Optivus Technology: Strategic Management Essay

Executive Summary

Optivus Proton Therapy, Inc. is a pioneer in the field of proton therapy technology. This company offers a true turnkey Proton Beam Therapy Solution. By mid-2000, Optivus was a more structured company than it had ever been, with levels of management it had lacked in earlier years. Ironically the buildup was in preparation for growth was yet prospective: it hinged on sale f a first proton treatment center, followed in turn by subsequent sales-none of which had yet occurred, despite some seven years of marketing and sales efforts by the company. In expanding options, the hope of them is that the value system embedded in its self-directed team structure and its original constitution would be the template for the APTS cancer treatment centers to be cured in the years ahead. Thus as Slater watched the debate unfold about the future of teams, they would be seeking to answer the question of how conventional an organization would be willing to let Optivus become.

The current problems that Optivus Technology is facing are like lack of employee satisfaction and fear of them being fired, hard competition in the global market, a broader target that doesn’t have proper guidelines or strategy. Optivus Technology has quite limited, mainly focusing on industry trade shows. But they want to envision a marketing strategy that ultimately would target hospitals, insurance companies, doctors, and finally, consumers.

Optivus Technology is an innovative company that is willing to take risks in becoming the leading company of proton facility, as they were the pioneers of the technology. They have spent a significant amount of money in developing processes. Optivus’s success would hinge on achieving a first-mover advantage in the market as quickly as possible so that its reputation for clinical success in initial facilities would establish it as the provider of choice. Subsequently, experience and learning effects would give it increasing cost-efficiencies that competitors would have difficulty matching. But to achieve a first-mover position, time was of the essence.

Unusual proton facilities were built at the lowest possible cost by Optivus Technology Inc. The emphasis was on plant modernization, making a common target, and efficiency improvements. Optivus was known for pioneering proton technology. The main R&D (Research and development) strategy was to monitor activities in worldwide proton facilities providing along with other technology. The management philosophy of Optivus Technology Inc. was about honesty, employee empowerment, and fairness. Many of the processes were changed as a result of employee suggestions or requests. Management believed that the sufferers could say better about the sufferings. Like that employees know better about the processes, and they were best suited to suggest improvements techniques and strategies. It is obvious that Optivus Technology should choose the alternative of making and implementing strategy as it gives a lot of pros. It also overlaps the pros of other alternatives. So it will be wise to select this alternative. In the end, it can be said that Optivus Technology Inc. is working with technology related to the human body and diseases as well. It is, in fact, an appreciable work. Though they have a profit-making motive, they are making it through serving people. Their mission of getting ridding cancer patients is very humane and appraisable work indeed.

Problem Identification

Optivus Proton Therapy, Inc. is a pioneer in the field of proton therapy technology. This company offers a true turnkey Proton Beam Therapy Solution. They offer the therapy to those institutions that are committed to bringing the most precise form of radiation therapy to their communities. Basically, Proton Beam Therapy (PBT) is a form of radiation therapy. It provides outstanding advantages over conventional radiation treatment and surgery. For certain types of cancers and other diseases, it is much effective as well. Proton therapy is not new or experimental for today’s world. The first proton patient was treated in 1954 at the University of Berkeley in California. Protons provide superior dose distribution to cancerous cells. Protons do it while sparing the surrounding healthy tissue. It also provides a dose while eliminating pain and otherwise life impairing. Side effects can be associated with surgery and other forms of radiation therapy. Optivus’ modular and scalable Conforma 3000® leads the industry in patient throughput.¹

Past Strategy

By mid-2000, Optivus was a more structured company than it had ever been, with levels of management it had lacked in earlier years. Ironically the buildup was in preparation for growth was yet prospective: it hinged on sale f a first proton treatment center, followed in turn by subsequent sales-none of which had yet occurred, despite some seven years of marketing and sales efforts by the company.

Since 1993, Slater and his executives had talked with dozens of hospitals. They had been engaged in 10 separate negotiation efforts with potential portion center buyers in the United States, Europe, and Asia, getting as far as three signed letters of intent before the deals had fallen through or petered out. The reasons varied. Naturally, all negotiations were influenced to some degree by the seemingly eye-popping $85 million costs of a proton facility, though less by the amount itself than by the challenge posed in building the interest, consensus, and commitment of a hospital or university governing board to buy a system, then securing financing.²

Their key strategies included the following:

• The structure would be organized around “Specialization Teams” in key areas corresponding to traditional departments and project teams created as necessary to undertake specific projects. Both types of teams would carry out the job of defining their operating policies, standards, and practices. Participation in project teams was voluntary and opened to all employees.
• Individuals will be fully responsible for their own task allocation. Members of project teams could not be forced to do something that they hadn’t agreed to in joining. They could quit the team without penalty if they chose to.
• Specialization or project teams had the right to fire the team leader. A member or member seeking to fire a team leader had to make their case, and team leaders had the right to defend themselves.
• Documentation of standards and specifications for the proton treatment system was to be developed in all areas that were required for federal drug administration approval to sell it as a medical device. It was the responsibility of team leaders to see that the necessary documentation was produced and of team members to support them.

