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TASER
International Inc.

Case Analysis:

Cody L.
Zack M.
Joe M.
Samantha B.
Justin M.
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Vision Statement: “Our vision is to make the bullet obsolete.”

Mission Statement: “TASER’s core mission is to protect life and to protect truth through

technologies that make communities safer. We are the market leader in the development,

manufacture and sale of conducted electrical weapons (“CEWs”) designed for use in law

enforcement, military, corrections, private security and personal defense. Since our inception in

1993, we have remained committed to providing solutions to violent confrontation by developing

devices with proprietary technology to incapacitate dangerous, combative, or high-risk subjects

who pose a risk to law enforcement officers, innocent citizens, or themselves in a manner that is

generally recognized as a safer alternative to other uses of force. More recently to address

challenges faced by law enforcement officers post-incident, we have developed a fully integrated

hardware and software solution to provide our law enforcement customers the capabilities to

capture, store, manage, share and analyze video and other digital evidence.”

Industry Analysis:

The global stun gun and defense market is expecting to grow 8% over the next few years.

The development of a stun gun with integrated heart monitoring system is expected to help drive

this potential growth. This market is highly diversified and competitive because of the large

number of different vendors around the world. The most important thing is to maintain a good

balance of quality and price. Each of these vendors is constantly trying to increase innovation to

help them expand their geographic reach and grow their market share.
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Porter’s 5 Forces:

1. Competitive Rivalry: Other vendors that have a strong presence in this market include

Euro Security Products, MARCH, Nova Security, and Shyh Sing Enterprise. Other

competitors have very similar quality products, but they do not have the market reach that

TASER has due to their huge presence in the law enforcement industry.

2. Supplier Power: It would be very difficult for TASER’s suppliers to increase their prices

due to the large market and other potential suppliers.

3. Buyer Power: It would be fairly easy for a buyer to switch to a competitor because there

are so many of them. But when it comes to self defense items, most buyers are okay with

spending extra money to have the top of the line equipment.

4. Threat of Substitution: There are other weapons that people use for self defense, such

as pepper spray, but none that work like a taser does. This is the same for the camera

industry as well.

5. Threat of New Entry: It would be very difficult for another company or product to enter

this market. It has taken TASER many years to really get a foothold in this industry due

to the many rules and regulations as well as all of the other competitors.

Opportunities:

1. Law enforcement personnel in over 150 countries have used TASER-brand products.

Half of U.S. law enforcement officers carry a TASER product, but only 1 in 50 officers

worldwide carry a TASER product. There is great opportunity here because of the 49 out

of 50 Officers around the world that still do not carry TASER products when they are on

duty.
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2. One in every thirty-six homes in the United States will be broken into and burglarized

this year according to data from the FBI crime report. Only about 26% of those houses

have any type of security system. So another huge opportunity for TASER is

implementing its security cameras and devices into the very large house industry that

does not have any sort of security system in place.

3. Another opportunity is to attract the customers that use Pepper Spray. Pepper Spray is a

great form of self defense, but not nearly the same as a Taser. Pepper Spray cans can

leak, run out, or you could even end up spraying yourself. If TASER can get these people

that use Pepper Spray to start using tasers instead they will be much better off.

4. The private security business market is one that is very attractive to TASER. This

includes places such as contract security, casinos, gas stations, and many others. All of

these have a need for TASER products.

5. Another opportunity TASER has is through its training program. It teaches all of its

customers how to properly use all of their equipment. With addition to TASER’s

customers, they also offer training to anyone that feels like they need it. If they have their

own security cameras from a different company, they can still take TASER’s security

courses.

Threats:

1. The market size may be shrinking. TASER has reached almost 98% of United

States Law enforcement with its various TASER weapons. That means that

TASERS best days are likely behind them with that extremely high market

penetration. Wanna read what i got?


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2. TASER’s security camera prices are relatively higher than competitor camera

prices. Although TASER owns about 80% of the camera industry, competitors

could potentially chip into that number due to their lower costs.

3. TASER’s revenue grew 31.2% in the first three quarters of 2016. This makes their

stock look much higher than it might deserve. The company has to continue to hit

that growth in order for their stock to remain attractive. That might not be too

easy for them to do.

4. The pepper spray business is arguably the biggest competition to TASER. MACE

Security International and Pepperball Technologies are two of the competitors

although they are not the biggest firms.

