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 - – increasing commodity prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, 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,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, 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 -
Operational resilience
– The operational resilience strategy in the Medtronic: Making the Big Leap Forward (A) 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.
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.
Successful track record of launching new products
– Medtronic Acquisition has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Medtronic Acquisition 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.
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.
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.
Ability to recruit top talent
– Medtronic Acquisition is one of the leading recruiters in the industry. Managers in the Medtronic: Making the Big Leap Forward (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
High switching costs
– The high switching costs that Medtronic Acquisition 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.
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.
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.
Highly skilled collaborators
– Medtronic Acquisition 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 Medtronic: Making the Big Leap Forward (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Medtronic Acquisition in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Medtronic: Making the Big Leap Forward (A), is just above the industry average. Medtronic Acquisition 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, Medtronic Acquisition 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.
Skills based hiring
– The stress on hiring functional specialists at Medtronic Acquisition 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.
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.
Lack of clear differentiation of Medtronic Acquisition products
– To increase the profitability and margins on the products, Medtronic Acquisition needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Medtronic: Making the Big Leap Forward (A), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
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.
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.
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 -
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.
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.
Buying journey improvements
– Medtronic Acquisition can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Medtronic: Making the Big Leap Forward (A) 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.
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.
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 Medtronic Acquisition in the consumer business. Now Medtronic Acquisition can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Medtronic Acquisition can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Medtronic Acquisition is facing challenges because of the dominance of functional experts in the organization. Medtronic: Making the Big Leap Forward (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Medtronic Acquisition can use these opportunities to build new business models that can help the communities that Medtronic Acquisition operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
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 -
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 .
Shortening product life cycle
– it is one of the major threat that Medtronic Acquisition is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Medtronic Acquisition needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Medtronic Acquisition 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 Medtronic: Making the Big Leap Forward (A) .
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.
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 Medtronic Acquisition.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Medtronic Acquisition has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Medtronic Acquisition needs to keep up with the evolution of technology in the Strategy & Execution 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.
Regulatory challenges
– Medtronic Acquisition 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 Strategy & Execution industry regulations.
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.