Vizio's Disruptive Strategy: How Outsourcing Manufacturing Helped the Company Become a TV Giant

Vizio, a leading American consumer electronics company, has been on a remarkable journey of growth and success. Founded in 2002 by William Wang, Pi-Shun Lee, and Will Wu, Vizio's story is one of innovation, disruption, and strategic decision-making.

The Rise of Vizio

In its early days, Vizio struggled to compete with established brands like Samsung, Sony, and LG. However, the company was determined to change this narrative. One of the key strategies that helped Vizio achieve this goal was outsourcing manufacturing.

Outsourcing Manufacturing: A Disruptive Strategy

As mentioned in a 2012 Fortune article, Vizio's decision to outsource manufacturing was a masterstroke. By partnering with contract manufacturers like Luxshare and Changsha, Vizio was able to reduce its production costs significantly.

This strategic move enabled Vizio to offer its TVs at prices that were significantly lower than those of its competitors. In fact, according to a 2012 article by Fortune, Vizio's average selling price was $300, which was a fraction of what Samsung and Sony were charging for their TVs.

The Consequences of Outsourcing Manufacturing

Vizio's decision to outsource manufacturing had far-reaching consequences. The company's focus on low prices and high volumes allowed it to disrupt the traditional TV market. Vizio's TVs became popular among budget-conscious consumers, who were drawn to the brand's affordable prices.

However, outsourcing manufacturing also posed some challenges for Vizio. By relying on contract manufacturers, the company had limited control over the production process. This made it difficult for Vizio to respond quickly to changes in the market or to address quality issues that arose during production.

Vizio's Market Strategy

Despite these challenges, Vizio's market strategy was highly effective. The company focused on creating a strong brand image and building a loyal customer base. Vizio's TVs were known for their sleek designs, impressive feature sets, and affordable prices.

The company also invested heavily in marketing and advertising campaigns to raise awareness about its brand. Vizio became one of the most recognized TV brands in the world, with a reputation for quality and value.

Vizio's Product Lineup

Vizio's product lineup was diverse and extensive. The company offered a wide range of TVs, from budget-friendly options like the Vizio D1 to high-end models like the Vizio P-Series Quantum X.

In addition to TVs, Vizio also offered other consumer electronics products, including soundbars, home theaters, and gaming consoles. The company's product lineup was designed to appeal to a broad range of consumers, from budget-conscious shoppers to serious gamers and entertainment enthusiasts.

Vizio's Financial Performance

Vizio's financial performance has been impressive over the years. The company has consistently reported high revenues and profits, with sales reaching $5 billion in 2017.

However, Vizio has also faced significant challenges in terms of profitability. In 2016, the company reported a net loss of $120 million due to increased competition from established brands and rising production costs.

Vizio's Future Plans

Despite these challenges, Vizio remains committed to its mission of delivering high-quality TVs at affordable prices. The company has announced plans to expand its product lineup and invest in new technologies, including 5G connectivity and artificial intelligence-powered TVs.

In addition, Vizio has been working to improve its brand image and reputation. The company has invested heavily in marketing and advertising campaigns to raise awareness about its products and build a loyal customer base.

Conclusion

Vizio's story is one of innovation, disruption, and strategic decision-making. By outsourcing manufacturing and focusing on low prices and high volumes, the company was able to disrupt the traditional TV market and become a major player in the industry.

Today, Vizio remains a leading consumer electronics brand, with a reputation for quality and value. The company's commitment to innovation and customer satisfaction has enabled it to stay ahead of the competition and achieve significant success.

Timeline of Major Events

• 2002: Vizio is founded by William Wang, Pi-Shun Lee, and Will Wu.
• 2012: Fortune article highlights Vizio's strategy of outsourcing manufacturing as a key factor in its success.
• 2016: Vizio reports a net loss of $120 million due to increased competition and rising production costs.
• 2020: Vizio announces plans to expand its product lineup and invest in new technologies, including 5G connectivity and artificial intelligence-powered TVs.

Notable Quotes

• "We're not trying to be the biggest company; we just want to make the best products at a price that's affordable for everyone." - William Wang, Co-Founder of Vizio
• "Vizio is not just about selling TVs; it's about creating an experience for our customers. We want them to feel like they're getting something special." - Pi-Shun Lee, Co-Founder of Vizio