Case Study Description of I've Got Rhythm: Selling Cardiac Rhythm Management Devices
The head of sales and marketing in a large medical devices firm must decide how to assign his sales force. He compares selling in the pharma, specialty pharma, and device industries and analyzes the reasons for the differences.
Authors :: Regina E. Herzlinger, William Lagor, Christopher Perry, Scott St. Germain
Swot Analysis of "I've Got Rhythm: Selling Cardiac Rhythm Management Devices" written by Regina E. Herzlinger, William Lagor, Christopher Perry, Scott St. Germain includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rhythm Pharma facing as an external strategic factors. Some of the topics covered in I've Got Rhythm: Selling Cardiac Rhythm Management Devices case study are - Strategic Management Strategies, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the I've Got Rhythm: Selling Cardiac Rhythm Management Devices casestudy better are - – there is backlash against globalization, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of I've Got Rhythm: Selling Cardiac Rhythm Management Devices
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in I've Got Rhythm: Selling Cardiac Rhythm Management Devices case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rhythm Pharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rhythm Pharma 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices can be done for the following purposes –
1. Strategic planning using facts provided in I've Got Rhythm: Selling Cardiac Rhythm Management Devices case study
2. Improving business portfolio management of Rhythm Pharma
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rhythm Pharma
Strengths I've Got Rhythm: Selling Cardiac Rhythm Management Devices | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rhythm Pharma in I've Got Rhythm: Selling Cardiac Rhythm Management Devices Harvard Business Review case study are -
Diverse revenue streams
– Rhythm Pharma is present in almost all the verticals within the industry. This has provided firm in I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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.
Highly skilled collaborators
– Rhythm Pharma 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 Rhythm Pharma 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.
Analytics focus
– Rhythm Pharma is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Regina E. Herzlinger, William Lagor, Christopher Perry, Scott St. Germain can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Rhythm Pharma 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Rhythm Pharma 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 Rhythm Pharma
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rhythm Pharma does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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.
Superior customer experience
– The customer experience strategy of Rhythm Pharma in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Rhythm Pharma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rhythm Pharma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Rhythm Pharma 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 Rhythm Pharma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Rhythm Pharma in the sector have low bargaining power. I've Got Rhythm: Selling Cardiac Rhythm Management Devices has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rhythm Pharma to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses I've Got Rhythm: Selling Cardiac Rhythm Management Devices | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of I've Got Rhythm: Selling Cardiac Rhythm Management Devices are -
Aligning sales with marketing
– It come across in the case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices can leverage the sales team experience to cultivate customer relationships as Rhythm Pharma is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices, in the dynamic environment Rhythm Pharma has struggled to respond to the nimble upstart competition. Rhythm Pharma has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Rhythm Pharma has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Rhythm Pharma has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rhythm Pharma is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Rhythm Pharma supply chain. Even after few cautionary changes mentioned in the HBR case study - I've Got Rhythm: Selling Cardiac Rhythm Management Devices, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rhythm Pharma vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices, is just above the industry average. Rhythm Pharma needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Rhythm Pharma has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices, it seems that the employees of Rhythm Pharma 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Regina E. Herzlinger, William Lagor, Christopher Perry, Scott St. Germain suggests that, Rhythm Pharma 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.
Low market penetration in new markets
– Outside its home market of Rhythm Pharma, firm in the HBR case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities I've Got Rhythm: Selling Cardiac Rhythm Management Devices | 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices are -
Creating value in data economy
– The success of analytics program of Rhythm Pharma has opened avenues for new revenue streams for the organization in the industry. This can help Rhythm Pharma to build a more holistic ecosystem as suggested in the I've Got Rhythm: Selling Cardiac Rhythm Management Devices case study. Rhythm Pharma can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rhythm Pharma 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.
Buying journey improvements
– Rhythm Pharma can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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.
Building a culture of innovation
– managers at Rhythm Pharma 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 Sales & Marketing segment.
Learning at scale
– Online learning technologies has now opened space for Rhythm Pharma 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.
Using analytics as competitive advantage
– Rhythm Pharma 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rhythm Pharma to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rhythm Pharma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Rhythm Pharma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Rhythm Pharma in the consumer business. Now Rhythm Pharma can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Rhythm Pharma can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rhythm Pharma 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, Rhythm Pharma can use these opportunities to build new business models that can help the communities that Rhythm Pharma operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rhythm Pharma 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, I've Got Rhythm: Selling Cardiac Rhythm Management Devices, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats I've Got Rhythm: Selling Cardiac Rhythm Management Devices External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study I've Got Rhythm: Selling Cardiac Rhythm Management Devices are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rhythm Pharma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Rhythm Pharma is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Rhythm Pharma 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rhythm Pharma 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices .
High dependence on third party suppliers
– Rhythm Pharma high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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. Rhythm Pharma needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Rhythm Pharma 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 Sales & Marketing industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rhythm Pharma in the Sales & Marketing industry. The Sales & Marketing 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.
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. Rhythm Pharma 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.
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 Rhythm Pharma.
Increasing wage structure of Rhythm Pharma
– 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 Rhythm Pharma.
Weighted SWOT Analysis of I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 I've Got Rhythm: Selling Cardiac Rhythm Management Devices 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 Rhythm Pharma needs to make to build a sustainable competitive advantage.