Sensormatic Case Study Essay examples

1322 Words Oct 4th, 2011 6 Pages
Sensormatic Case Study

September 15, 2011
CASE HIGHLIGHTS: (Key points, events in case relevant to study topic)
Sensormatic manufactures, markets, and services theft detection devices and pioneered the merchandise security business. Its current manufacturing operations occur at Deerfield Beach plan between two separate departments of systems production and tag production. Sensormatic currently purchases polypropylene and ABS parts from Canon Plastics and Piedmont Plastics for its alligator, half alligator, and other tags. Now it is evaluating whether to make or buy plastic parts while at the same time considering the adoption of a radically new process technology to make 'throw away' tags that would simplify assembly and is
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* Financial implications(economic, investment, transaction, design/production/ delivery costs) * If don’t vertically integrate by purchasing Canon Plastics, the company’s sales of the old tags (alligator and all) would be less than if it vertically integrated. * The Beachfield plant wouldn’t be back logged by adding the old plastics machinery in house. This would allow the plant to be more available for developing new production processes and technologies for the throw away technologies and shift production to its Puerto Rican plant on proven technologies. * Sensormatic would avoid making a substantial capital investment in old technology products leaving more cash available for the new capital technology investment if it chose not to vertically integrate. * Sensormatic is making a financial gamble on putting the money into a new technology whose demand and sales do not have a proven track record, but it still will be able to count on its current alligator tag, system and other sales to help fund it.

(Reviewing the Decision from the Process Technology approach recommended on pages 113-116) * 1. Understand business strategy and competitive environment. - There is plenty of room for growth of this market, only 5% of the market has been penetrated and Sensormatic is the leader in security surveillance system sales. To invest in throw away tags would be an innovative position relative to cost.

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