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TASER
International Inc.
Case Analysis:
Cody L.
Zack M.
Joe M.
Samantha B.
Justin M.
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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
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
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
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
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
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
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
4. The pepper spray business is arguably the biggest competition to TASER. MACE
5. TASER devices are subject to regulations although most of the products are not
and Explosives. There are still restrictions regarding the sale and use of electronic
Hawaii, Massachusetts, New Jersey, New York, Rhode Island, and the District of
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
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
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
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
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
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
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
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
weapons, and accessories. This allows TASER to generate revenues from multiple
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
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
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
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.
customers
3. Increase Research and Development- Research and develop new technologies to give
4. Reorganize internal structure- reorganize the internal structure to give TASER a new
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
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
By using both the Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix
the IE Matrix tells us that TASER should hold and maintain its position and focus on market
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 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
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
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
Citations:
https://www.fool.com/investing/2016/12/28/3-reasons-taser-
international-inc-stock-could-fall.aspx
https://securitysystemzone.com/percentage-of-households-with-
security-cameras
global-stun-gun-market-2017-2021
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