smith_and_wesson

Running head: [SMITH & WESSON - FINAL] 1
Charli Taylor, Claudia Coldivar, Ruby Martinez
Professor Rodriguez
MSMU Business 185
Date 4/16/2016

[SMITH & WESSON - FINAL] 2
Executive Summary
In the following passages, we’ll be discussing multiple topics involving firearms. We’ll
provide insight to the different state policies. State policies in some states are more strict than
others when applying for a firearm, let alone the actually purchasing transaction. You will
discover which states are the leaders in firearm sales and which ones struggle to bring interest in
owning a firearm. Also we’ll list some popular chat rooms, forums and clubs. These sites allow
you to discuss anything and everything there is to do with firearms.
We’ll present some industry facts regarding the regions that turn the most application to
buy a firearm, Regional purchasing percentages. Also some technology advancements for the
triggers. Some technology can record the actual fingerprint of the shooter. There is also a
customer profile provided by the industry.
We’ll be deep diving into Smith and Wesson specifically. Reviewing the publication
acknowledgement and awards given to them, how Obama help increase the firearm sale.
Including the terrorist attacks and school shootings in the states. People want to feel safe and
have the choice to take matters into their own hands, if need be. How the business discussion to
buy successful firearm accessory companies and add them to the company profile. Overall the
most important contract to be gained is that with the military. (Figure 1)

POLITICAL
To purchase a firearm in the State of Montana, residents do not need a background check,
they do not need a permit, they do not need to register or have a license. The one and only
requirement is that the person is not intoxicated or under the influence of a controlled substances
when purchasing a firearm.
Anyone can carry a concealed weapon if they have a Montana or out-of-state permit. The
requirements to get a Montana permit is the buyer needs to be a resident of Montana for at least 6
months, they must be a U.S. citizen and provide one form of I.D. They must also be at least 18
years of age, have completed a training course and are required to pay the permit fee.
Illegal firearms are listed as: sawed off rifles or shotguns, machine guns and silencers.
Those who are denied from carrying a concealed weapon are individuals with drug abuse history,
have convictions or anyone who has not completed the mandatory weapon training programs.
In order to purchase a firearm in the State of California, background checks are required,
a firearm safety certificate is required, and applicants must take and pass a written test in order to
purchase a firearm. California has a limit on handgun purchases, the limit is one per month, per
person. Applicants must fill out an application with the Department of Justice. The waiting
period for the firearm purchase is 10 days. Firearms must be purchased through the Dealer's’
Records Sale only. Applicants must be at least 18 years old to purchase a rifle or shotgun.
Applicants must be 21 years or older to purchase a handgun. They must also have a valid
California I.D. card, a Driver’s License or a Military I.D. card in order to be eligible to purchase
a firearm. Applicant must be a California resident and they must provide a utility bill, lease or
property deed as proof of residency.

To carry a concealed weapon a CCW (California Concealed Carry Permit) license is
necessary. Applications are obtained through the applicant’s local County Sheriff Department.
ENVIRONMENTAL
The environment of firearm owners vary. The largest firearms selling state is Kentucky,
which is largely rural. Kentucky is known as a Republican state. The second largest firearm
selling state is California which is mostly urban. California is known as a Democratic state. The
third largest state to sell firearms is Texas, which is a mix between urban and rural. Texas, like
Kentucky, is known as a Republican state.
SOCIAL
The most popular firearms sold in the United States are the Smith & Wesson M&P
Semi-Automatic Pistol and the GLOCK 19 which has been one of the most popular guns sold
since its introduction in 1988.
Gun owners can communicate through: MyGunSpot.com and Gun Owners of America,
and Smith & Wesson Forum which are all website. They can also communicate through blogs.
Clubs for gun owners are: Gun Owners Club (which is a website), Gun Owners of
America, the National Rifle Association, The Liberal Gun Club, Maryland Tenth Cavalry Gun
Club, and A Girl & A Gun.
Typical gun owners are white males who are 50 years old or older, living in rural areas.
They are typically conservative Republicans who label themselves as hunters or fisherman. They
usually identify themselves as “proud to be an American.” People who identify as proud
Americans usually exercise their Second Amendment rights, the right to keep and bear arms.
The South is the region with the largest gun sales. The Northeast has the lowest gun sales.

