consumer marketplace
iRobot was competing in a new and emerging market. Although the industry had relatively low competition, analysts believed iRobot needed "more competition, not less, to help build up the total scale and visibility of the fledgling industry it had been pioneering." If the demand for the home robots became stagnant or declined, this would greatly impact the vitality of iRobot and put it under pressure to remain innovative and adaptive to consumer needs in the event that it did gain widespread popularity.
iRobot's consumer products were primarily a luxury supplemental good gauged toward the middle and upper class. iRobot's home cleaning robots were reasonably priced from 11-12,depending on the model and accessories. such a price range was comparable with luxury brands of vacuum machines. however, times of economic recession could prove to be problem for iRobot's consumer goods sales given that discretionary budgets have contracted. To save money, iRobot's base customers may revert to manual labor.
Supply chain
For many year, irobot and only two China-based manufacturers to produce its home cleaning robots and had no long-term contract with either of those companies. Its best-selling Roomba 400 series and Scooba series, for example, were both produced by jetta at a single plant in china. This put irobot in high-risk situation if Jetta was unable to deliver products for any unforeseen reason, or if quality started to dip below standards.
Fortunately, irobot was awear of the problem and signed a new manufacturing agreement with u.s.-based jabil Circuit. This relationship would provide irobot with numerous benefits, including diversifying key elements of its supply chain, providing geographic flexibility to address new markets, and expanding overall capacity to meet growing demands, explained Jeffrey Beck, president of irobot’s Home Robots Division. Whether this attempt to diversify its supply chain with a new partnership will work out is of crucial importance for irobot.