5. TASER devices are subject to regulations although most of the products are not

considered firearms according to the U.S. Bureau of Alcohol, Tobacco, Firearms,

and Explosives. There are still restrictions regarding the sale and use of electronic

weapons in many states, most of which apply directly to TASER products.

Hawaii, Massachusetts, New Jersey, New York, Rhode Island, and the District of

Columbia currently prohibit the possession of stun guns by private citizens.


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EFE Matrix:

A score of 2.5 is an average score. We calculated a score of 2.95 which means that we

believe TASER is doing a really good and effective job with exploiting opportunities and

defending against threats. The higher TASER is able to get this number, the better off they are

going to be in the future.


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Management/Organizational Structure:

As of 2015 TASER eliminated the Chief Operating Officer (COO) position to try to increase the

international sales effort. TASER’s international sales have not increased much if at all since the

elimination of the Chief Operating Officer position. The executives that are under Rick Smith

(CEO) are all equal in power and report to him and the leader of the organization. The

company’s values are as follows:

Why we do it matters: We are committed to making this world a safer place.


How we do it matters: We’re out to win, but we’re out to win the right way. We don’t take
shortcuts to simply win the race.
Whether we do it matters: Nothing happens unless you take the first step. We take the initiative
to change the game.
When we do it matters: There is a time and a place for everything, and sometimes you have to
make key trade offs to move the right things forward.
Who you do it with matters: We’re all on this rocket ship together, and when you go on a
mission you want to have awesome, intelligent, hardworking, and caring people with you.
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Finance & Accounting:

TASER’s ticker symbol is (TASR) on the NASDAQ index. The company has never paid out

dividends to stockholders and does not plan on doing so anytime in the near future. TASER is a

mature, profitable, cash generating business. In the years 2013 to 2015, TASER saw an average

of 20% growth in annual revenues growing from $165 million to $198 million in 2014 and 2015.

Cost of Goods Sold increased about 10% or $6.3 million from 2014 to 2015. The increase in

COGS was due to a higher number of unit sales. The decrease in percentage of sales was due to

higher average selling prices and increased leverage of fixed operating costs. The R&D expenses

for TASER increased from $14.9 million to $23.6 million in the years 2014 to 2015 respectively.

This increase was primarily due to the Axon segment of the business. The Axon segment

increased employees needed and saw higher consulting fees as TASER continued to try to launch

new products in this segment in order to strengthen its competitive advantage in developing new

technologies. The company has $60 million of on-hand cash and holds $10 million in revolving

credit which is available for future business investment opportunities. The debt to equity ratio for

the company is 0.78% while the industry average is 68%. This shows that TASER uses little to

no debt to finance its growth, while the rest of the industry does.

Marketing:

Due to TASER’s appeal to many customers to prevent the loss of life, TASER has attempted to

differentiate itself from its competitors through a variety of marketing strategies. The company

has mainly focused on two key target segments, being private security protection and law

enforcement agencies.
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TASER has marketed to Law Enforcement agencies for both its body camera technology

as well as their stun gun products. TASER has reached 17,000 Law Enforcement agencies

around the world and is hoping to expand and become well established in France and Brazil.

TASER’s strongest international markets are the UK and Australia. The company has been able

to penetrate the American market by hosting training classes and through web marketing of their

products. In the recent years, the press and attention that has been drawn to the issues of police

brutality has been very important in the targeting of Law Enforcement agencies for TASER

company.

While the majority of sales come from the Law Enforcement agencies and the military,

TASER has been wanting to expand more into the private security sector. Currently TASER

targets these customers through training programs, print advertisements, and trade shows. The

sales that the company generates from private citizens currently is only 3%, and TASER would

like to see an increase in this number. TASER does have distribution channels for selling to

private citizens and they also offer online ordering of their products.

R&D:

As one of the few weapons not considered to be a firearm, TASER has worked very hard to

innovate their product in order to prevent competitors from entering the market. TASER spends

$10 million on research and development annually. The company has been heavily investing in

video camera improvements. This has allowed TASER to develop a camera with 60 degrees

more than their closest competitors in the viewing range on their cameras. They have also

released the Axon Signal, which turns on to record footage without the user having to turn it on.

The camera senses vehicle movement and the loading of weapons as its cue to start recording.
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TASER is also looking into a drone that could stun potential threats from above as one of their

alternative technological advancements.

MIS:

TASER has a digital evidence management system named Evidence.com, every product works

together as a single network. Completely connected and designed to help police, sheriffs, and

law enforcement agencies everywhere to make the world a safer place. This is the cloud system

that TASER uses to store all of the video and audio data from body-worn cameras. This was the

only public found information system for TASER.