The largest purchasers of firearms are conservative males who are 50 years old and older.
Millennials make up only 26% of those who purchase guns. They have some interest in
guns but they have a minimal interest.
TECHNOLOGY
There is new technology that affects gun production. The new technology is Smart Gun
technology. Engineer Omer Kiyani from Detroit created the Identilock gun. The smart gun is
being tested and is currently in the prototype stage. This technology can identify who is using the
gun through a fingerprint sensor. This technology is not being embraced at this time. There are
complaints that the fingerprint sensor is not reliable. This is a concern because if the owner needs
to use the gun right away, let’s say there is an intruder in their home, they would be unable to
defend themselves due to faulty sensor.
Another company that has created a smart gun is a company by the name of Armatix.
They are a German firm. They have launched their iP1 pistol. Their technology uses a radio
frequency identification chip that is activated by the owner’s watch.
Smith & Wesson is using Scandium alloy for their frame on the S&W 1911 series pistol.
This is not a popular model. From reading the forums discussing this model, several comments
were that Smith & Wesson is going through growing pains with this model.
Infinity Arms is the maker of an all-titanium gun called TIKI-T. This gun is said to be a
lightweight handgun that has an accurate shot.

ECONOMIC
Residents that live in California and Texas are typically average wage earners. Kentucky
residents seem to earn lower wages than those in California and Texas.
California and Texas residents have an average amount of disposable and Kentucky
residents have less disposable income than California and Texas residents.
When comparing California, Texas and Kentucky, Kentucky has the largest amount of
firearms sold each year. In Kentucky, 2.9 million background checks were processed in 2015.
California is the second largest state to sell firearms, 1.5 million background checks processed in
2015. Texas is the third largest state to sell firearms, 1.3 million background checks processed in
2015.
LEGAL
In order to transfer firearms in California, the transfer must be made through the Dealer’s
Record of Sale. This is the case whether the transfer is made privately or between consumer and
dealer. It is required that a background check be done, application must be filed, and a fee is
required. The waiting period required is 10 days.
To transfer a firearm in Montana, no background check required when the transfer is
made privately.
In Alaska, Arizona, Kansas, Maine and Vermont, gun owners can carry concealed
firearms without a permit. The only requirement is they are deemed legally able to carry a
firearm.

SWOTT
STRENGTH
Internal to Smith & Wesson
Smith & Wesson Corp. was named as the creator of the top performing hunting modern
sporting rifle by Game & Fish/Sportsman magazine. The company’s M&P10 rifle was what got
them recognition being the top performing hunting modern sporting rifle.
Smith & Wesson received the prestigious “Readers’ Choice Award” during the 2016
SHOT Show®
in Las Vegas, Nevada. Five thousand Game & Fish/Sportsman readers voted and
the M&P10 received over 50 percent of the total votes cast. They more than doubled the number
of votes received for the second and third place modern sporting rifles.
Earnings nearly quadrupled to $31.4 million, or .56 cents a share, on sales that jumped
61% year-over-year to $210.8 million during the three months ended January 31st. Profit
margins are up to 41.1% from 33.6%.
The stock is up around 20% this year, and Smith & Wesson has surged 932% since
President Barack Obama took office in January 2009. Terrorist attacks and the possibility of
new gun control regulations by a new legislation have created a gun ownership craze.
Smith & Wesson recently acquired, PowerTech, which has made licensed Smith &
Wesson flashlights. Merger and Acquisitions like this one has helped Smith &Wesson become
the leader in the accessory market.
Smith & Wesson continues to pursue additional military contracts, such as a high-profile
competition to replace the Beretta M9 as the U.S. military’s next standard-issue pistol. Smith &

Wesson partnered with aerospace and defense company General Dynamics (GD) to develop and
submit a version of Smith & Wesson’s M&P polymer pistol.
Smith & Wesson revenue rose 32% annually to $143.2 million and beat estimates by $4.6
million. With the coming election it is expected to skyrocket.
WEAKNESS
Smith & Wesson clearly states that it does not market to minors although they have
various programs for children. There will be some scrutiny over marketing to minors.
In 2017 the government will contract out 500,000 guns and those contracts have not been
secured.
What are they doing to market to new customers? The implication is that most of the
growth in the firearms industry is coming from existing owners stocking up on more guns, rather
than new purchasers buying for the first time
OPPORTUNITIES
Smith & Wesson is capitalizing on growing consumer demand for outdoor gear and
firearm accessories. Introducing 121 new branded items such as gun cases and bags, that will
open up the doors to form up to three new divisions that would house the company’s
sporting-goods products.
Smith & Wesson partnered with aerospace and defense company General Dynamics
(GD) to develop and submit a version of Smith & Wesson’s M&P polymer pistol. This pistol
will be one of the contenders to help land a government contract for 500,000 pistols.

