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iRobot

Strategic Analysis
by

Ashley Kohorst

on 8 November 2012

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Transcript of iRobot

iRobot Andy Scalise
Jordan Korn
Griffin Peterson
Andie Yepez
Ashley Kohorst Introduction External Environment Internal Environment Financial
Analysis Analysis of Strategic Factors Questions
Comments
Concerns Option 2 Customer Acquisition Option 1 Option 3 iRobot Strategic Posture Objectives Strategies Societal Environment Economic Technological Political Legal Sociocultural Task Environment Rivalry Buyer Power Power of Other Stakeholders Distributor
Power Entry Barriers Corporate Structure Corporate Resources Marketing Finance R&D Operations Human Resources Strengths Weaknesses Opportunities Threats SFAS Recommended
Strategy Implementation Evaluation and Control IFAS EFAS Alternatives R&D Focus
Customer Acquisition
Retrenchment Pros Cons Most of iRobot's income would come from a single division of the company
People may not "buy into" robotic products
Government may begin to see iRobot as a consumer product company and devalue its technology Easy product for people to understand
Gain visibility in the market
Potential for new home cleaning products to be developed
Increase dependency on iRobot products leading to further success in this sector
Efforts would be focused on the primary revenue generator for the company Focus on B2B and B2C marketing for the home cleaning robots by increasing the marketing budget
6-12 months
Saturate retail stores
Saturate national cleaning corporations with home cleaning products
Home and store demonstrations
TV advertisements
Optimize online advertising and website
Groupon Offer 0-6 Months
Set up meetings and demonstrations with national cleaning corporations
Develop retail store entry strategy
Further engage social media (video, photos, conversation)
Strengthen PR team
Target bloggers, local news, and radio and TV talk shows
Online advertising
Develop a TV and radio advertising strategy 1-2 Years
Have products in at least 90% of major retail stores
Double social media presence
Have products being used in at least 2 national cleaning company chains
Increase revenue by 10-15%
Customer surveys and employee reflection surveys to evaluate how people perceive our product and how much they like it
Conduct surveys about what other iRobot products consumers would like to see in the market 2-3 Years
Increase revenue by another 10%
Increase social media presence by another 50%
Determine 2 new home cleaning products to enter into the market based on customer surveys Option 2 Customer Acquisition R&D Focus Focus on developing civil law enforcement robots Pros
Diversify product lines
New source of income
First mover advantage
Already have some military robots that can just be tailored more specifically to civil law enforcement Cons
Civil law enforcement agencies may reject the new robotic technology
Increased liability
Difficulty securing agency contracts Retrenchment Divest home cleaning product patents and products
Focus on military and aerospace Pros
iRobot could sell off its home cleaning product division and focus on contract related agreements
Focus on one division where they have more experience instead of splitting their resources into two Cons
Too many eggs in one basket
If Government contracts do not renew and they eliminate using iRobot the company will be in tremendous financial trouble
iRobot will be giving up its only opportunity to become a player in the consumer robot industry
Extreme dependency on federal regulations, fiscal policy and expenditures
Highly uncertain marketplace
When iRobot's patents expire the military may start making their own robots instead of using iRobot Revenue Founded: 1990 in Delaware
Rodney Brooks
Colin Angle
Helen Greiner Alliances
- Boeing
- Advanced Scientific Concepts
Patents
Two Markets
- Consumer
- Military Create new products and stay
ahead of consumer needs Luxury Goods

Recession New technology leaves old
technology obsolete Recessions alter how the government
will spend its money
- Less emphasis on Robotics Military robots spare lives

Household cleaning bots can replace
jobs AB Electrolux
Alfred Karcher GmbH & Co.
Samsung Electronics Co., Ltd
QinetiQ
Lockheed Martin Corporation Few Substitutes - Alliances
- U.S Government Domestic
- National Retailers
International
- In-country distributors High Entry Barriers
- Advanced Technology
- R&D

Traditional Vacuum Cleaners Current Performance Poor Competition

Healthy Financial Positon iRobot has strong corporate structure, with members from prestigious schools and companies from across the United States.

Founded at MIT, iRobot is a technology developer with a modern corporate structure.

CEO – Colin Angle, MIT Grad and co founder has won a multitude of awards for his work iRobot’s promotion strategies varied between product markets

Home care products required a large percent of the marketing budget

iRobot also participated in education based programs like SPARK and National Robotics week From 2005 – 2009, iRobot’s revenue more than doubled from $142 to 299 million.

88% of revenue came from selling products, whereas the other 12% came from consulting.

In 2009 sales of home robots slipped by 6.3% due to the recession. However this was offset by an increase in international sales.

iRobot was smart enough to reduce costs and operating expenses so that they increased their net income from $756k to $3.3 million. Research and development at iRobot was a critical part of the company’s success. iRobot believes that they can stay ahead of customer needs by bringing new, innovative products to the market.

In 2009, total R&D costs were $45.5 million

$14.7 million of costs were funded internally while the rest were funded externally through government programs.

iRobot’s core technology were in collaborative systems, semi-autonomous operations, advanced platforms and human-robot interaction.

R&D teams meet at different locations across the US to ensure that the product is tailored to each market they are a part of. Teams use in-field testing to allow iRobot to quickly improve its technology and design so it can successfully fulfill the needs of the end-users.

As of 2009 the company held 71 US patents, 150 patents pending, 34 international patents and more than 108 pending foreign applications. iRobot mainly operates as design firm

From the start of the company until 2010, iRobot used only two third party manufacturers.

In 2010, iRobot signed a long term contract with US based Jabil Circuit Inc., a manufacturer, tester and supplier of robotic components. iRobot employs 538 full time employees who are some of the most distinguished robotics professionals in the world.

Continued success relies on innovative and intellectual skilled employees. Cash and Long-term Debt First Mover
Home Care Robot
Gov't Contracts
Extensive R&D Budget
Corporate Alliances Expiring Patents
Dependence on US Gov
Low Visibility & Scalability
Low Competition War In Iraq
User Interest in Technology
Utilization of TV & Radio Advertising Recession
Obsolete Technology
Gov't Policies Changing
Volatility of Supply
Full transcript