Lojack and the Micrologic Alliance

Topics: Term, LoJack, Time Pages: 7 (2073 words) Published: July 17, 2008

Current Situation (LoJack) and Strategy
“LoJack Corporation markets and licenses the LoJack System, a unique, proprietary system used exclusively by law enforcement personnel to track, locate, and recover stolen motor vehicles. The problem of vehicle theft has escalated to an epidemic level – estimated to result in an annual loss of almost $8 billion. The LoJack System has a proven track record of reducing damage, enhancing public safety, and solving serious crimes related to motor vehicle theft, all accomplished within the practical constraints of today's overburdened law enforcement system.” (Daily, 1999) Currently, LoJack has unique patented system designed to assist law enforcement in locating and tracking stole vehicles. Competition is fierce if viewed with Telematics and GPS tracking devices. However, if you look at vehicle recovery systems, LoJack is the global leader with a law enforcement network that cannot be easily duplicated. This law enforcement network is challenging politically and requires a high degree of local political assistance. Financially, sales are climbing, but year over year growth is declining. The distribution system through auto retailers seems stuck to new car sales. The LoJack strategy at the present time consists of several discrete variables. LoJack has elected to expand into new geographic areas and markets which is a logical growth strategy for the firm which has established an enviable reputation in terms of asset recovery systems. This company has developed a new tracking unit that permits it to move into new segments such as trailers while simultaneously reducing costs for such units, therefore, establishing itself as a cost leader in the sector. This combined with a strong differentiation of product through law enforcement networks gives LoJack a strong competitive advantage. These are strengths that cannot be quickly or easily duplicated and because of the proprietary technical aspect of this product. Competitors would have to try and find substitute products to compete directly with LoJack. Competitive Environment

If we use Michael Porter’s 5 forces as a measure of the competitive environment, we see the following: New Entrants
Teletrec and other competitors were on the market prior to LoJack’s entrance and other competitors are entering the market through GPS based systems such as ‘OnStar’. These systems are not a onetime purchases but incur monthly fees to maintain service and may require the use of a cell phone. Substitutes

Just as with GPS, there is a threat of substitute products coming on-line through new technology, but this threat should be mitigated by LoJack’s network with local law enforcement agencies.

Suppliers are also a threat as the auto industry is developing its own telematics technology. “The automakers, however, have balked at relying on standards to accelerate the design cycle. Further, their inability to deliver state-of-the-art entertainment, communication, navigation, and other "telematics" (navigation, driver-warning, and communication systems) clearly highlights the manufacturers' reluctance at relying on these standards. The good news is that the automakers appear to have realized their errors and limitations and are participating in the development of new network standards for both mission-critical and convenience or entertainment systems.” (Wright, 1999) LoJack must continue to market its law enforcement advantage to thwart off this threat. Buyers

At this stage, buyers have relatively limited buying power due to the lack of alternative technology. However, the threat is the heavy reliance on car dealers to sell the product. If there is no incentive to do so, then the buyer may lack the knowledge that would drive the purchase. Intensity of Rivalry

Although the product is in its growing stages, and there is no clear...
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