XYZ Corporation in the Field of Security Services - Case Study Example

1.0 INTRODUCTION XYZ Corp is a well established player in the field of security services having experience in dealing with wide range of security services like uniformed security officers and control rooms manning for office and home security, celebrity security, bodyguards and event and venue crowd controllers. It is in this business for last twenty years with its operations spread all over Australia. The Company’s mission is to fulfill the need of security of its customers with motherly care and fatherly support without having them to worry about cost. Accordingly, company’s philosophy about its services has been that for securing clients, it requires establishing a personal bond with them. This has resulted in building up of largest customer base in Australia with a very high brand recall and brand loyalty in market. With this high level of growth, customer base and good cash reserve, company is looking forward for expanding its business. With its long existence in market it has developed a very good insight of customer behavior, expected pattern of security breach and response actions. In its course of business it has to use some gadgets and infrastructure for sensing and monitoring security breaches, which are normally sourced from third party at a cost and which many a times do not meet full requirement of client. With already existing customer base, which is having latent demand for more advanced security appliance as well as high potential new customer base, XYZ Corp has decided to have technological tie up with ABC International, the market leader in US and UK market in Security Appliance, for diversifying into the security appliance sales in Australia. 2.0 SITUATION ANALYSIS Current portfolio of services offered by XYZ Corp includes uniformed security officers and control rooms manning for office and home security, celebrity security, bodyguards and event and venue crowd controllers. Out of these, office and home security services contribute about 55 percent of its total turn over. It is providing security assessment, planning, execution of security plan and manning of control room at customer premises. Generally control rooms are provisioned at big office premises and residential societies. For individual residential units and small offices only uniformed security guide are provided. In control rooms, CCTV views are available for security personal for all venerable areas as well as central walkie-talkies are also available for communicating with field officers. In case of any breach of security which has gone unnoticed from field officer, control room immediately communicate over walkie-talkie with them, who in turn take remedial action. This set up works cost effectively for big customers who want to secure a larger area but smaller offices and residential units still find it costlier. As per the survey conducted by Australian Bureau of Statistics (ABS), One in twenty Households in WA was victim of Break-in. AAMI says that one in twenty Australians do not take any security measures to protect their home when they go on holidays, Almost half of Australians do not investigate or call the police when they hear a home alarm and one in five people don’t warn their neighbors about thieves in the area after they’ve been burgled. Further, NSW Fire Brigade says that Cooking equipment was the most common equipment reported involved in ignition; Smoke alarms were not present in 68% of residential building fires attended by the NSW Fire Brigade and 42.8% of all fires were started in the kitchen or cooking area. Above findings suggest that Australians are either not protected or are using inadequate sensing or monitoring equipment for security. This gap analysis, coupled with good cash reserve and large customer base, prompted XYZ Corp to go for a technological tie up with ABC International for sophisticated Home Automation System. Company will use its existing expertise for operation of central control room and its fleet of mobile security vans. 2.1 PRODUCT DESCRIPTION For quite a lot of people home automation may be something as simple as remote or automatic control of a few lights and air conditioners. But for most of the others, security may be the central application among all of them. Still others may choose to install advanced controllers or use voice recognition. As a very basic definition, home automation may be referred as anything that gives customer remote or automatic control of things around the home like TV, door lock, video etc. Installing home automation to an existing home is surprisingly affordable and simple. Ideally Home automation should be the thing to make customers life more convenient, easy, safe, and fun around. The suggested product in its basic version comes with intruder alarm, smoke alarm and automatic lighting control with remote alarm receiving facility. It has many plug-ins which can enhance its functionalities as desired by customer. The Intruder alarm functionality is implemented by placing sensors strategically at break-in prone spots. It can have programmable schedules to allow access to babysitters, cleaning people and deliveries, any other intrusion would raise an alarm and this alarm is transmitted to XYZ Crop’s 24x7 monitoring control rooms over a GPRS connection, where