Current Strategy

In expanding options, the hope of them is that the value system embedded in its self-directed team structure and its original constitution would be the template for the APTS cancer treatment centers to be cured in the years ahead. Thus as Slater watched the debate unfold about the future of teams, they would be seeking to answer the question of how conventional an organization would be willing to let Optivus become.

Their key strategies for the current situation included the following:

• To build at least 100 proton systems in America and overseas over the next 20 years through a process and structure, not unlike franchising.
• All proton facilities would be nearly identical in terms of patients, although the technology package could vary depending on the focus of a hospital.
• A subsidiary of Optivus Technology to be named American Proton Treatment Systems (APTS) would be the parent of subsidiary companies established to operate each of the proton treatment systems.
• Each subsidiary would take a name such as ACME Proton Treatment Associates.
• Product research and development and the accompanying responsibility for advancing the technology, upgrading component systems, and diffusing enhancements to existing and future facilities.
• To raise its own capital and stock.
• Hold a partial ownership stake in APTS while APTS would hold partial stakes in each facility and operate the proton center under contract to the site co-workers, working with the clinical staff of the affiliated hospitals.
• Put up the land for the facility and would build the physical structure to Optivus specifications, which the company would leaseback.
• To be carried out on a scale commensurate with Optivus’s corporate vision.

Current Problems /Issues

The current problems that Optivus Technology is facing are like lack of employee satisfaction and fear of them being fired, hard competition in the global market, a broader target, which doesn’t have proper guidelines or strategy. Optivus Technology has quite limited, mainly focusing on industry trade shows. But they want to envision a marketing strategy that ultimately would target hospitals, insurance companies, doctors, and finally, consumers.

Analysis & Evaluation

External Analysis

Environmental Analysis

The economy of the world is very important to consider because the world economy influences the business or technology to be globally marketed. But Optivus is not concerned about their global market or reputation, employee’s satisfaction; rather, they are concerned with envisioning a marketing strategy that would target the entire market of the hospital, doctors, insurance companies, consumers, and so on. This type of strategy is making their employees less motivated to their job rather fearful of their work. On the other hand, the less capable of serving the people (focusing on industry trade shows only) creates great concern for them as a competing Belgian company has introduced a new proton facility. This foreign company, with other companies, is receiving various tax advantages, funding from their governments for introducing their technology. This, in turn, helps to reduce their expenses and precede their innovations. As a result, the domestic company (Optivus Technology) simply cannot compete in these conditions.

Optivus Technology is an innovative company that is willing to take risks in becoming the leading company of proton facility, as they were the pioneers of the technology. They have spent a significant amount of money in developing processes (both successful and unsuccessful ones). And now they are thinking of making another marketing strategy to introduce their large project. The problem with this is that competitors attempt to copy their innovations without sacrificing the required rate of spending. In this case, licensing is an important external factor that needs to be considered by Optivus Technology.

Competitive Analysis

Optivus is facing a potentially serious competitor. This was Jon Beam Applications (IBA), a Belgian company with 1999 revenues of some $185 million, which was constructing a second U.S proton facility, called the Northeast Proton Center, at Massachusetts General Hospital in Boston. However, the Mass General facility, begun in 1993, was still under construction in 2000, had yet to treat its first patients, and might be two years yet in doing so. In practice, the $180 million, 30-year investment embodied in Optivus’s technology and its commercial experience, coupled with a variety of patents related to its proton beam technology, created large barriers to entry for rivals like IBA. Nonetheless, Optivus’s success would hinge on achieving a first-mover advantage in the market as quickly as possible so that its reputation for clinical success in initial facilities would establish it as the provider of choice. Subsequently, experience and learning effects would give it increasing cost-efficiencies that competitors would have difficulty matching. But to achieve a first-mover position, time was of the essence.

IBA has worked to establish their field and attract the patients of Optivus. The fact is that they are much more concerned about their development and performance appraisal. As a result, Optivus is still now in a higher position in the market share. But according to our assumption, Otivus will get in trouble after few years as IBA is becoming more capable of attracting the optimum patients of Optivus.

