This company got sued because of a 500-megabyte discrepancy. Find out how you can avoid making the same mistake!
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Tuesday: Return Driven Strategy |
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Professor Joel Litman and Dr. Mark L. Frigo explained this framework in detail in their book, “Driven.” Today, let’s look at a case study related to the eleventh tenet of RDS: Communicate Holistically. Continue reading to know how you can craft a clear and effective communication strategy for your product or service.
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This company got sued because of a 500-megabyte discrepancy. Find out how you can avoid making the same mistake! Have you heard about Graphics Processing Units (GPUs)? The GPU is a chip specifically designed for rendering videos and images. Commonly associated with gaming, GPUs are also used in machine learning, video editing, and cryptocurrency mining. With the GPU’s wide range of applications and usage, tech companies have attempted to capture the lion’s share of the market, which requires innovations in price and performance. In 2014, a tech firm designed a GPU that became popular with consumers because of its price and performance. Unfortunately, it got sued because of a communications mistake.
The NVIDIA Corporation was founded in 1993 by electrical engineers Jen-Hsun Huang, Chris Malachowsky, and Curtis Priem. The company began as a firm specializing in the design of multimedia expansion cards used in personal computers (PCs). Back then, the central processing unit (CPU) of PCs was responsible for graphics rendering. Because of an increase in the popularity of image and video rendering programs, separate graphics adapters were sold to consumers. NVIDIA made a name for itself when it launched the GeForce 256 in 1999. According to Thomas Pabst of popular tech publisher Tom’s Hardware: “Buyers of GeForce will indeed get the fastest and most advanced 3D-chip out there and the pleasure to run games on GeForce may grow as new and demanding games show up on the scene.” Pabst’s words were prophetic for the tech industry as a whole. PC gaming surged in popularity at the start of the 2000s. Seeing this development, tech firms ramped up the development of newer and better GPUs to accommodate increasing demand. Tech companies like ATI Technologies and 3dfx Interactive competed with NVIDIA for market dominance in the 2000s. However, the competition became a two-horse race when NVIDIA acquired 3dfx in 2000 and in 2006, Advanced Micro Devices (AMD), a semiconductor company, bought ATI. AMD’s presence in the market led to a fierce rivalry with NVIDIA. The competition between these companies gave way to numerous technological innovations, with both firms diversifying the applications of its GPU technology by developing hardware for digital content creation, machine learning, and scientific computing. By the end of the 2000s, both firms were at a stalemate. NVIDIA was just as good as AMD in designing GPUs. However, the market went through a fundamental shift in 2014 when NVIDIA released a new line of GPUs. The GeForce 900 Series The GeForce 900 series was immensely popular with gamers and tech reviewers, and went toe-to-toe with AMD’s Radeon 200 series.
The GeForce GTX 970 received critical acclaim as it ran every game at buttery-smooth frames to the delight of gamers. Unfortunately, NVIDIA made a mistake in its marketing. According to information shared by NVIDIA to gaming magazine PC Gamer, the GTX 970 came with 4 gigabytes of video random access memory (VRAM). In reality, its VRAM was partitioned into two chunks—3.5 gigabytes and 512 megabytes. The VRAM stores textures and other graphical data processed by the GPU. This can affect the performance of computer applications such as video games, video editing software, and computational software. In the case of the GTX 970, its memory partition didn’t affect gaming workloads, but glowing reviews about the performance of the GPU wasn’t enough to shield it from the marketing mistake it committed. In 2015, reports about the actual VRAM capacity of the GTX 970 surfaced. Because of this, NVIDIA was heavily criticized by consumers for releasing inaccurate specifications for its product. In fact, more than 11,000 people signed a change.org petition that sought refunds for affected customers. … but that’s not all. In the same year, a group of complainants sued NVIDIA for a class-action lawsuit because it released inaccurate product specifications. In 2016, NVIDIA settled the class-action lawsuit filed against them. The total amount the firm paid was undisclosed. However, court documents show that the firm agreed to compensate each complainant with USD 30. The company also covered attorney fees that amounted to USD 1.3 million. A Lesson in Clear and Accurate Communication NVIDIA’s marketing mistake is an example of a firm that failed to communicate holistically. According to Professor Joel Litman and Dr. Mark L. Frigo, high-performance firms understand the importance of communications in all aspects of business operations. This principle also applies to marketing products and services. Effective communication can make or break a company’s product and reputation. In NVIDIA’s case, the GTX 970 was a great offering held back by poor marketing. … and while the product’s performance mitigated the adverse effects of the firm’s communications mishap, it shouldn’t be an excuse to not take communications strategy seriously. Keep these tips in mind when crafting a communication strategy for your product or offering:
A thoughtfully-created communications strategy for every offering is one of the hallmarks of a high-performing firm. A business that can state the correct value of its offerings fosters trust and confidence among its customers. Hope you found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Tuesday’s Return Driven Strategy! How do you see yourself 5 years from now? Learn more about the importance of being in the right job or choosing the right career strategy in next week’s article! |
