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 - – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , geopolitical disruptions, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Diverse revenue streams
– Ishrak Medtronic's is present in almost all the verticals within the industry. This has provided firm in Omar Ishrak: Building Medtronic Globally case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Ishrak Medtronic's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ishrak Medtronic's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Ishrak Medtronic's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Omar Ishrak: Building Medtronic Globally - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Organizational Development industry
– Omar Ishrak: Building Medtronic Globally firm has clearly differentiated products in the market place. This has enabled Ishrak Medtronic's to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Ishrak Medtronic's to invest into research and development (R&D) and innovation.
Strong track record of project management
– Ishrak Medtronic's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Ishrak Medtronic's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Omar Ishrak: Building Medtronic Globally that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Omar Ishrak: Building Medtronic Globally can leverage the sales team experience to cultivate customer relationships as Ishrak Medtronic's is planning to shift buying processes online.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Ishrak Medtronic's, firm in the HBR case study Omar Ishrak: Building Medtronic Globally needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Bill George, Natalie Kindred suggests that, Ishrak Medtronic's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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 -
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Ishrak Medtronic's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Using analytics as competitive advantage
– Ishrak Medtronic's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Omar Ishrak: Building Medtronic Globally - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ishrak Medtronic's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ishrak Medtronic's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ishrak Medtronic's in the consumer business. Now Ishrak Medtronic's can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ishrak Medtronic's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ishrak Medtronic's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Omar Ishrak: Building Medtronic Globally .
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ishrak Medtronic's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ishrak Medtronic's.
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.
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.