Segway Strategy Analysis

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Segway strategy analysis

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Introduction

Segway’s innovative product that had been lauded by influential personalities in the

technology industry failed to achieve the expected market impact. One of the reasons the product

failed to live to its billing is the ineffective marketing strategy employed by the company. This

paper explains why Segway’s product was not successful in the market and what the company

ought to have done to achieve the much touted success.

Segway strategy analysis

By failing to do an extensive market research, Segway set itself to failure. The company

overestimated the market potential of its product (Fleming, 2014, p.24). In essence, Segway

based its success on its innovative technological marvel. Another reason for Segway’s slump in

the market is failure to identify niche markets. Segway ought to have identified niche markets in

which it could penetrate and build its brand. However, the company visualized its product as a

solution in different market segments. It was not clear from the beginning which market could

embrace Segway as the preferred mode of transport. Earlier experiments with mail carriers did

not yield desired fruits.

Segway could have avoided the aforementioned pitfalls if it had carried out a thorough

market research before developing and launching the product. In addition, the company was

wrong in its decision to publicize the product using big corporate personalities even before its

launch. As Porrello and Jones (2006, p.41) opine, the hype machine increased its tempo once the

big names such as Jeff Bezos and Steve Jobs appeared to endorse the product predicting how it

would revolutionize people’s lives. With such levels of hype, there were high expectations

among consumers with regard to functionality of the product. According to Saturley (2006 p.12),

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inasmuch as over-hyping can be good for a product, it could be counterproductive if the hyped

product fails to meet high expectations of the consumers.

Segway’s initial pricing was out of reach for many consumers. By pricing the product in

excess of $4,000, many people could not afford it. Again, Segway failed to balance public

pressure with a realistic view of results. According to Waters and Field (2003, p.25), it is

imperative for companies to take their time before they launch new products to ensure that

customers are ready for them.

Segway’s major undoing was failure to undertake market feasibility analysis. In this

regard, the company could not identify its niche market (Erfourth & Agosta, 2002, p.25).

Another problem was the high price of the commodity. Most consumers could not afford the

Segway’s introductory price. Another problem for the company lies in the distribution of the

product. In the beginning, there were few dealers; hence, people were concerned about the

capacity of the company to service its products after they bought Segway. Again, failure by the

company to build appropriate ecosystem for its product lines meant that people could not

understand how the firm’s products could fit into their lives and environment.

Recommendations

In the view of the above, Segway ought to have adopted a different tact to ensure the

product’s success. To begin with, the company should have established partnership contracts

with existing distributors such as bike shops in order to take advantages of their distributional

channels. Consequently, the bike shops could stock Segway’s products as well as provide after

sales services such as repair, consultation, and maintenance.

Another possible approach the company ought to have pursued is establishing a niche

market. Given the product was unique and an entirely new concept, the company should have

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identified a city or location where most people lived near their workstations. After identification

of this market, the company should have given Segway to a group of people on a free trial for a

few months, based on understanding that they were to use Segway for their everyday commuting

to and from their workstations (Besa, 2015, p.22). This could have been a huge marketing

opportunity for the company, since it would have increased brand visibility. Again, this would

popularize Segway in the particular niche market by providing consumers with ideal alternatives

for short distance movements. By targeting people who live near their workplaces, Segway could

easily replace bikes as the popular means of transport.

Segway’s competitive advantages include its mobility, safety, and small sizes. These

competitive advantages could be utilized in its niche markets (Green & Smith, 2012, p.5). One of

the potential niche markets for Segway is tourism. Ordinarily, people visiting the parks,

monuments, or beaches usually travel a lot, thus, making them tired during the long walks. As

such, Segway could be used by tourists to maneuver expansive tourists’ sites such as the Louvre

Museum, Paris, which is arguably the world’s largest museum with an area of approximately

652,300 square feet. Segway can be a convenient product for tourists since it is equipped with

adequate capacity to enable it maneuver the rough surfaces. For tourists patrolling beaches,

Segway would be a good option. Furthermore, tourists visiting resort sites could use Segway to

move from one point to another.

Another niche is security forces. Given that police are constantly patrolling cities,

Segway could aid their movement. Segway’s mobility could prove crucial for police, especially

those patrolling cities with high traffic such as London, New York, and Paris. Police in such

cities would need a reliable mode of transport that is not captive to traffic jams. Notably,

Segway’s raised platform could provide police with better visibility. Another niche market for

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Segway is golf courses. Golfers usually need to move long distances while in the field. Segway

could be an alternative to golf carts (Besa, 2015, p. 13). Obviously, a golf cart is more expensive

than a Segway. Therefore, golfers who would not afford a golf cart can use a Segway.

Conclusion

Segway is an innovative product with high potential in the market. Failure by the

company to employ the appropriate market strategy is to blame for the dismal market

performance of the Segway product. It is imperative that the company creates an effective

marketing strategy as well as revising its vision and mission statement in order to tap into niche

markets.

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References

Besa, M. 2015, Golf on a Segway: Putting golf in a new perspective, Makati City.

Erfourth, W.P. & Agosta, R.F. 2002, "Feasibility studies", Journal of Construction Accounting &

Taxation, vol. 12, no. 5, pp. 25-27.

Fleming, M.M. 2014, Shopping around: Feasibility studies crucial to success of tribal business

ventures, Oklahoma City, Okla.

Green, K.M. & Smith, M.W. 2012, "An introductory case in feasibility and exit strategy

assessment for entrepreneurship", Journal of Business Cases and Applications, vol. 6, pp.

1-10

Porrello, L.A. & Jones, M.G. 2006, "A Call for Interest-The Segway® Human Transporter",

Institute of Transportation Engineers.ITE Journal, vol. 76, no. 11, pp. 40-43.

Saturley, M. 2006, "Can SEGWAY Fulfill Its Promise?", Business NH Magazine, vol. 23, no.

11, pp. 12.

staff 2002, Postal Service to test Segway Human Transporter in Norman, Oklahoma City, Okla.

Waters, S. & Field, D. 2003, "The Segway Human Transporter: Developed with passion and

principle", Design Management Journal, vol. 14, no. 2, pp. 25.

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