Strengths:

1. TASER has a very strong online presence with 2 distinct websites;TASER.com and

Evidence.com. Customers are able to purchase directly from TASER.com or they can go

through a distributor. Evidence.com is a data storing cloud service for the AXON body

cameras. Evidence.com allows police forces to upload videos to the site and saves them

from having to manage the data themselves.

2. Ability to develop innovative and safe products. By TASER marketing a product that

signifies community safety without the use of deadly force, it is able to meet demands of

customers looking to avoid devastating situations and potential financial liabilities.

3. TASER has chosen great distributors to ensure quality control, service standards and

security. Two of the most notable and reliable distributors for TASER is the U.S. Military

and the U.S. federal government. Distributors are selected based off of their reputations
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and customer base/contact scope. TASER’s distributors allow for a more cost-effective

entry into different regions.

4. TASER has large investments in research and development and large financial growth.

The company has $23.6 million invested in R&D in 2015 and 94 U.S. and 92 foreign

patents. TASER also has had revenues increasing by 20% annually.

5. TASER offers a diverse array of products including cameras, cartridges, non-lethal

weapons, and accessories. This allows TASER to generate revenues from multiple

product segments and diversify their lines of revenue.

Weaknesses:

1. TASER is currently experiencing losses from its AXON products. Better company

organization would help keep its cost down which would improve the companies

financials and hopefully minimize or end the losses from AXON products.

2. TASER has a poor organizational structure because they are lacking a Chief Operating

Officer (COO). With improved management structure, TASER will have more efficient

operations.

3. TASER is in need of an official vision statement. Currently the company does not have a

published vision statement, but on occasion CEO Rick Smith says, “Our vision is to make

the bullet obsolete.”

4. TASER depends a large amount on law enforcement for business. TASER may have a

decent sized customer base within law enforcement but needs to diversify their overall
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customer revenues. Law enforcement is TASER’s main customer and main line of

revenue compared to TASER’s other customers such as; military, personal defense, and

private security customers.

5. TASER currently has high manufacturing and labor costs. The amount of money that

TASER needs to create its products is slowly rising. Again, a change in the company’s

organization could help bring these costs down. This change may require new hires or to

purely reorganize from within.

IFE MATRIX:
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A score of 2.5 is an average score. We calculated a score of 3.1, which means that we

believe TASER’s internal situation is strong. The higher the total strengths and weaknesses IFE

Matrix number is, the better off TASER will be in the future.

Strategies:

Below are our suggested strategies based on our strengths, weaknesses, opportunities and

threats.

1. Domestic Expansion - expand TASER on a domestic level.

2. International expansion- expand TASER on an International level to reach new potential

customers

3. Increase Research and Development- Research and develop new technologies to give

TASER a continued competitive advantage over other companies

4. Reorganize internal structure- reorganize the internal structure to give TASER a new

identity and pursue new goals based on a refined mission statement.


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Space Matrix:

While creating the space matrix for TASER, considering the weapons is the best thing to

do. TASER weapons remain very popular and have a very distinct competitive advantage within

the growing industry. Since TASER has a steady financial income and has achieved very major

competitive advantages within the industry, the company’s weapons are plotted at the (5,1) point

in the aggressive quadrant. Consequently, TASER can take some risks, and one risk that they

should take is to invest in research and development. However, since AXON is taking significant

losses for the company but is still competing well in the industry, the segment is plotted at the

(1,-1) point in the competitive segment.


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BCG Matrix:
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TASER is a company that operates under two different segments: Taser weapons and AXON. It

has been determined that the weapons section falls under cash cows because of the fact that the

weapons are slowly growing at a steady pace, and have virtually no competitors since they are

monopolized by the police forces across the country. AXON, however, is a star because it is in a

fast growing industry and has few competitors, while also accounting for about 75% of all body

cameras worn by police force.

Internal External Matrix:

By using both the Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix

results, a company is able to position themselves on an Internal-External Matrix. This position on

the IE Matrix tells us that TASER should hold and maintain its position and focus on market

penetrations and product development.


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QSPM Matrix:

The QSPM Matrix goes over the strengths, weaknesses, opportunities and threats of

TASER and designates each category a weighted score. The total weighted score will equal 1.

