Case Study Description of Medtronic: Navigating a Shifting Healthcare Landscape
Medtronic is adapting its strategy to changes in health care competition and payments. It has decided to develop new relationships with payers, hospitals, and physicians to become more accountable for patient outcomes and total costs. The case describes new forms of partnerships for therapy optimization, management of acute care episodes, and management of chronic care patients.
Authors :: Robert S. Kaplan, Michael E. Porter, Thomas W Feeley, Alee Hernandez
Swot Analysis of "Medtronic: Navigating a Shifting Healthcare Landscape" written by Robert S. Kaplan, Michael E. Porter, Thomas W Feeley, Alee Hernandez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Medtronic Care facing as an external strategic factors. Some of the topics covered in Medtronic: Navigating a Shifting Healthcare Landscape case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Medtronic: Navigating a Shifting Healthcare Landscape casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of Medtronic: Navigating a Shifting Healthcare Landscape
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Medtronic: Navigating a Shifting Healthcare Landscape case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Medtronic Care, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Medtronic Care 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: Navigating a Shifting Healthcare Landscape can be done for the following purposes –
1. Strategic planning using facts provided in Medtronic: Navigating a Shifting Healthcare Landscape case study
2. Improving business portfolio management of Medtronic Care
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 Care
Strengths Medtronic: Navigating a Shifting Healthcare Landscape | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Medtronic Care in Medtronic: Navigating a Shifting Healthcare Landscape Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Medtronic Care in the sector have low bargaining power. Medtronic: Navigating a Shifting Healthcare Landscape has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Medtronic Care to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Medtronic: Navigating a Shifting Healthcare Landscape firm has clearly differentiated products in the market place. This has enabled Medtronic Care to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Medtronic Care to invest into research and development (R&D) and innovation.
Analytics focus
– Medtronic Care 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 Robert S. Kaplan, Michael E. Porter, Thomas W Feeley, Alee Hernandez 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 Strategy & Execution field
– Medtronic Care is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Medtronic Care in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Medtronic Care
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Medtronic Care does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Medtronic Care has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Medtronic: Navigating a Shifting Healthcare Landscape 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.
Strong track record of project management
– Medtronic Care is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Medtronic Care is one of the leading recruiters in the industry. Managers in the Medtronic: Navigating a Shifting Healthcare Landscape are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Medtronic: Navigating a Shifting Healthcare Landscape 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
– Medtronic Care is one of the most innovative firm in sector. Manager in Medtronic: Navigating a Shifting Healthcare Landscape Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Medtronic Care has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Medtronic: Navigating a Shifting Healthcare Landscape - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Medtronic Care has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Medtronic Care to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Medtronic: Navigating a Shifting Healthcare Landscape | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Medtronic: Navigating a Shifting Healthcare Landscape are -
Low market penetration in new markets
– Outside its home market of Medtronic Care, firm in the HBR case study Medtronic: Navigating a Shifting Healthcare Landscape needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Medtronic Care 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 cash cycle compare to competitors
Medtronic Care 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Medtronic: Navigating a Shifting Healthcare Landscape 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 Care 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Medtronic: Navigating a Shifting Healthcare Landscape 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 Medtronic Care has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert S. Kaplan, Michael E. Porter, Thomas W Feeley, Alee Hernandez suggests that, Medtronic Care 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.
No frontier risks strategy
– After analyzing the HBR case study Medtronic: Navigating a Shifting Healthcare Landscape, 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.
Increasing silos among functional specialists
– The organizational structure of Medtronic Care is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Medtronic Care needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Medtronic Care to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Medtronic Care 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.
Products dominated business model
– Even though Medtronic Care has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Medtronic: Navigating a Shifting Healthcare Landscape should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Medtronic Care has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Medtronic Care 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.
Opportunities Medtronic: Navigating a Shifting Healthcare Landscape | 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: Navigating a Shifting Healthcare Landscape are -
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 Care can use these opportunities to build new business models that can help the communities that Medtronic Care operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Medtronic Care 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: Navigating a Shifting Healthcare Landscape - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Medtronic Care to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Medtronic Care has opened avenues for new revenue streams for the organization in the industry. This can help Medtronic Care to build a more holistic ecosystem as suggested in the Medtronic: Navigating a Shifting Healthcare Landscape case study. Medtronic Care can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Medtronic Care can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Medtronic Care can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Medtronic: Navigating a Shifting Healthcare Landscape, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Medtronic Care can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Medtronic Care can develop new processes and procedures in Strategy & Execution 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, Medtronic Care 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Medtronic Care in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Medtronic Care 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.
Leveraging digital technologies
– Medtronic Care 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.
Buying journey improvements
– Medtronic Care can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Medtronic: Navigating a Shifting Healthcare Landscape 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.
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 Medtronic Care 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.
Threats Medtronic: Navigating a Shifting Healthcare Landscape External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Medtronic: Navigating a Shifting Healthcare Landscape are -
Technology acceleration in Forth Industrial Revolution
– Medtronic Care has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Medtronic Care 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Medtronic Care with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Medtronic Care is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Medtronic Care 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: Navigating a Shifting Healthcare Landscape .
Increasing wage structure of Medtronic Care
– 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 Care.
High dependence on third party suppliers
– Medtronic Care 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.
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: Navigating a Shifting Healthcare Landscape, Medtronic Care 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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Medtronic Care business can come under increasing regulations regarding data privacy, data security, 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 Care needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Medtronic Care 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Medtronic Care in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Medtronic Care 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.
Weighted SWOT Analysis of Medtronic: Navigating a Shifting Healthcare Landscape 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: Navigating a Shifting Healthcare Landscape 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: Navigating a Shifting Healthcare Landscape 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: Navigating a Shifting Healthcare Landscape 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: Navigating a Shifting Healthcare Landscape 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 Care needs to make to build a sustainable competitive advantage.
