Microsoft Word - Case Study 2 (VIZIO)_Questions (S1, 2020).docx FIN80002: Case Study 2: VIZIO, Inc. Question 1 (40% weightage) Explain VIZIO’s advantage in terms of cost leadership and product...

Answer to Question 1
VIZIO was founded by William Wang in the year 2002 which made flat panel televisions at cheaper prices. VIZIO was able to be in the top three companies in North America as the company was able to deliver the products at a cheaper rate maintaining the quality of the product. The company’s operating expenses was very less as the company partners with a company based in Taiwan for parts and assembling the flat panel television. VIZIO partnered in vertically integration. At the starting, the companies like Sony was selling a flat screen television at $9,000 and Wang aimed at selling the same at $2,999 which was a huge challenge for him. Amtran Technology Co. Limited, a Taiwanese company purchased 8% and 15% stake in VIZIO in the year 2004 and 2005. VIZIO focused in distribution channel and technological support call centers. The overhead cost of VIZIO was 0.7% of sales which was 10% to 20% for the competitors. The lower cost and the profit margin helped the company increase its turnover drastically. Panel and chipset were the two main components which made up approximately 94% of the total cost of a...