trained security officers use ‘confirmation’ technology to identify the genuineness of alarm. Confirmation methodology can be implemented as per customers request and his budget and it can be either monitor cameras (to see an intruder), an audio connection (to hear an intruder) or by ‘sequential confirmation’. Sequential confirmation basically means detecting an intruder using sensors in a number of different places in or around home - to spot if someone is moving around. It has further option of disabling the remote monitoring at will of customer, which she may like to do when she is at home. Once alarm is confirmed, control room would inform to Police, to customer and/ or her neighbor over phone (if opted) and to its own mobile security vans which are right now being used to transport it security personal at its existing customer site. Company intends to further increase the fleet of its existing mobile security vans. Similarly it is entering in a corporate tie up with Telstra for providing bulk GPRS enabled connection with low flat rental and no usage charges. This connection can also be used for image transmission to control room. These images are used by control room for confirmation as well customer can also see them on his mobile phone or on a password protected web site. Above functionality is for alarming when break-in is attempted, whereas its automatic light control feature allows home lights to be operated in a way that it gives a feel of presence of member at home and act as a deterrent to burglary. Duration and /or frequency of lighting can be altered remotely also by customer. This product’s smoke detector uses the radiation from a small amount of radioactive material to detect the presence of smoke or heat sources and is called ‘Ionization chamber smoke detectors’. This contain a small amount of radioactive material encapsulated in a metal chamber and take advantage of the ions created by ionizing radiation to develop a low, but steady electrical current. Smoke particles entering the chamber disrupt the current and trigger the detector's alarm. Ionization chamber detectors react more quickly to fast flaming fires that give off little smoke. An ionization chamber for use in a smoke detector includes first and second outer electrodes and a non-reflective center electrode. The non-reflective center electrode can be formed as a metal electrode having a non-reflective coating or as a non-reflective; conductive plastic elements. The ionization chamber can be incorporated into combination smoke detector, which includes a photoelectric sensor. A non-reflective center electrode, associated with the ion-type sensor is symmetrically located in the detector and displaced from the photoelectric sensor. Output trigger of this detector is also fed to central controlling unit of this new product, which the can transmit this alarm in line with intruder alarm. Apart from these basic functionalities, many plug-ins can also be added to this product’s central controlling unit. Thermostats controller: Remote control thermostats allow customer to adjust the temperature from bed at night or even from a cell phone while on her way home (or to your 2nd home!). They can even trigger a notice to customer if the temperature gets too low (freezing pipes) or too high (pets, plants, etc.). Irrigation Control System It turns on sprinklers and water the garden only when it's dry. Or it can be used for security purpose, as it can turn the sprinklers on when there's motion in the yard at unwanted times which would leave the intruder to the police with the wet clothes as actual evidence. Or it may be used to turn on the sprinklers remotely by customer when they are not home, just for faking a presence at home. Home Entertainment Controller Home automation system provides customer the convenience of using one remote control to get all devices going. From now on people do not need to know all 10 steps to start up the home theater - just press the HBO button on their remote control and this plug-in to home automation products/system will do the rest for them. Built-in speakers are especially popular with homeowners as they provide beautiful sound throughout the house while adding no clutter whatsoever. Remote Control Door Lock A wireless remote control door lock system for residential and commercial building includes an electrically powered striker plate assembly having a striker plate part moveable between positions for engagement and disengagement with a door latch part. The striker assembly is adapted to be connected to the central control unit that supplies low voltage DC power to the striker assembly and includes a radio frequency range signal receiver and a circuit responsive to receiving signals from an operator controlled radio transmitter to effect indefinite or momentary operation of the striker assembly to unlock a door. The control unit circuit includes a first self-latching relay, a selector switch and a second relay for selecting an operating mode of the system wherein the door may be unlatched momentarily or indefinitely until another signal has been transmitted to the receiver. Customer can use this system as a trap for intruder or may be for easy pet movement. 