, these plans must be adaptable in order to face the immediate
challenges presented by a continuously changing marketing environment as well as the
future threats that may arise. (Daft, 2008) The managers will need to outline the steps
each department must take to achieve their production, marketing, and financial goals.
Garmin’s tactical plans should emphasize current operations, examine current market
preferences, highlight potential threats to strategic plans, analyze competitor strategies,
develop arsenal strategies to tackle any unforeseen challenges and set smaller
intermediate goals that can be realized between six months and a year. Garmin’s
strategic plans should strengthen operations, set priorities and determine the areas
which require the most resources and energy. In order for strategic planning to be
effective it must precisely outline the direction the company is headed. It is paramount
that all stakeholders and employees are working towards common objectives and seek to
achieve the same results. The strategic plans should also include the continuous
assessment of the company’s direction and adjustments should be made where changes
inevitably occur.
What contingency factors might affect the planning Garmin executives have to do?
How might those contingency factors affect the planning?
The market environment within the technology industry changes rapidly. This degree of
environmental uncertainty will certainly have a significant bearing on the approach to
planning that Garmin undertakes as well as its ability to meet future commitments.
Planning must begin at the highest organizational level and it must be strategic as well
as tactical. (Daft, 2008) New technology, evolving consumer demands, and other
unexpected challenges may require another change in company’s direction. The length
of future commitments is also an important planning consideration. The time frame for
contracts with partners and introducing new products must be delineated clearly and
provisions must be made for any failure to meet time limits.
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Management of Business

What planning challenges do you think Garmin executives face with continuing to
be the global market leader? How should they cope with those challenges?
Maintaining its position as global market leader will be a constant challenge for Garmin,
as it is with all companies regardless of industry. (Robbins, DeCenzo & Coulter, 2014)
Garmin however has the additional challenge of keeping up with how quickly technology
develops and competition from once completely unrelated businesses. Many feature
rich, multifunction devices such as smartphones and tablets continue to encroach on
Garmin’s market position. Adjustments and counter strategies should always be in the
pipeline. Planning, transitioning, and updating should therefore be ongoing processes.
(Daft, 2008) They must continuously examine the market in which they operate to
detect emerging trends, anticipate potential challenges, and remain up to date on their
competitors. Garmin must also continuously assess their own products, pricing, and
functionality and in some instances fundamental changes to the brand will be necessary.
Conclusion
Setting goals is crucial to the development of any company or organization. In order to
actualize these goals, extensive planning is required. This necessitates establishing a
proper strategy and coordinating resources. Garmin’s goal to remain viable in its
industry has caused it to evolve by forming new partnerships. It must also develop and
integrate a comprehensive set of plans to achieve both its long term and short term
goals. The future external environment is unpredictable and contingency factors cannot
be overlooked if the company desires to transition its systems and structures to meet the
changing needs of the market. Immediate conditions such as inventory and resources
shortages can be rectified promptly but issues such as changing market demands will
require new ideas which must be implemented over a longer period. Managers must be
prepared to make adjustments quickly and efficiently to meet both immediate and
prospective eventualities. As previously stated, remaining a leader in its industry is a
challenge for all companies. There are many issues which may arise to challenge their
position and encroach on their share of the market. In Garmin’s case advancements in
previously unrelated industries now challenge their hold on the market. To compete
Garmin must design and execute major strategic and tactical plans to tackle the many
issues currently affecting their business position.
Hippolita Usher 4
Management of Business

References
Daft, R. (2008). Management (10th ed.). Boston: Cenage Learning.

Knapp, A. (2018). How Garmin Mapped Out A New Direction With Fitness
Wearables. Forbes.com. Retrieved 26 February 2018, from
https://www.forbes.com/sites/alexknapp/2016/09/14/how-garmin-mapped-
out-a-new-direction-with-fitness-wearables/#2dd6c36a27b9

Robbins, S., DeCenzo, D., & Coulter, M. (2014). Fundamentals of management (9th
ed.). London: Pearson.