Create a more proficient gun that shoots to take down rather than to shoot to kill for law
enforcement. ie. bean bag and pellets. U.S. Law enforcement is getting a lot of flack for shooting
people rather than apprehending them.
Merge and Acquire Identilock technology to drive out competitors and continue to sale
guns in the California market while leading the industry with smart technology.
TRENDS
External to Smith & Wesson name 3 significant trends
Due to new proposed gun laws, Black Friday 2015 was the single biggest gun-purchasing
day ever, with more than 185,000 checks processed, according to background check figures from
the FBI.
Gun manufacturers craft their messages with young people in mind. Marketing to
children under the age of 18. Through camps and gun programs they are indirectly marketing.
California recently passed a law requiring gun manufacturers to add microstamping
technology to some guns, which would stamp the bullets when the gun is fired so they can be
traced to the gun.
COMPANY PROFILE
Smith & Wesson is known as a manufacturer and well as a service business. Not only do
they produce firearms, they provide services to repair any defective products. They do not charge
for this service.
Smith & Wesson also has an academy, which provides quality training that is performed
by law enforcement personnel. The academy is located in Springfield, Massachusetts. The
classes’ certifications are good for three years.

Smith & Wesson provides a support line for anyone who has questions about Smith &
Wesson’s products or if they need advice from a product specialist. They advise potential
customers to call in to discuss what product is right for them to fit their needs.
The NASDQ trades Smith & Wesson’s shares. Their ticker symbol is SWHC.
Horace Smith and Daniel B. Wesson created a partnership in 1852 in Norwich,
Connecticut. Their first lever action pistol did not make money, and they were forced to sell their
company to Oliver Winchester, who owned a t-shirt company at the time.
In 1856 Horace Smith and Daniel Wesson created a second partnership (Smith &
Wesson). They produced a small revolver which was designed to fire their “Rimfire cartridge”
which was patented in August 1854. This was the very first self-contained revolver cartridge the
world had ever seen.
By 1869 Smith & Wesson created a third model revolver, The Model 3 American. This
revolver had the largest caliber cartridge and placed Smith & Wesson as the world’s largest
handgun manufacturer selling to the United States Cavalry and Russian Imperial Government
Smith & Wesson have been in business since 1856, making their company 160 years old.
Smith & Wesson produces handguns, rifles, handcuffs, and a variety of accessories which
included items such as lasers, holster and pistol grips, carrying cases for handguns and rifles to
name a few. They sell their products to the general public as well as to the military.
Smith & Wesson Holding Corporation, a global leader in the firearms industry and is one
of the world’s largest manufacturers of quality firearms and firearm safety/security products.
Smith & Wesson has been very strategic with its merger and acquisitions. Acquiring gun
companies with government contracts has deemed itself to be very lucrative for Smith &

Wesson. In the past Smith & Wesson’s main focus was on the retail sector. Within the past 10
years the company has focused more of its energy on government contracts.
After sales surveys performed by Smith & Wesson, they learned that there was a market
bigger than the pistol market and then began to develop rifles, shotguns, and ammunition.
MANAGEMENT TEAM
P. James Debnery is the President and CEO of Smith & Wesson.
Jeffrey D. Buchanan is the Executive Vice President, Chief Financial Officer, and Chief
Administrative Officer.
Robert J. Cicero is the General Counsel, Chief Operating Officer, and Secretary.
John Dineen is the Chief Information Officer.
FINANCIAL ANALYSIS
The business is struggling to maintain, if not increase the YOY. There is a 21% variance
in the working capital from 2014 to 2015. Another large decrease YOY is in the net profit, the
variance is 44%.

RECOMMENDATIONS
Smith & Wesson does not have a strong social media presence. Presently most people
that are purchasing guns are people that are already gun owners. In order to better help Smith &
Wesson reach out to new consumers in a more ethical way than marketing to minors, is to build
its online presences. The internet is so global that heightening the social media presence will
affect sales globally. Presently Smith & Wesson has only 173,000 followers on instagram,
164,000 Twitter followers 115,804 likes on Facebook. As the global leader in gun manufacturing
those numbers are too low.

