ADT 2007 Annual Report Download - page 97

Strategy
We intend to expand our commercial customer base by focusing our sales and marketing efforts on
key vertical markets such as retailer, banking, governmental, educational, oil and gas and
transportation. By adopting a vertical market-focused approach, we believe we can effectively target
those market segments where ADT Worldwide can differentiate its core capabilities and customize
security solutions specific to its customers’ needs. We intend to increase the number of commercial and
residential customers by more effectively generating leads and by driving productivity in our sales force
through improved incentives and performance management systems. We also plan to increase our
customer base by acquiring additional accounts from our network of authorized dealers. Further, we
expect to continue improving our customer account attrition rates through enhanced retention and
re-sale programs, albeit at a more moderate rate than in the past few years.
ADT Worldwide operates in many regions including North America, Europe, Middle East, Africa,
Asia, Australia and Latin America. Operating performance can vary region to region for a number of
reasons, including the mix of revenues between residential and commercial customers as well as the mix
of higher-margin contractual revenue vs. lower-margin product installation revenue. We have identified
certain strategic actions that we are executing to improve our operating performance in certain regions
that are currently underperforming. These actions include consolidating certain administrative functions
and executing field productivity initiatives, particularly in Europe.
We will pursue opportunities in attractive emerging markets where we believe we can leverage the
skills and technologies that we have developed in the markets we currently serve. We will complement
these initiatives by continuing to work with our Safety Products segment to develop new technologies
and explore potential partnerships and acquisition opportunities that will allow ADT Worldwide to
strengthen its service offerings, enhance its market positions or expand into higher-growth, adjacent
markets.
Services and Products
ADT Worldwide supplies and installs electronic security systems to the residential, commercial,
industrial and governmental markets. A significant portion of the mechanical components used in our
electronic security systems are manufactured by our Safety Products segment. We also provide
electronic security services, including monitoring of burglar alarms, fire alarms and other life safety
conditions as well as maintaining electronic security systems.
Our electronic security systems business involves the installation and use of security systems
designed to detect intrusion, control access and react to movement, fire, smoke, flooding,
environmental conditions, industrial processes and other hazards. These electronic security systems
comprise detection devices that are connected to a monitoring center that receives and records alarm
signals. For most systems, control panels identify the nature of the alarm and the areas where a sensor
was triggered. Our electronic security systems include: access control systems for sensitive areas such as
offices or banks; video surveillance systems, designed to deter theft and fraud and help protect
employees and customers; and asset protection and security management systems, designed to monitor
and protect physical assets as well as proprietary electronic data. Our electronic security systems also
include anti-theft systems utilizing labels and tags in the retail industry. Many of the world’s leading
retailers use our Sensormatic anti-theft systems to protect against shoplifting and employee theft.
Purchasers of our intrusion security systems typically contract for ongoing security system
monitoring and maintenance at the time of initial equipment installation. Systems installed at
customers’ premises may be owned by us or by our customers. Monitoring center personnel may
respond to alarms by relaying appropriate information to local fire or police departments, notifying the
customer or taking other appropriate action. In some instances, alarm systems may be connected
directly to local fire or police departments.
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