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 - – talent flight as more people leaving formal jobs, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, geopolitical disruptions, wage bills are increasing,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, 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.
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.
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.
Diverse revenue streams
– Pacemaker Cardiac is present in almost all the verticals within the industry. This has provided firm in We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business 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.
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 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.
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.
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.
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.
Strong track record of project management
– Pacemaker Cardiac is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Successful track record of launching new products
– Pacemaker Cardiac has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pacemaker Cardiac 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.
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.
Slow decision making process
– As mentioned earlier in the report, Pacemaker Cardiac 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. Pacemaker Cardiac 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.
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.
Need for greater diversity
– Pacemaker Cardiac has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pacemaker Cardiac 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, We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Building a culture of innovation
– managers at Pacemaker Cardiac can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
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.
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.
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.
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 -
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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.