Smith & Wesson should hire in a specific team strong in mergers and acquisitions and
researching government contracts. As long as Smith & Wesson continues to go after smaller
companies holding government contracts and aggressively cultivate new government contracts,
they will remain the leader in gun sales.
MEASURE
Smith & Wesson should hire a team of social media marketing experts. They want to find
a marketing team that understands the buying habits or millennials. They also need a sales team
that understands those who believe the hype that guns are bad, those who believe that guns kill
people and cannot see that people kill people.
They should hire a closing team to solidify contracts.
They should hire a government liaison to assist getting more governmental contracts.
They should acquire smaller companies that have patent and designed smart technology,
such as Identilock and Armatix iP1.
The hiring of the marketing team, government liaison should happen immediately. Also,
they should acquire the smart technology companies immediately as well. The smart technology
is still in the testing stage so Smith & Wesson should acquire now before the products are
released.
We recommend Smith & Wesson track their progress quarterly to identify their progress
in each area.

References
History - Smith & Wesson. (n.d.). Retrieved April 14, 2016, from
https://www.smith-wesson.com/webapp/wcs/stores/servlet/Category4_750001_750051_757941_
-1_757938_757812_image
Law Enforcement - Smith & Wesson. (n.d.). Retrieved April 13, 2016, from
http://www.smith-wesson.com/webapp/wcs/stores/servlet/Category3_750001_750051_757787_-
1_Y
Press Release. (n.d.). Retrieved April 13, 2016, from
https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542384677
NRA-ILA | Montana State Profile. (n.d.). Retrieved April 13, 2016, from
https://www.nraila.org/gun-laws/state-gun-laws/montana/
Montana Gun Control Laws - FindLaw. (n.d.). Retrieved April 13, 2016, from
http://statelaws.findlaw.com/montana-law/montana-gun-control-laws.html
California State Law Summary. (n.d.). Retrieved April 13, 2016, from
http://smartgunlaws.org/california-state-law-summary/
Bureau of Firearms. (n.d.). Retrieved April 13, 2016, from https://oag.ca.gov/firearms
Frequently Asked Questions. (n.d.). Retrieved April 13, 2016, from
https://oag.ca.gov/firearms/pubfaqs#3
Which States Have the Most Guns? (n.d.). Retrieved April 13, 2016, from
http://www.washingtonmonthly.com/republic3-0/2015/10/which_states_have_the_most_gun057
962.php
The Demographics and Politics of Gun-Owning Households. (2014). Retrieved April 13, 2016,
from
http://www.pewresearch.org/fact-tank/2014/07/15/the-demographics-and-politics-of-gun-owning
-households/
Will Some Pro-gun Reps. Try to Kill Constitutional Concealed Carry? (n.d.). Retrieved April 13,
2016, from http://cqrcengage.com/gunowners/

The President Gets it Wrong Once Again -- Guns are actually saving lives | GOA News. (n.d.).
Retrieved April 13, 2016, from https://www.gunowners.org/news06182015b.htm
(n.d.). Retrieved April 13, 2016, from
http://www.cnn.com/2014/03/26/tech/innovation/smart-guns-know-whos-firing/
Smart Tech Challenges Foundation. (n.d.). Retrieved April 13, 2016, from
https://smarttechfoundation.org/
(n.d.). Retrieved April 13, 2016, from
http://www.latimes.com/opinion/op-ed/la-oe-0117-stokes-smart-gun-problems-20160117-story.h
tml
Scandium revolvers & frame damage? (n.d.). Retrieved April 13, 2016, from
http://smith-wessonforum.com/s-w-revolvers-1980-present/98562-scandium-revolvers-frame-da
mage.html
Connecticut Concealed Carry Permit Information. (n.d.). Retrieved April 13, 2016, from
http://www.usacarry.com/connecticut_concealed_carry_permit_information.html
Davis, A. F. (2009). Original PDF. Kentucky’s Urban/Rural Landscape. doi:10.15438/rr.5.1.7
Median Annual Household Income. (n.d.). Retrieved April 13, 2016, from
http://kff.org/other/state-indicator/median-annual-income/

Figures
Figure 1.
.

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