2.2 MARKET ANALYSIS As per the Home Safety and Security Survey conducted in Western Australia (WA) by Australian Bureau of Statistics (ABS), an estimated 73% WA households did not have a security alarm installed. Those living in other dwelling types were less likely to have one installed (17%) compared with those living in separate houses (30%). Households that were rented were less than half as likely to have a security alarm installed (15%), compared with fully owned or being purchased households (32%). Of those households that did have a security alarm installed, 43% were unmonitored. As per this survey, an estimated 38,400 WA households that is one in twenty households had been a victim of an actual home break-in and/or an attempted home break-in in the last 12 months from survey date. Households situated in metropolitan regions were more likely to be a victim of an actual break-in and/or an attempted break-in than those in non-metropolitan regions. Seniors households are those where at least one usual resident was aged 60 years or over in October 2004. They were almost half as likely to be a victim of an actual break-in and/or attempted break-in compared with other households. Of those households who had most recently been a victim of an actual break-in, some 60% reported the point of entry was locked at the time of the incident. This compares with those households who had recently been a victim of an attempted break-in, where the attempted point of entry was locked in 86% of incidents. The point of entry for three-quarters of actual break-ins was located at the side or back of the dwelling and for almost two-thirds (64%) the point of entry was not visible to neighbors or passers-by. Over two third of actual break-ins were occurred when someone was not at home in the dwelling. More than four-fifths (82%) of households whose most recent incident was an actual break-in had property stolen. For these households, some 39% had up to $499 worth of property stolen. A similar proportion of households had between $500 and up to $2,999 worth of property stolen (38%) compared with 23% of those that had $3,000 or more worth of property stolen. Above finding shows that there is plenty of potential market available (74% of households) for installation of Home Automation System, which would like to pay for this system and service than to loose property worth of thousands dollars. More so over getting these service monitored by central control system makes sense as break-in attempts are more likely to happen when people are not at home(66%) and even neighbor are also not able to notice these incidents as these are more likely to happen at the side or back of the dwelling which is not visible to them. XYZ Corp can target working couple owning the property in Metropolitans areas, in first phase as they are more venerable to break-ins. Further it can make use of its existing infrastructure of mobile security vans more effectively here. It should also have a provision of renting out the Home Automation system apart from outright sell. 2.3 SWOT ANALYSIS XYZ’s strengths include its management, experienced staff, marketing savvy, and targeted focus. XYZ will capitalize on these, and other strengths, to take advantage of opportunities and manage threats. Firm weaknesses are primarily those inherent in a new entry and are discussed in one of the following sections. 2.3.1 Strengths Management: XYZ's manager has a successful record in this industry. His experience and the network of valuable connections he has developed will contribute greatly to XYZ's success. Experienced Staff: The XYZ team is experienced in the security business and in adventure sports. All members have over five years experience. Moreover, they are willing to sacrifice extra time and effort to build a successful business. Along with the intangible benefits derived from succeeding in an independent endeavor, XYZ will offer profit sharing and potential partnership opportunities to its ground-floor members. Good Financial Position: Due to high margin business of security services, company has good cash reserve. This financial muscle can be used for subsidizing new venture. 2.3.2 Weakness New Product: XYZ need to develop technical expertise in dealing with this new product. It may have to rope in extra manpower or have to impart extensive trained to suitable employees, having proper attitude. Financing: Preliminary estimates of sales and expenditures suggest that XYZ will remain financially stable. However, unforeseen expenditures or poor sales will threaten XYZ’s cash position, which will be particularly vulnerable in year one. Product Price: Due to price paid to ABC Inc for technical know-how, product is slightly higher priced and initially it would require subsidy from XYZ’s reserves. 2.3.3 Opportunities Untapped Market: Primary estimates suggest a very large untapped market having latent need of such product, which can be exploited with the advantage of first mover. Potential to achieve sales from exiting customer base: As XYZ already boast of very large base of existing loyal customers, where they are using third party products with many vendors. This can be replaced by its new product to give them seamless integrity from one vendor. Potential to become Market Leader: XYZ already holds market leader position in security service domain. With this product and its experience it aims for becoming market leader in security products domain also. Thus emerging as a total security solution provider Horizontal Integration: The potential to integrate services and add branches exists. 