Reference no: EM133343782

Logitech

Logitech produces a wide range of computer-related products such as mice, keyboards, speakers, and webcams, as well as various accessories for tablets and smartphones. It has also gotten into the home security business, through the purchase of WiLife, a venture started by two entrepreneurs in 2002. WiLife products were renamed Logitech Alert products at the time of purchase. The home security product line has been greatly updated and expanded under the Logitech name; now the line includes state-of-the art indoor and outdoor systems that offer night vision as well as high-definition-resolution images. This case goes back to the founding of the WiLife company by the two entrepreneurs, and how they progressed from opportunity identification and a good idea to their first marketable product.

Evan Tree had about two decades of experience working as a dealer-installer in the video surveillance industry when he founded WiLife, Inc. in 2002. His partner in this venture, Andrew Hartsfield, had entrepreneurial experience, most recently in the beverage business. Evan's experience in video surveillance suggested that there was a gigantic hole in the marketplace. Video surveillance systems currently available on the market might cost as much as $4,000, even for a basic model. These were typically sold to business operators by big security companies such as Honeywell or ADT through dealer-operators like Double Tree. Not only was the price steep, but running wires and mounting cameras was complex work, and a central location would require a dedicated computer for monitoring. Big customers, or those such as jewelry stores or pharmacies with special surveillance requirements, would make the big investment. But the majority of small business owners found the price tag for video surveillance much too high. Evan and Andrew recognized that a small, inexpensive video surveillance system would fill a real market need for the small businessperson. The two partners began thinking of the market opportunity and the technical and commercial factors that would be most critical to success.

On the technical side, a place to start would be the weaknesses of the current systems. Systems available at the time used analog cameras. It would make sense to explore digital cameras for this application, especially as the costs would make sense to explore digital cameras for this application, especially as the costs would probably not be too high. Digital video clips could potentially be sent to a PC, or even to a mobile phone with video capability. It also makes sense to explore Ethernet networking to connect the cameras to the PC. This is a standard and readily available technology that would eliminate the need for new wiring, as it runs on the electrical power lines already in the building. One would then need to think about video image storage for review by business owners or the police (in the event of a break-in caught on tape, for example). Currently, images caught by analog cameras were videotaped, and the tapes were frequently reused after a certain number of weeks; this might be a reasonable starting point for storage requirements. Picture quality would have to be good, and

it would be a nice feature to add digital time stamps for convenient playback and searching. Though Evan and Andrew thought first only of in-store surveillance, the concept might be developed for external cameras as well, though this might pose additional technical issues (making the cameras waterproof, for example or using infrared technology so the camera can see in the dark).

There are obvious commercial factors to consider here as well, first and foremost being price. It is almost a certainty that more small businesspeople would buy video surveillance systems if the price were not so high. Still, there are nonprice attributes to consider. As noted above, it should be technologically possible to send digital images to the user's PC or phone; customers should like this because it eliminates the need for dedicated PC. Plus, the system could be "smart," alerting the user to any unusual activity by sending an alarm message to the user's PC or phone. (If it is really smart, it should be able to distinguish a burglar breaking a window from a cat sitting on the windowsill.) Additionally, having the crew out to install video cameras is time-consuming and disruptive; ease of camera installation should be a consideration. Similarly, it should be painless to load the required software onto the PC.

You don't have the information to compose an entirely new scoring model for use on the new product concept discussed in this case, but you can put together the five most important factors under each part of the model in the chapter (technical and commercial factors). This case gives you a few suggested technical and commercial factors to consider; try to add a few of your own to these. Give all of them weights. Then apply your model to the new product concept Evan and Andrew have recently been looking at (the new inexpensive digital video surveillance system).