Technology Presentation - Avigilon

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Avigilon Presentation The Best Evidence™ York University, Technology Management Course Group 2 – Fall 2014

Transcript of Technology Presentation - Avigilon

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Avigilon – Presentation

The Best Evidence™

York University, Technology Management Course Group 2 – Fall 2014

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Agenda

Introduction of the company and founder

Technology strategy

Innovation performance

Competitive dynamics

Issues and recommendations

Conclusion

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Introduction

Canadian company founded by Alexander Fernandes in 2004.

Designs and manufactures high-definition surveillance solution systems

Hardware and software designed in Canada Some manufacturing facilities in Canada

Intro. video

http://www.youtube.com/watch?v=MKYz6cJw61U

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About the Founder

Fernandes: Founder, President, CEO, and Chairman

20+ years of experience; very successful Avigilon IPO

Previously founded Q-Imaging, and sold it

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Business model• Airports• Casinos• Schools• Prisons• Banking• Public

venues

Marketing of global HD and megapixel (“MP”) digital video surveillance systems, video analytics and access control equipment

HD video surveillance solutions & complementary

products

• Digital surveillance systems and/or complementary products

• Customizable end-to-end video solutions

Superior protection for customers through innovation

2000+ integrators supported by inside sales

Delivering high customer ROI

• R&D • Technical and software engineers • Sales and marketing

• Skilled personnel• Financial

resources• Patents

Open Platform: • Sony, Samsung, Panasonic,

Sanyo, and others • Network alliances

Business Model

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Dominant Design

HD micro dome cameras

• Smallest dome camera in the industry

• Unparalleled image detail

• 30 images per second at full resolution

Image Megapixels

• Industry innovation: Architectural innovation from VGA cameras to Pro HD cameras.

• Internal innovation: Incremental innovation – successively improved innovations; increasing megapixels

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Industry Architecture

Industry Architecture -

Loosely coupled

Appropriability regime

Weak Strong

Industry Architecture -

Tightly coupled

Appropriability Regime

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Technology Strategy

https://www.youtube.com/watch?v=QAqh8JXqqoE&list=UUH1g3jEVqwdpK-zF6GG_OQg&index=28

Dome Camera Video:

• Competes on a dominant design basis; an end-to-end surveillance system

• Also supplies complementary products

• Sold through a network of “integrators.”

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Technology Strategy –

Collaboration

Key alliances for compatibility and reduced R&D:Less market confusionSynergistic “best effects”

1. Joined Lenel Open Access Alliance Program

2. Became member of global Open Network Video Interface Forum (ONVIF)

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Technology Strategy –

Collaboration cont’d.

Pros: Cons:Building relationships with experts in their field

Private benefits to alliance partners

Value-added interactions Possible appropriation

Co-opting other competitors One-way knowledge transfer

All-In-One System

PTZ Dome Camera

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Technology Strategy - Integration

Their ACC system easily adapts to conventional ones:

Attract customers with legacy systemsMore scope of product diversificationLeads to a larger installed base

4-Port Analog Encoder

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Technology Strategy –

Acquisitions

Limited resources + need for speed to market, lower costs, less risky

Three key acquisitions recently:

S2 Netbox: integrates access control with alarm & temperature monitoring;

RedCloud Security: patented access control systems;

Video IQ: patented real-time analytics – the future.

Rialto Analytics

Access Control

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Technology Strategy – Network

Externalities

Alliances & acquisitions increases the installed base.

Less compatibility issuesComplementary product demand – self reinforcing

Complement Products: cameras, lenses & enclosures; recorders; access controls; video analytics software; encoders; joystick keyboards; Ethernet accessories.

Joystick Keyboard

Recording Device

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Technology Strategy –

Patent Policy

Uses proprietary design & technology patents:

Technological Trade Secrets for ‘special’ inventionsOpen platform integration; maximum compatibilityAcquired companies with solid patents

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2010 2011 2012 2013 2014 (9 months)

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

3,003,0004,043,000

6,410,000

11,770,000

17,905,000Yearly R&D Costs

Rounded Totals

Cost

s

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Technology Strategy –

S-curves

Video Analytics

Digital ACC System

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Innovation Performance

Input measurement:1. Skill level of the labour pool2. Investment in machinery & equipment3. R&D development

Output measurement:1. Patents 2. New products 3. Speed to the market

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Labour Pool

Skill Level

• Labour pool education• Increase in employee

related payables• Increase in G&A

company expenses

R&D Development

• R&D expenses: • Increased by 81% from

2012 to 2013

• R&D plans:• Continue to increase

investment in R&D • Main thrust for fueling

growth

Equipment Investment

Input Measurements

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Output Measurements

Patents

• IP Patents achievement

• 25 issued and 109 pending

• HDMS• Video analytics

New Products

• New product sentiment

• HD digital Cameras

• Analog video encoders

• Avigilon Control Centre

• LPR/NPR Model

• Customized accessories

Speed/Market

• Easy Installation

• Fewer cameras needed with ACC

• Access to sales channels

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Competition

Market expanding rapidly

Highly fragmented market• Low barriers to entry• Low market concentration (small to medium

sized players)• Compete on differentiation (niche market) &

economies of scale

Analog HD digital Surveillance systems are major catalyst for growth

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Major Competitors

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Competition cont’d

Bosch & Axis both have bigger R&D Budgets

Avigilon lacks a razor blade business model

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Industry Acquisitions

Industry Acquisitions

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Current Issues

1. Management issues:• CEO conflicting with management staff• Departure of key executive members• CFO Bradley Bardua’s resignation sent shock

waves

2. Stock Market performance:• No dividends to shareholders• Majority of revenues ‘plowed back’ into R&D

innovation• Fluctuating stock prices

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Low $14.85High $34

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Recommendations

Ambidextrous (Explore & Exploit)

1. Explore:• New markets, APAC (Asia Pacific),

LATAM (Latin America)• Expand business development

2. Exploit:• Speed, control and cost• Further potential alliances

Increase Brand Awareness: Trade shows, marketing and strategic advertising

Razor blade business model

Avigilon - "The Best Evidence"

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