Description of the Situation
Medtronic was established in 1957 by Earl Bakken who made a great contribution in the development of pacemakers (Christensen, 2002). The company became the leader in the sphere of pacemaker production.
There were two major factors that secured the company’s leading position. In the first place, the company had a few competitors at that time.
Medtronic came up with really helpful products which met consumers’ requirements and expectations. The company had a considerable portion (about 70 per cent) of the market share in 1960s.
However, the company faced a lot of difficulties in 1970s up to 1986. First, many competitors entered the market. Secondly, many talented employees left the company as the company’s competitors offered more favorable conditions and were regarded as more promising.
The quality of Medtronic’s product decreased. The company failed to develop new products which could fit rapidly changing demands of consumers.
More so, employees argued that one of the major problems was that there were far too many ideas and projects which led to many failures (Christensen, 2002, p. 4). Finally, inappropriate communication within the company negatively affected the company’s performance.
In 1986, however, the things changed. Ken Anderson managed to obtain the support of executive to launch a new product which proved to be very successful.
Activitrax, the new product developed, was one of a kind as it paced patients’ hearts to “beat more rapidly when they were working hard” and, at the same time, it paced “their hearts to beat more slowly when they were asleep” (Christensen, 2002, p. 4). This made the patients feel stronger.
This product made Medtronic a leader again. However, it is important to note that it is not about the product itself. Mike Stevens reshaped the company’s strategies to make it one of the world leaders.
Thus, Stevens managed to improve communication within the company. He also reshaped the process of decision making. He outlined several key processes which optimized the process of product development.
The major principles Stevens pursued were: speed, platform strategy, project documentation, phase definition, rhythm, and market inputs. Stevens’ actions proved to be successful as Medtronic is now one of the world leaders in the sphere. However, now the company faces a great challenge as it needs to hold the high position, which can be rather difficult.
Evaluation Criteria
When analyzing challenges the company faces, it is important to focus on such factors as product development strategies, communication within the company, human resources management and marketing strategies.
These factors can considerably affect the development of the company. It is important to provide an in-depth analysis of these factors as it will help to work out the most successful strategies which will help the company to maintain its leading position.
Evaluation of the Situation
In the first place, it is important to analyze communication within Medtronic. Stevenson has changed it considerably. In the first place, it is important to note that oral-based patterns were largely changed into written-based ones.
In other words, when some important decisions are made, certain written reports are made where all the major points are revealed. Thus, employees involved in this or that project have an opportunity to stick to the plan.
Of course, there can hardly be misunderstanding when departments have such reports on most important projects. Apart from this, there is proper communication between departments which eliminates (or at least minimizes) any delays.
As far as product development strategies are concerned, the company’s platform strategy enables the company to develop products at lower costs and in a shorter period of time.
Thus, the company does not need to develop new platforms for new products very often as they develop the platform that can be adjusted in different directions according to certain parameters. Admittedly, this reduces the time span which, in its turn, enables the company to introduce new products which meet various requirements of the rapidly changing market.
Besides, the company focuses on patients’ needs when developing new products. For instance, there is a need to develop a pacemaker which is safe in MRI environment and Medtronic has been working on such kind of product (Sutton et al., 2008).
Thus, the company develops products which are potentially successful as they meet specific requirements of consumers. Furthermore, the marketing strategy of the company is also winning.
For instance, the company has worked out a consumer-oriented marketing strategy. Thus, the company focuses on customers’ needs. The company also collaborates with healthcare institutions to raise awareness about the advantages of pacemakers.
It is also important to note that the company has reshaped its pricing policy. Now the company provides low cost pacemakers at low prices while setting fair prices on other models.
As far as human resources management is concerned, it is important to note that the company invests in its staff. The company keeps coaching and training its employees. However, there is rather high rate of turnover: many highly skilled employees tend to leave the company. Therefore, it is important to focus on these issues.
Structured Discussion of the Strength, Weaknesses, Risks and Opportunities
Strength
One of the company’s strengths is its platform strategy. This strategy has enabled the company to become one of the world leading pacemaker manufacturers.
