Medtronic: Making the Big Leap Forward (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Medtronic: Making the Big Leap Forward (A)
In 2014, Medtronic was about to execute a $50 billion acquisition of Ireland-based Covidien. Medtronic CEO Omar Ishrak was committed to building the largest medical technology company in the world while broadening its ability to fulfill its mission of "alleviating pain, restoring health, and extending life" for millions more patients every year. The acquisition plan might change when, in September 2014, U.S. Secretary Jacob Lew issued new rules for American companies seeking to change their legal domicile through mergers with foreign companies - so-called tax inversion.Should Medtronic proceed with the acquisition? What would be the challenges of integration for both organizations?
Swot Analysis of "Medtronic: Making the Big Leap Forward (A)" written by William W. George, Monica Baraldi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Medtronic Acquisition facing as an external strategic factors. Some of the topics covered in Medtronic: Making the Big Leap Forward (A) case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Medtronic: Making the Big Leap Forward (A) casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing energy prices,
there is backlash against globalization, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Medtronic: Making the Big Leap Forward (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Medtronic: Making the Big Leap Forward (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Medtronic Acquisition, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Medtronic Acquisition 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 Medtronic: Making the Big Leap Forward (A) can be done for the following purposes –
1. Strategic planning using facts provided in Medtronic: Making the Big Leap Forward (A) case study
2. Improving business portfolio management of Medtronic Acquisition
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Medtronic Acquisition
Strengths Medtronic: Making the Big Leap Forward (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Medtronic Acquisition in Medtronic: Making the Big Leap Forward (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Medtronic Acquisition 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 Medtronic: Making the Big Leap Forward (A) - 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 brand equity
– Medtronic Acquisition has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Medtronic Acquisition to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Medtronic Acquisition has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Medtronic: Making the Big Leap Forward (A) 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.
Diverse revenue streams
– Medtronic Acquisition is present in almost all the verticals within the industry. This has provided firm in Medtronic: Making the Big Leap Forward (A) 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.
Learning organization
- Medtronic Acquisition 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 Medtronic Acquisition is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Medtronic: Making the Big Leap Forward (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Medtronic Acquisition 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 William W. George, Monica Baraldi 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.
Cross disciplinary teams
– Horizontal connected teams at the Medtronic Acquisition 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.
Organizational Resilience of Medtronic Acquisition
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Medtronic Acquisition does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Medtronic Acquisition in the sector have low bargaining power. Medtronic: Making the Big Leap Forward (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Medtronic Acquisition to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Medtronic Acquisition digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Medtronic Acquisition 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.
Strong track record of project management
– Medtronic Acquisition is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Medtronic Acquisition 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 Medtronic Acquisition in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Medtronic: Making the Big Leap Forward (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Medtronic: Making the Big Leap Forward (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, William W. George, Monica Baraldi suggests that, Medtronic Acquisition 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.
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 Medtronic Acquisition supply chain. Even after few cautionary changes mentioned in the HBR case study - Medtronic: Making the Big Leap Forward (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Medtronic Acquisition vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Medtronic: Making the Big Leap Forward (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Medtronic Acquisition 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Medtronic Acquisition 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.
Interest costs
– Compare to the competition, Medtronic Acquisition 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Medtronic: Making the Big Leap Forward (A), in the dynamic environment Medtronic Acquisition has struggled to respond to the nimble upstart competition. Medtronic Acquisition has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Medtronic Acquisition 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 - Medtronic: Making the Big Leap Forward (A) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Medtronic: Making the Big Leap Forward (A) HBR case study mentions - Medtronic Acquisition 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.
Slow decision making process
– As mentioned earlier in the report, Medtronic Acquisition 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. Medtronic Acquisition 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.
Increasing silos among functional specialists
– The organizational structure of Medtronic Acquisition is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Medtronic Acquisition needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Medtronic Acquisition to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Medtronic: Making the Big Leap Forward (A) 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 Medtronic: Making the Big Leap Forward (A) can leverage the sales team experience to cultivate customer relationships as Medtronic Acquisition is planning to shift buying processes online.
Opportunities Medtronic: Making the Big Leap Forward (A) | 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 Medtronic: Making the Big Leap Forward (A) are -
Leveraging digital technologies
– Medtronic Acquisition can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Medtronic Acquisition in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Medtronic Acquisition to increase its market reach. Medtronic Acquisition 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Medtronic Acquisition 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.
Creating value in data economy
– The success of analytics program of Medtronic Acquisition has opened avenues for new revenue streams for the organization in the industry. This can help Medtronic Acquisition to build a more holistic ecosystem as suggested in the Medtronic: Making the Big Leap Forward (A) case study. Medtronic Acquisition can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Medtronic Acquisition 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 Medtronic: Making the Big Leap Forward (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Medtronic Acquisition to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Medtronic Acquisition can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Medtronic Acquisition can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Medtronic Acquisition can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Medtronic Acquisition 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 Medtronic Acquisition to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Medtronic Acquisition has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Medtronic Acquisition can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Medtronic Acquisition 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, Medtronic: Making the Big Leap Forward (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Medtronic Acquisition 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.
Threats Medtronic: Making the Big Leap Forward (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Medtronic: Making the Big Leap Forward (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Medtronic Acquisition with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Medtronic Acquisition in the Strategy & Execution industry. The Strategy & Execution 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.
Environmental challenges
– Medtronic Acquisition 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. Medtronic Acquisition can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Medtronic Acquisition in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Medtronic: Making the Big Leap Forward (A), Medtronic Acquisition may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Medtronic Acquisition 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. Medtronic Acquisition 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.
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 Medtronic Acquisition business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Medtronic Acquisition 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Medtronic Acquisition can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Medtronic Acquisition 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.
Increasing wage structure of Medtronic Acquisition
– 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 Medtronic Acquisition.
Weighted SWOT Analysis of Medtronic: Making the Big Leap Forward (A) 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 Medtronic: Making the Big Leap Forward (A) 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 Medtronic: Making the Big Leap Forward (A) 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 Medtronic: Making the Big Leap Forward (A) 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 Medtronic: Making the Big Leap Forward (A) 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 Medtronic Acquisition needs to make to build a sustainable competitive advantage.