Five Force Of Competition

The Bargaining Power of Customers

The bargaining power of customers of Optivus is low because Optivus is a service center that basically serves people with services. They are not much concerned about their customer’s bargaining power. On the other hand, they try to make things convenient for the customers so that the customers need not bargain.

• The concentration of client to the concentration of firm ratio implies the bargaining power of customers of Optivus Technology.
• Client volume is another symbol for indicating the bargaining power of customers.
• If clients do not have enough information available, they may bargain with the technology company.
• The ability to backward integrate is another bargaining power of the customer.
• Availability of existing substitute offers may make the clients or patients think that they have bargaining power.

The Bargaining Power of Suppliers

As the organization has to have a lot of materials for serving people properly, that’s why the suppliers have the power of bargaining with authority.

• The degree of differentiation of offers may imply the bargaining power of suppliers who supply the materials needed to make the technology upgrade.
• The presence of substitute offers also makes the suppliers more concerned about their job. And this influences them to bargain with the buyer.

The Threat of New Entrants

The threat of new entrants is very high. Because it is a very sensitive area to work in. And when newcomers want to enter, they have to maintain some formalities, which are the tests for them.

• The existence of barriers to entry impedes the newcomers of proton technology to invest.
• Switching costs sometimes create a threat for new entrants.
• Capital requirements for today’s market are high, which creates a threat to the new entrants.
• Access to distribution is mandatory for ensuring high technology to the users.
• Government policies sometimes impede people from investing. So it must be lenient for the technology inventor companies.

The Threat of Substitute Offers

The threat of substitute offers is high as the substitute products, or offers have to compete with the up-to-the mark existing offers.

• Client propensity to substitute offers may create a threat for the business people.
• The relative service performance of substitutes creates competition among the existing groups.
• Perceived levels of offers differentiation often create a threat to the people of the technology market.

The Intensity of Competitive Rivalry

The intensity of competitive rivalry is moderate. But day-by-day it is going towards high.

• A number of competitors, in one sense, makes the market more standard; on the other hand, it creates difficulty to keep the position for a long.
• The rate of Banking growth often influences people of the technology sector to invest in a large manner or in a small portion.
• Exit barriers create the intensity of competitive rivalry.
• The diversity of competitors make the competition more realistic and up to the mark.
• Informational complexity and asymmetry is another intensity of competitive rivalry.
• Fixed cost allocation per value-added sometimes makes the competition more lively and tough.
• The level of advertising expense makes the cost high, and often it makes competitive rivalry.

Though not supported by all, some specialists of technology argue or suggest that a 6th force should be added to this list to include a variety of stakeholder groups from the task environment. This force is suggested as “Relative Power of Other Stakeholders.” Some examples of these stakeholders are governments who regulate the technology implementation policy, local communities, creditors, shareholders, and other related groups.

Key success factors

1. High labor contribution.
2. Implementation of proton technology in a cost-effective manner.
3. Access to financial capital for continued modernization of plants.
4. High quality of technology and implementation of that.
5. Managerial experience and willingness to take risks, and the intention to provide sufficient quality service to the clients.
6. Existence of group works.
7. Loyalty to work and organization.
8. Proper utilization of resources.
9. High rate of awareness.
10. Friendly working environment.

Internal Analysis ³

Optivus is quite strong in finance. And as their sale is increasing day by day, their return on invested capital is getting high. As a result, they are becoming much enriched with their technology and money as well. But comparing the current situation of Optivus and other organizations, we have found that they are in a hard time competing with the newcomers. So to work with future projects, future expansions, and to defeat competitors, they should be much aware of their finance. Because to give up-to-the-mark services to the clients, they will need much quantity of money.

For Optivus Technology, one thing can be recommended. And that is, they may reduce their operational costs. Because every year, they are incurring 1.76 million for operating the organization, which is no longer required for them in this situation.

Financial, Marketing, Production And Technology Strategies

Unusual proton facilities were built at the lowest possible cost by Optivus Technology Inc. The emphasis was on plant modernization, making a common target, and efficiency improvements. Optivus was known for pioneering proton technology. The main R&D (Research and development) strategy was to monitor activities in worldwide proton facilities providing along with other technology.

Though Optivus Technology was built in the 20^th century, in this short time, they made their position in the technology market, especially for the cure of people from cancer through proton facilities. Due to high competition in the technology market, they more emphasize their optimum clients or patients who can be benefited from their technology.

