Cognex Corporation
"Work Hard, Play Hard"
"To preserve and enhance vision," recited Bill Silver with his hand held vertically on the bridge of his nose, as he entered the office of Robert Shillman. With his usual smile, the CEO looked up from the Cognex Corporation's 1998 Annual Report and returned the corporate salute, adopted from "The Three Stooges.. Silver, the Vice-President of Research and Development, joined Shillman to discuss the future of Cognex Corporation, the company they started together 18 years ago. In spite of its leading position as a manufacturer of machine vision systems, Cognex has hurdled over changes in the industry in recent years. It has survived an industry shakeout of competitors in the early 1990sand managed to sustain stable growth during the slump of the semiconductor industry. However, competitors have recently begun to tap into the OEM (original equipment manufacturer) market, the cornerstone of Cognex's business, and have beaten Cognex to the punch in the international marketplace. Finally, the 1998 Annual Report shows that Cognex's revenues and profits have fallen from the peak levels they had reached in 1997 (Exhibit 1). Robert Shillman, Bill Silver, and their fellow executives must decide which direction the company should take to realize growth and remain the number-one manufacturer of machine vision systems.
COMPANY BACKGROUND
Two brand-new bicycles and $100,000 constituted the initial investment made by Robert Shillman to start Cognex Corporation. A professor in hl1man visual perception at Massachusetts Institute of Technology (MIT), near Boston, Shillman had a vision for the future of machine imaging analysis. In the summer of 1981, with a help of the bicycles, he convinced two graduate students, Marilyn ...