Case Study Description of We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business
Illustrates how a new management team at Medtronic's Cardiac Pacemaker business reversed a steep decline in market share by adopting certain management principles for new product development: clarifying strategy, aggregating project planning, accommodating the number of projects to match development capacity, and establishing a platform/derivative product architecture, and others. This case is useful in both MBA courses and executive programs.
Swot Analysis of "We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business" written by Clayton M. Christensen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pacemaker Cardiac facing as an external strategic factors. Some of the topics covered in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business case study are - Strategic Management Strategies, Marketing, Product development, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business casestudy better are - – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing energy prices, geopolitical disruptions, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pacemaker Cardiac, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pacemaker Cardiac 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business can be done for the following purposes –
1. Strategic planning using facts provided in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business case study
2. Improving business portfolio management of Pacemaker Cardiac
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pacemaker Cardiac
Strengths We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pacemaker Cardiac in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business Harvard Business Review case study are -
Learning organization
- Pacemaker Cardiac 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 Pacemaker Cardiac is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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.
Innovation driven organization
– Pacemaker Cardiac is one of the most innovative firm in sector. Manager in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Pacemaker Cardiac is one of the leading recruiters in the industry. Managers in the We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Pacemaker Cardiac 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Technology & Operations field
– Pacemaker Cardiac 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 Pacemaker Cardiac in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Pacemaker Cardiac 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 Clayton M. Christensen 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.
High brand equity
– Pacemaker Cardiac has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pacemaker Cardiac to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Pacemaker Cardiac in the sector have low bargaining power. We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pacemaker Cardiac to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Pacemaker Cardiac 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business firm has clearly differentiated products in the market place. This has enabled Pacemaker Cardiac to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Pacemaker Cardiac to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Pacemaker Cardiac in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, is just above the industry average. Pacemaker Cardiac 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.
No frontier risks strategy
– After analyzing the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pacemaker Cardiac is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Pacemaker Cardiac 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.
Interest costs
– Compare to the competition, Pacemaker Cardiac 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Clayton M. Christensen suggests that, Pacemaker Cardiac 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 operating costs
– Compare to the competitors, firm in the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 Pacemaker Cardiac 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, it seems that the employees of Pacemaker Cardiac 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.
Low market penetration in new markets
– Outside its home market of Pacemaker Cardiac, firm in the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 Pacemaker Cardiac has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Pacemaker Cardiac 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.
Opportunities We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business | 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business are -
Buying journey improvements
– Pacemaker Cardiac can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pacemaker Cardiac 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. Pacemaker Cardiac 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 Pacemaker Cardiac 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 Pacemaker Cardiac to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pacemaker Cardiac 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.
Developing new processes and practices
– Pacemaker Cardiac can develop new processes and procedures in Technology & Operations 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.
Manufacturing automation
– Pacemaker Cardiac can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Using analytics as competitive advantage
– Pacemaker Cardiac 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pacemaker Cardiac 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 Technology & Operations industry, but it has also influenced the consumer preferences. Pacemaker Cardiac 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 Pacemaker Cardiac in the consumer business. Now Pacemaker Cardiac can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Pacemaker Cardiac has opened avenues for new revenue streams for the organization in the industry. This can help Pacemaker Cardiac to build a more holistic ecosystem as suggested in the We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business case study. Pacemaker Cardiac can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Pacemaker Cardiac to increase its market reach. Pacemaker Cardiac 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pacemaker Cardiac can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pacemaker Cardiac in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Threats We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business are -
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. Pacemaker Cardiac 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pacemaker Cardiac can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Pacemaker Cardiac needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Pacemaker Cardiac 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 Technology & Operations industry regulations.
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 Pacemaker Cardiac in the Technology & Operations sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pacemaker Cardiac in the Technology & Operations industry. The Technology & Operations 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.
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.
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 Pacemaker Cardiac business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Pacemaker Cardiac 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.
Technology acceleration in Forth Industrial Revolution
– Pacemaker Cardiac has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Pacemaker Cardiac needs to keep up with the evolution of technology in the Technology & Operations 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.
Environmental challenges
– Pacemaker Cardiac 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. Pacemaker Cardiac can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, Pacemaker Cardiac may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Consumer confidence and its impact on Pacemaker Cardiac 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.
Weighted SWOT Analysis of We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 Pacemaker Cardiac needs to make to build a sustainable competitive advantage.