Workers were able to work together efficiently to exceed the standards. But they were not satisfied enough as Optivus’s target was not to satisfy the employees but to ensure high-quality service with a proton facility for the clients.

Management, Leadership And Organizational Strategies

The management philosophy of Optivus Technology Inc. was about honesty, employee empowerment, and fairness. Many of the processes were changed as a result of employee suggestions or requests. Management believed that the sufferers could say better about the sufferings. Like that employees know better about the processes, and they were best suited to suggest improvements techniques and strategies.

Managers spent time in the plants with the employees to ensure good and up-to-the-mark technology or policies. This was the best way to encourage employees to communicate with management and ask questions. Each employee was entitled to the same benefits. But the authority never pays only concentration on employee satisfaction. For that reason, Optivus did not use job descriptions or performance appraisals for the employees. Matters were dealt with directly and immediately as they arose. Employees were kept informed of the company’s performance, as they had to provide necessary suggestions to the management. Annual reports were provided to each employee for awareness increasing.

Corporate And Functional Strategies

By providing public awareness like advertising, public relations, and environmental and legal consultation, Optivus Technology established a simple, technology and service-providing corporation. Suppliers were invited to make consult for new technology suggestions, global market impact, and cost-saving ideas.

SWOT Analysis

Strengths

1. The company is known for its role in pioneering proton facilities. Along with proton facilities, they introduced other technologies also which were acceptable to people.
2. Optivus Technology Inc. has the willingness to take risks and go against the norms if needed to save the cancer people or any other wounded people who may be facilitated by their product or technology.
3. They follow a cost-effective manner to provide enough facilities for the patients so that the technology can reach the entire global people.
4. To provide time-oriented services to the patients, they work hard and give full effort.
5. They follow a low-cost strategy so that they can reach the people easily and the people can have the opportunity properly.
6. Optivus can construct their own plant by less than competitors in some cases.
7. Optivus Technology was able to hire and retain some of the best management, executives, and board of directors by whom they achieved their success in the technology area.

Weaknesses

1. Employees are not satisfied with their job, as they have to be afraid of their job all the time.
2. As the employees are not satisfied and always remain afraid of their job, their quality of work gets deteriorated.
3. The company doesn’t look at the expenditures of the divisions. As a result, they have to face some problems. They need to ensure that they contribute at least a return of 30%.
4. There were disagreements over the company’s management and direction from 2003-2004, which resulted in some key people leaving the company. Due to this recent management turnover, there were adverse effects on the company’s performance and inventions.

Opportunities

1. The presence of competitors makes the market more lively and standard for market technology and policies. Optivus has IBA, which makes the market more competitive.
2. A potential increase in market share makes competitors leave the industry. It makes Optivus more efficient and creates a market more favorable for them.
3. They are the pioneers in proton facilities. They can differentiate their product from competitors. It is an opportunity for them to market their technology around the world.
4. According to Slater, the inventions of new facilities and other technologies can make their organization more outstanding.
5. Through proton facilities, Amy achieves the loyalty of the clients, which may help them to get the potential market easily in the future.

Threats

A slow economy often creates threats for Optivus technology Inc. and its policies and technologies as well.

• Increase in the price of materials needed to make the technology or policies create a threat for them to survive in the vast market.
• Global capacity and demands often create threats for them.
• Subsidies that are given to some foreign companies make the competition high which compels them to give more effort.
• Increasing environmental rules and regulations impedes the company’s regular work and inventions as well.

Discussion Of Alternatives

Optivus Technology Inc. may have some alternatives to overcome the problems. The alternatives may be like the following:

• Remodeling HRM activities.
• Market demand prediction.
• Be aware of the competitors.
• I am making a time-oriented and effective strategy for solving the problems and.

Remodeling HRM Activities

Optivus doesn’t care much about the employee’s satisfaction. They should care about that to solve the problems. If they can do so, they will have must effort from the workers, their inventions will get a new standard dimension, they will be able to compete with their competitors, consumers will get high-quality service, and the profit margin will be high. On the other hand, for doing so, they will have to spend a lot.

Market Demand Prediction

Every day a lot of things happen in the world. They should be aware of that because these issues create a place of demand. And to compete with others, they should be knowledgeable about the situations of the market. To do this, they need to spend, but it will return much more than that.

Be Aware Of The Competitors

Optivus’s competitor is basically IBA. So they should be aware of the group. With this awareness, they will be able to know about their planning, strategies, policies, and many other things. This information will help them to make decisions. Though they will need much effort and money for that, it will ensure their position on the global market of technology.