Thus, Medtronic introduces more new products at a shorter period of time. The company’s new marketing strategy is also a winning one. It enables the company to successfully market new products.
The company has also chosen a customer-oriented strategy. Therefore, Medtronic tries to understand real needs of pacemaker users to come up with ideas to meet those requirements.
Finally, the company’s project management has also been improved drastically. The projects are carried out in accordance with specific plans and particular deadlines.
Weaknesses
One of the weaknesses of the company is that it still loses employees. Thus, people who have been trained are leaving to join other companies.
This negatively influences the company’s performance. Of course, this trend should be changed so that the company’s investments into its employees can be repaid.
Risks
Though the company has become one of the leading pacemaker producers, there are still several challenges. In the first place, the company has come up with really successful products.
Thus, there are concerns that there will be no opportunity for further development (Christensen, 2002). Thus, the company’s engineers will need to be really precise and far-seeing.
Medtronic “brings into fashion” new products which are highly valued. Therefore, it is extremely important to maintain high quality of products and unique approach of the company.
Opportunities
Nonetheless, there are a lot of opportunities to develop the business. In the first place, the pacemakers still need improvements to meet specific need of the patients. The company is now working on new models to meet these requirements. Sutton et al. (2008) report on one of such projects.
Apart from opportunities concerning product development, the company has many opportunities in the sphere of marketing. In the first place, the demand of pacemakers is now increasing in developed countries as ‘baby boomers’ are reaching the age when pacemakers are necessary.
At that, the number of competitors has drastically decreased over the past decade. More so, economic growth in many developing countries of Asia, Eastern Europe and South America has made pacemakers affordable for many citizens of those countries. It goes without saying that this market offers many opportunities for Medtronic.
Qualifications
It is important to note that the company has developed effective project management strategies. Thus, all projects are planned in detail.
Employees have to report about the work completed at certain stages (or phases). This helps to meet the deadlines and, as a result, to introduce new products on time.
Evaluation Action Plan
Strength
The company’s platform strategy has proved to be effective. Therefore, it is important to keep to it. Thus, the company will continue developing platforms which can be adjusted in accordance with numerous parameters.
However, it is also important to keep working on creation of new platforms which can meet consumers’ requirements that constantly appear. As for the company’s marketing strategy, it also needs special attention.
The company should work out successful strategies to enter the market of developing countries. However, the company should work out specific programs for each country. It is essential to make sure that strategies chosen can be effective in this or that region.
This is quite a great challenge the company has to face. As has been mentioned above the company has chosen a consumer-oriented approach which is winning in present-day environment.
Of course, the company will need to carry out surveys and some research to define the features which can be valued by patients as well as cardiologists. Finally, the new project management strategies exploited have enabled the company to regain its leading position.
However, the company has to make sure the phase strategy remains effective. Thus, it is always important to make sure that the plans worked out are executable and deadlines are realistic.
At the same time, the plans should be rather flexible to be effective in the rapidly changing market. Finally, the company should pay special attention to communication strategies. Many companies are often overwhelmed by bureaucratic trends. Thus, written and oral communication should be balanced in Medtronic.
Weaknesses
It is also important to deal with human resources management strategies. Thus, Stevenson claims that they pay much attention to their employees’ development (Christensen, 2002).
However, the company still loses employees. Therefore, it is important to work out a new system of values to make employees more loyal. Apparently, coaching and training are not enough.
It is necessary to provide more opportunities for promotion. Apart from this, the employees should have more freedom to bring their ideas to life.
For instance, Christensen (2002) states that some employees have left the company to be able to realize their ideas, which was impossible within Medtronic.
Thus, the company should address this issue to make the employees more loyal. In this way, the company’s investments into the staff will be repaid.
Reference List
Christensen, C.M. (2002). We’ve got rhythm! Medtronic Corporation’s cardiac pacemaker business. Harvard Business School, Case 698-004.
Sutton, R., Kanal, E., Wilkoff, B.L., Bello, D., Luechinger, R., Jenniskens, I., Hull, M. & Sommer, T. (2008). Safety of magnetic resonance imaging of patients with a new Medtronic EnRythm MRI SureScan pacing system: Clinical study design. Trials, 9(68), 1-8.