HD DVD Vs BLU RAY
Toshiba's HD DVD format lost over to Sony's Blu-ray format. The Blu-ray took over the HD DVD on the grounds of its technical compatibility and marketing strategies. On19, February 2008, after the official announcement by Toshiba regarding the discontinuation of HD DVD business clearly depicts the picture of Blu-ray won over HD DVD format.
In buyer-seller relationships, the focus has moved beyond individual firms to value- creating networks formed by key firms in the value chain that deliver value to end customer. “We can no longer just look the firm independently in the whole environment but to step back a little so that we can see the value creating networks more clearly. The actor bonds, resource ties and activity links” (The Future of Competition, Prabakar Kothandaraman and David T. Wilson) between the firms in the market construct a value- creating network which is based on the resource and capability they have. This is what the strategy adopted by the Sony to Compete the Toshiba's HD DVD.
How Sony Applied the Marketing Strategy
Based on the relationship marketing, Sony discovered the market, discovered the potential firms who can take its product to the lead and find it where all these firms are standing in the whole business environment. So instead of moving into a direct competition with HD DVD, Sony builds the network of firms which compete against the other network of firms. Although the HD DVD technology maturated earlier while its cost is also lower, then also the Blu- ray has a large camp of partners, especially with the movie studios. Some of the big firms of Sony's network are Panasonic, Philips, Samsung (electronic industry), Apple and Dell (computer industry), Fox & Disney (entertainment industry). And the reason behind this large network of firms found to be better marketing and negotiation skills of Sony. Consequently, Sony is the company which involved in both electronic and entertainment market. In the matter of fact, Sony owns three of the “eight biggest” brand of the particular market and that is what enables the Sony to have huge advantage of this war between HD DVD and Blu-ray.
Delivered Value to the Customers
Value is always the most essential element and the determinative factor for the success in business wars. In fact, the situation here is more like a chain-effect; it is the emerging of a new type of technology that triggered all the market structure's changing. The only goal based on this next generation high definition technology is to make the old ones improved further. So although there are two camps based on different technology in the market, both of them aimed for the same goal: more capacity and higher definition, better sound quality and interactions. “However, the real value is the relationship between the competing market offerings and their respective price” (The Future of Competition, Prabakar Kothandaraman and David T. Wilson). So with the help of more advanced technology and strong relationship network, Blu-ray seems to perform better by its larger capacity and higher quality of the image, sound and interactions.
The capability is based on the resource owned by the companies. But as both groups are filled with big ones, so from the financial perspective, it was not the main factor which made difference. However, both groups has very strong and qualified R&D team and facilities, Blu-ray proved to be more competent relying on the larger capacity and better effectiveness. Although it is not to say that Blu-ray technology is absolutely better than HD DVD but it just means that Blu-ray has more potential capability to the market. So what we can see here is that, what really makes difference is neither the cost nor the benefit which stands for the value, but the capability of the firms which can deliver it with the better performance than the competitors. In this case, the matter is more about the relationship management and marketing strategy. So by doing better in relationship management and marketing strategy, the blu-ray camp, led by Sony which has lot of good reputation and experience in these fields, succeed in beating the HD DVD camp led by Toshiba.
Blu ray also won the battle on the ground of its technical compatibility:
ROM single layer: Blu-ray has a capacity of 25GB as compared to the 15GB of HD DVD.
ROM dual layer: Blu-ray has a capacity of 50GB as compared to the 30GB of HD DVD.
Highest test: Blu-ray has a highest test of 100GB as compared to 60GB of HD DVD.
Theoretical limit: Blu ray has a theoretical limit of 200GB, whereas HD DVD only has a theoretical limit of 60GB.
Being better in technology & R&D facilities is alone are not sufficient to survive in the market for long-run. Especially when your competitor also possesses the same technological competence. In this case of HD DVD and Blu-ray, the main reason of HD DVD lost over to Blu ray was lacking of effective relationship management and marketing strategies which was effectively used by the Blu-ray. As a result, Blu-ray completely took over the HD DVD format.
3) Chris Murray, The Marketing Guru