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 - – geopolitical disruptions, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, 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 -
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.
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.
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.
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.
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.
Training and development
– Pacemaker Cardiac has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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.
High switching costs
– The high switching costs that Pacemaker Cardiac 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.
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.
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.
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.
Organizational Resilience of Pacemaker Cardiac
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pacemaker Cardiac 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 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.
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 -
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.
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.
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.
Products dominated business model
– Even though Pacemaker Cardiac 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 - We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business HBR case study mentions - Pacemaker Cardiac 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.
Aligning sales with marketing
– It come across in the case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business can leverage the sales team experience to cultivate customer relationships as Pacemaker Cardiac is planning to shift buying processes online.
Lack of clear differentiation of Pacemaker Cardiac products
– To increase the profitability and margins on the products, Pacemaker Cardiac needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Pacemaker Cardiac is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Pacemaker Cardiac needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pacemaker Cardiac to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, in the dynamic environment Pacemaker Cardiac has struggled to respond to the nimble upstart competition. Pacemaker Cardiac has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Pacemaker Cardiac supply chain. Even after few cautionary changes mentioned in the HBR case study - We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pacemaker Cardiac vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Pacemaker Cardiac has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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.
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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Pacemaker Cardiac to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Pacemaker Cardiac 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pacemaker Cardiac can use these opportunities to build new business models that can help the communities that Pacemaker Cardiac operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Loyalty marketing
– Pacemaker Cardiac 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.
Leveraging digital technologies
– Pacemaker Cardiac 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.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pacemaker Cardiac 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 We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business .
Shortening product life cycle
– it is one of the major threat that Pacemaker Cardiac is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 .
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.
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.
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.
High dependence on third party suppliers
– Pacemaker Cardiac 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. Pacemaker Cardiac needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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.
Increasing wage structure of Pacemaker Cardiac
– 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 Pacemaker Cardiac.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pacemaker Cardiac with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.