Case Study Description of Omar Ishrak: Building Medtronic Globally
Omar Ishrak, Medtronic's first non-American CEO, aims to reinvigorate the medical device maker's growth by focusing on emerging markets, therapy innovation, and creative business models. In 2012, budget constraints in mature economies, the lack of new medical therapies coming to market, and the decline in growth of Medtronic's core businesses has reduced the company's once dynamic growth close to zero. As the newly appointed CEO, Ishrak faces the formidable challenge of restoring the company's growth. In his first 18 months as CEO, he has laid the groundwork for future growth by ramping up R&D investment in breakthrough therapy innovations. To bolster Medtronic's near-term prospects, he has supported creative product and business model innovations aimed at overcoming adoption barriers in emerging economies. Ishrak restructured his executive team and their responsibilities: the heads of Medtronic's global operating regions and major countries, who previously reported to the head of international, now report directly to the CEO, putting seven non-Americans on the excecutive committee. In another important milestone, Medtronic acquired a Chinese orthopedics company, which became its first fully integrated business unit outside the U.S. Ishrak is trying to decide whether these steps are sufficient to transform Medtronic from a multinational into a truly global company and restore its growth.
Swot Analysis of "Omar Ishrak: Building Medtronic Globally" written by Bill George, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ishrak Medtronic's facing as an external strategic factors. Some of the topics covered in Omar Ishrak: Building Medtronic Globally case study are - Strategic Management Strategies, Emerging markets, Globalization, Health, Innovation, Leadership, Leading teams, Manufacturing, Strategy and Organizational Development.
Some of the macro environment factors that can be used to understand the Omar Ishrak: Building Medtronic Globally casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing energy prices, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Omar Ishrak: Building Medtronic Globally
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Omar Ishrak: Building Medtronic Globally case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ishrak Medtronic's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ishrak Medtronic's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Omar Ishrak: Building Medtronic Globally can be done for the following purposes –
1. Strategic planning using facts provided in Omar Ishrak: Building Medtronic Globally case study
2. Improving business portfolio management of Ishrak Medtronic's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ishrak Medtronic's
Strengths Omar Ishrak: Building Medtronic Globally | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ishrak Medtronic's in Omar Ishrak: Building Medtronic Globally Harvard Business Review case study are -
Highly skilled collaborators
– Ishrak Medtronic's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Omar Ishrak: Building Medtronic Globally HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Ishrak Medtronic's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Ishrak Medtronic's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Omar Ishrak: Building Medtronic Globally Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Ishrak Medtronic's is one of the most innovative firm in sector. Manager in Omar Ishrak: Building Medtronic Globally Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Ishrak Medtronic's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ishrak Medtronic's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Ishrak Medtronic's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ishrak Medtronic's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Omar Ishrak: Building Medtronic Globally Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Ishrak Medtronic's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Ishrak Medtronic's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ishrak Medtronic's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Organizational Development field
– Ishrak Medtronic's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ishrak Medtronic's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Ishrak Medtronic's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ishrak Medtronic's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Ishrak Medtronic's in the sector have low bargaining power. Omar Ishrak: Building Medtronic Globally has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ishrak Medtronic's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Omar Ishrak: Building Medtronic Globally Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Omar Ishrak: Building Medtronic Globally | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Omar Ishrak: Building Medtronic Globally are -
Workers concerns about automation
– As automation is fast increasing in the segment, Ishrak Medtronic's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Ishrak Medtronic's is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Ishrak Medtronic's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ishrak Medtronic's to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Omar Ishrak: Building Medtronic Globally HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ishrak Medtronic's has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Omar Ishrak: Building Medtronic Globally HBR case study mentions - Ishrak Medtronic's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Ishrak Medtronic's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Omar Ishrak: Building Medtronic Globally should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ishrak Medtronic's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Omar Ishrak: Building Medtronic Globally can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Omar Ishrak: Building Medtronic Globally, it seems that the employees of Ishrak Medtronic's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Ishrak Medtronic's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ishrak Medtronic's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ishrak Medtronic's supply chain. Even after few cautionary changes mentioned in the HBR case study - Omar Ishrak: Building Medtronic Globally, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ishrak Medtronic's vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Omar Ishrak: Building Medtronic Globally, in the dynamic environment Ishrak Medtronic's has struggled to respond to the nimble upstart competition. Ishrak Medtronic's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Ishrak Medtronic's products
– To increase the profitability and margins on the products, Ishrak Medtronic's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Omar Ishrak: Building Medtronic Globally | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Omar Ishrak: Building Medtronic Globally are -
Buying journey improvements
– Ishrak Medtronic's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Omar Ishrak: Building Medtronic Globally suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ishrak Medtronic's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Ishrak Medtronic's has opened avenues for new revenue streams for the organization in the industry. This can help Ishrak Medtronic's to build a more holistic ecosystem as suggested in the Omar Ishrak: Building Medtronic Globally case study. Ishrak Medtronic's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Ishrak Medtronic's can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Ishrak Medtronic's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ishrak Medtronic's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Ishrak Medtronic's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ishrak Medtronic's can use these opportunities to build new business models that can help the communities that Ishrak Medtronic's operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ishrak Medtronic's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ishrak Medtronic's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ishrak Medtronic's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ishrak Medtronic's to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ishrak Medtronic's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Omar Ishrak: Building Medtronic Globally, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Ishrak Medtronic's to increase its market reach. Ishrak Medtronic's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Omar Ishrak: Building Medtronic Globally External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Omar Ishrak: Building Medtronic Globally are -
Regulatory challenges
– Ishrak Medtronic's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Omar Ishrak: Building Medtronic Globally, Ishrak Medtronic's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Ishrak Medtronic's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ishrak Medtronic's.
Shortening product life cycle
– it is one of the major threat that Ishrak Medtronic's is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ishrak Medtronic's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ishrak Medtronic's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ishrak Medtronic's business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ishrak Medtronic's in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Ishrak Medtronic's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Ishrak Medtronic's needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ishrak Medtronic's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Ishrak Medtronic's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Ishrak Medtronic's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ishrak Medtronic's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Omar Ishrak: Building Medtronic Globally Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Omar Ishrak: Building Medtronic Globally needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Omar Ishrak: Building Medtronic Globally is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Omar Ishrak: Building Medtronic Globally is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Omar Ishrak: Building Medtronic Globally is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ishrak Medtronic's needs to make to build a sustainable competitive advantage.