Strategy Making And Implementing

Turnaround Strategies For Optivus

The group of Optivus may launch a three-pronged strategy in order to reverse its declining fortunes. They are:

1. You are gaining access to fresh capital.
2. We are reducing surplus capacity.
3. Revitalizing a weak product offering

Gaining Access to Fresh Capital

Optivus may outline its restructuring plan, which involves cutting costs by $ 1.35 billion, increasing R&D spending by $100 million to $1.2 billion. The launch of new policies and technologies may take place to expand its business. The group may plan to reduce its cost and make a common proton policy. So they may pay attention to gain access to fresh capital.

Reducing Surplus Capacity

Reducing the surplus capacity of inventory may be a good strategy for Optivus. Their base recovery plan may rely on investing more than $ 1.8 billion in the next three years to launch 5 new models or policies, or technologies. They should plan to sharply reduce unprofitable areas and technologies.

Revitalizing Weak Product/Technology Offerings

The restructuring plan may face huge opposition from labor unions, governments and clients as well. The planned job cuts may lead to strikes and street protests. But in some cases, the government influenced other companies and implied some policies, which caused problems for Optivus to survive in the competitive market. As a result, they may revitalize any weak product or technology offerings.

Decision Criteria

Considering the current situation of Optivus, you can see that they need to motivate employees to be more aware, at a time they need to be knowledgeable about the different global issues, aware of the competitors, and making effective strategies as well. If you see the pros and cons of these alternatives, you can easily make a decision about which alternative should be accepted. As an example:

From the above analysis, it is obvious that Optivus Technology should choose the alternative of making and implementing strategy as it gives a lot of pros. It also overlaps the pros of other alternatives. So it will be wise to select this alternative.

Recommendations

After careful analysis of both internal and external factors, as well as the various alternatives available to Optivus, it is our recommendation that Optivus Technology Inc. should select the alternative of making and implementing effective strategies. This will introduce access to fresh capital, reducing surplus capacity, revitalizing weak product offerings, etc. This would enable Optivus to begin operations immediately and avoid the wait time of a new facility being built.

Action Plan

To ensure a distinctive position in the technology market, Optivus should make an action plan. How can they do that?

1. I am reviewing the total overview of the company.
2. We are identifying the problems and weak areas.
3. We are identifying the reasons behind the problems.
4. Find out the financial condition of the company.
5. We are collecting enough data to solve the problem.
6. Sort out the data according to their importance and relevance.
7. They are making alternatives.
8. Weight the alternatives
9. We are selecting the best alternatives.
10. Implement the alternative in a small project.
11. Evaluate the result
12. You are comparing the result with the expected one.
13. If the result is satisfactory, then implement them in a large manner.

Justification for Action Plan

As Optivus Technology is a pioneer company in introducing the Optimus technology and the proton policy as well, then their planning should have proper justification for that. According to the above analysis, if Optivus do so, then they will have the following advantages:

Their problems will be solved in a systematic way.

1. Their quality of work will be enriched.
2. They will have a good rate of profit.
3. Clients’ satisfaction will be achieved easily.
4. Competitors will not be able to take a position in the market of technology.
5. Their cost of planning and implementing that plan will be higher.
6. Employees’ satisfaction will be high, and their work will be more standard.
7. The evaluation of their work will lead them towards perfection.
8. They will be able to keep the position of a pioneer in the global market of technology.
9. Their reputation will be high.
10. Many cancer and severe disease patients will be facilitated by their inventions.

Contingency Plan

A contingency plan means that kind of plan, which is created considering any special situation or problems. Suppose if Optivus faces the problem of proton policy implementation. And the problem may be created by the competitors who are copying their strategies in inventing another policy. In this case, if Optivus fails to follow the mentioned strategies, they may identify the source by which they are getting Optivus’s hidden information. Secondly, if they face any problem like a failure in operating the technology, then they may introduce a new system or make a group of specialists identify the problem and the way to solve that. That means in case of the failure of their maintaining strategies; they may take the help of any professional organization or devil’s advocate who will adjust all the things by getting paid.

In the end, it can be said that Optivus Technology Inc. is working with technology related to the human body and diseases as well. It is, in fact, an appreciable work. Though they have a profit-making motive, they are making it through serving people. Their mission of getting ridding cancer patients is very humane and appraisable work indeed.

Bibliography

1. Optivus Technology, Inc. (2007)
2. Michael Diamond, Helping Better Health Care Compute.” San Bernardino Country Sun, 1998.
3. Lobbying Spending Database: Optivus Technology Summary, (2004)