We than rated each strength, weakness, opportunity, and threat for each strategy on a scale of 1-

4. 1 being not attractive for the given strategy and 4 being very attractive for the strategy. We

than would multiply the attractiveness score by the weighted score to get the total attractiveness

score. The sum of the total attractiveness scores for each strategy helped us determine which

strategy was the most attractive to pursue. In this case, enhancing research and development was

the best strategy for TASER to pursue.


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The Grand strategy matrix defines the different strategies to use for companies based on the

company’s competitive position and the speed of the market growth. TASER falls under

quadrant 1 of the Grand strategy matrix because the non-lethal industry is currently growing as

governments are cracking down on the use of excessive body force by law enforcement.

Furthermore, despite a growing global market, TASER does not have any competitors who

makes weapons like TASER. This strategic position allows TASER to further concentrate on the

market it is in, but also branch out in the future into other markets, such as body cameras.

Strategy evaluation

Year 1
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TASER should first look into filling two key positions within the company: the Central

Operating Officer position and the Central Marketing Officer position. Since they eliminated the

COO position, they have encountered a drop in their international sales. Operations and

marketing are essential to TASER’s ability to exist, and it is extremely important that there is

someone at the COO and CMO position. The COO would ensure more efficient operation in all

areas of the business. The CMO would stress a more cohesive marketing strategy for TASER, as

they need improvements in how it advertises their variety of products. Filling these positions

would not require excessive costs, but instead will prove to be rewarding to a business that needs

more efficiency in all aspects.

Once filling those positions of a COO and CMO, TASER will be able to enhance their

product development. TASER can develop a more technologically advanced body camera for

AXON that will allow all police forces to have new technology to utilize. Updating their

technology will make AXON products more appealing to any customer because they will have

more features available. This will give them a competitive advantage over other body camera

companies in the industry. Doing so, they can integrate the new technology with the operating

system that TASER will have with a COO. At first, the costs might be high when releasing the

products but it will also give TASER a competitive advantage in the future. As a result, TASER

will be projected to be more manageable moving forward.

Year 2

Once the positions of COO and CMO are filled, TASER will be on a path to a more

integrated approach to the business with the different departments. They will be able to better

work together which they have not been able to do in the past. TASER should thoroughly test the
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new AXON products that are being created to provide law enforcement officers a high-tech

camera system. This will give TASER a major competitive advantage in the industry and will

also be a good time to test those products on a large scale to see if they find success with the

products. With the new CMO, TASER can make adjustments and improvements when needed

before they fully launch their marketing campaign in the future. The success of year 2’s goal will

depend on how much they spend in year 1. Testing the new products will allow TASER to

modify them and make changes to their business according to the results of those tests. If the

testing does not go as planned, employees will have to adapt to their progress in the R&D.

Year 3

By year 3, the COO and CMO will have a good idea of how the creation of their new

products have impacted their overall level of success. The COO can look to create project teams

that consist of employees from all departments to bring a variety of ideas to the table. TASER’s

new competitive advantage of having better technology will bring more sales to the company

despite the initial high costs of development. Their costs will be lower once they form a steady

process for the creation of the new technology. In year 3, TASER will be ready to fully launch

their products after a year of testing. Their revamped technology will boost their market reach

and will give their brand a better, more reliable and technologically advanced company look.

Year 3’s success relies on the success of year 1 and year 2. They cannot afford to let the

spending done in year 1 to go to waste. The testing and revamping stage in year 2 is crucial to

year 3’s success in putting their new technology in the market.


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Citations:

1. Hoium, T. (2016, December 28). 3 Reasons TASER International,

Inc. Stock Could Fall. Retrieved April 10, 2018, from

https://www.fool.com/investing/2016/12/28/3-reasons-taser-

international-inc-stock-could-fall.aspx

2. Percentage of Households with Security CamerasSecurity System

Zone. (2017, May 05). Retrieved April 10, 2018, from

https://securitysystemzone.com/percentage-of-households-with-

security-cameras

3. Global Stun Gun Market 2017-2021. (n.d.). Retrieved April 10,

2018, from https://www.technavio.com/report/global-defense-

global-stun-gun-market-2017-2021

4. Taser (AAXN) Financial Ratios. (n.d.). Retrieved April 10, 2018,

from https://www.investing.com/equities/taser-intl-ratios

5. http://www.mergentintellect.com.wsuproxy.mnpals.net/index.php/search/co

mpanyDetails/832176382

6. http://web.a.ebscohost.com.wsuproxy.mnpals.net/ehost/pdfviewer/pdfview

er?vid=8&sid=59a1795c-16b1-4a29-a1a5-28467a244c97%40sessionmgr4010