2.3.4 Threats Local Competition (Existing and potential): There are no agencies in the Australia having seamless integration over services and products. However, local vendors can eat up the proposed market share with price advantage initially. Moreover, other service companies can also introduces this product following XYZ’s lead 2.4 COMPETETION http://www.mysecurity.com.au/ As per a rough estimate of a website, there are more than 200 companies, all over in Australia, who is engaged in providing various security services. These can be segregated based upon the geography where they are operating and type of services they are offering. Total Security Service market can be broadly sub divided in Security Services and Security products. These broad categories include further sub categories as below: Access Control, Armored Car Services, Associations and Organizations, Biometrics, Bomb Detection and Protection, Cash In Transit / Cash Logistics, Close Personal Protection / Body Guards, Closed Circuit Television (CCTV), Communication Systems, Crowd Control, Dog Handlers / K9 Security, Fencing, Fire Systems, Glass, Guard and Patrol Services, Alarm Systems, Investigation / Investigators, Investigators, Occupational Health and Safety OH&S ,IT and Computer Security, Lighting, Locks and Bolts, Manned Security, Perimeter Protection, Personnel Services/Training/Recruitment, Physical Security, Retail Security , Roller Shutters and Grills, Safes , Secure Documents, Security Consultants, Security Installation, Security Windows, Signage, Storage Services, Training Courses, Travel Security, Vehicle Security, Home Security, Commercial / Industrial Security, Security Officers / Security Guards, Mailroom Security XYZ Corp is already market leader in Security Services domain with Pan-Australian presence in market dominated with regional players and is having almost 35% market share. Nearest competitor is Chubb Australasia, part of UTC Fire & Security, a United Technologies Corp. (NYSE:UTX) business unit. This company is in direct competition with XYZ Corp in its existing business, as it is providing security personnel, cash logistic, home security and vital call services. Although this company is in business for more than 100 years, XYZ has grabbed its market share very considerably with its aggressive marketing strategies as well as its customer-centric approach. The new product planned by XYZ Corp is being introduced for first time in Australia, and it gives seamless integrated solution from product level to service level. Chubb is also having a product named “The Chubb Secure 840” which gives a sub set of XYZ Corps product’s functionality but it is not integrated with control room for remote monitoring. 2.5 PRODUCT DIFFERENTIATION AND COMPETETIVE ADVANTAGE Following attributes differentiate XYZ form other players of this domain: Existing Large Loyal Customer Base Good experience and knowledge of domain Highly experienced staffed Pan-Australia presence Corporate tie-ups for technical expertise. Coupled with above competitive advantage, XYZ’s new offering is unique in current market scenario as it integrates both security services and product domain seamlessly. XYZ is already a market leader in security services domain and by adding this new product it would further strengthen its market position. 2.6 LEGAL AND ETHICAL ISSUES NSW Fire brigade requires following Overall System performance to be met by alarm monitoring agencies like XYZ Corp: Alarm of fire detected at AFASP Monitoring Centre within 15 seconds and sent automatically to the NSWFB within a further 5 seconds (20seconds overall) without human intervention. A FA status changes, isolates and faults received at AFASP within 10 minutes. Telecommunications links between protected premises and AFASP monitored for integrity and failure detected within 90 seconds. Communications link availability between the premises and the AFASP in accordance with AS1670.3 - achieved through a dual communications path (as appropriate). Communications link failure between AFASP and NSWFB detected within 30 seconds. Telecommunications protocol as defined in AS4418.2 is not mandatory. XYZ has to maintain these requirements and for this it needs a very close interaction with Telecom Company. It has already entered into agreement with Telstra for achieving these service parameters. There are other issues like XYZ’s “confirmation technology” used for this product which may require audio and video signals to be monitored. Some customers may think it as a breach of privacy. XYZ has to educate customer to change this perception. 2.7 CONCLUSION With introduction of this new product XYZ Corp is entering into Service Product domain. There is a plenty of potential market available for such product. It is believed that this product will pave a path towards projecting XYZ in total security service provider. Reference Car insurance Australia, Retrieved Apr 3, 2007, from http://www.aami.com.au Chubb home page, Retrieved Apr 3, 2007, from http://www.chubb.com.au Home safety and security, western Australia, Retrieved Apr 3, 2007, from http://www.abs.gov.au/ausstats/abs@.nsf/cat/4526.5.55.001 NSW Fire Brigade, Retrieved Apr 3, 2007, from http://www.fire.nsw.gov.au Read More