Boston Scientific (BSX) SWOT Analysis / TOWS Matrix / MBA Resources
Medical Equipment & Supplies
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Boston Scientific (United States)
Based on various researches at Oak Spring University , Boston Scientific is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, supply chains are disrupted by pandemic , geopolitical disruptions,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Boston Scientific
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Boston Scientific can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boston Scientific, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boston Scientific 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 Boston Scientific can be done for the following purposes –
1. Strategic planning of Boston Scientific
2. Improving business portfolio management of Boston Scientific
3. Assessing feasibility of the new initiative in United States
4. Making a Medical Equipment & Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Boston Scientific
Strengths of Boston Scientific | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boston Scientific are -
Successful track record of launching new products
– Boston Scientific has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Boston Scientific 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.
Ability to lead change in Medical Equipment & Supplies
– Boston Scientific is one of the leading players in the Medical Equipment & Supplies industry in United States. Over the years it has not only transformed the business landscape in the Medical Equipment & Supplies industry in United States but also across the existing markets. The ability to lead change has enabled Boston Scientific in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Boston Scientific has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Boston Scientific staying ahead in the Medical Equipment & Supplies industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Medical Equipment & Supplies industry
– Boston Scientific has clearly differentiated products in the market place. This has enabled Boston Scientific to fetch slight price premium compare to the competitors in the Medical Equipment & Supplies industry. The sustainable margins have also helped Boston Scientific to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Boston Scientific in Medical Equipment & Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Boston Scientific 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 Medical Equipment & Supplies industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy of Boston Scientific comprises – understanding the underlying the factors in the Medical Equipment & Supplies 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.
High brand equity
– Boston Scientific has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Boston Scientific to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Boston Scientific 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.
Highly skilled collaborators
– Boston Scientific has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Medical Equipment & Supplies industry. Secondly the value chain collaborators of Boston Scientific have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Boston Scientific 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 Boston Scientific is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Boston Scientific emphasize – knowledge, initiative, and innovation.
Digital Transformation in Medical Equipment & Supplies industry
- digital transformation varies from industry to industry. For Boston Scientific digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boston Scientific has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses of Boston Scientific | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Boston Scientific are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Boston Scientific is slow explore the new channels of communication. These new channels of communication can help Boston Scientific to provide better information regarding Medical Equipment & Supplies products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Boston Scientific, it seems that company is thinking out the frontier risks that can impact Medical Equipment & Supplies industry. 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.
Ability to respond to the competition
– As the decision making is very deliberative at Boston Scientific, in the dynamic environment of Medical Equipment & Supplies industry it has struggled to respond to the nimble upstart competition. Boston Scientific has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Boston Scientific 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.
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 Boston Scientific supply chain. Even after few cautionary changes, Boston Scientific is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Boston Scientific vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Boston Scientific is dominated by functional specialists. It is not different from other players in the Medical Equipment & Supplies industry, but Boston Scientific needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Boston Scientific to focus more on services in the Medical Equipment & Supplies industry rather than just following the product oriented approach.
High dependence on Boston Scientific ‘s star products
– The top 2 products and services of Boston Scientific still accounts for major business revenue. This dependence on star products in Medical Equipment & Supplies industry has resulted into insufficient focus on developing new products, even though Boston Scientific has relatively successful track record of launching new products.
Skills based hiring in Medical Equipment & Supplies industry
– The stress on hiring functional specialists at Boston Scientific 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 bargaining power of channel partners in Medical Equipment & Supplies industry
– because of the regulatory requirements in United States, Boston Scientific 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 Medical Equipment & Supplies industry.
High operating costs
– Compare to the competitors, Boston Scientific has high operating costs in the Medical Equipment & Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Boston Scientific lucrative customers.
Compensation and incentives
– The revenue per employee of Boston Scientific is just above the Medical Equipment & Supplies industry average. It 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.
Boston Scientific Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Boston Scientific are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Medical Equipment & Supplies industry, but it has also influenced the consumer preferences. Boston Scientific can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Boston Scientific has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Medical Equipment & Supplies sector. This continuous investment in analytics has enabled Boston Scientific to build a competitive advantage using analytics. The analytics driven competitive advantage can help Boston Scientific to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Boston Scientific 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.
Building a culture of innovation
– managers at Boston Scientific 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 Medical Equipment & Supplies industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Medical Equipment & Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Boston Scientific 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. Boston Scientific 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.
Manufacturing automation
– Boston Scientific can use the latest technology developments to improve its manufacturing and designing process in Medical Equipment & Supplies sector. 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.
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. Boston Scientific can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Boston Scientific 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Boston Scientific can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Boston Scientific can develop new processes and procedures in Medical Equipment & Supplies 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.
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 Boston Scientific 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.
Creating value in data economy
– The success of analytics program of Boston Scientific has opened avenues for new revenue streams for the organization in Medical Equipment & Supplies industry. This can help Boston Scientific to build a more holistic ecosystem for Boston Scientific products in the Medical Equipment & Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Boston Scientific 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.
Threats Boston Scientific External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Boston Scientific are -
Regulatory challenges
– Boston Scientific 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 Medical Equipment & Supplies industry regulations.
Environmental challenges
– Boston Scientific 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. Boston Scientific can take advantage of this fund but it will also bring new competitors in the Medical Equipment & Supplies industry.
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 Boston Scientific in the Medical Equipment & Supplies sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Boston Scientific 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.
Increasing wage structure of Boston Scientific
– 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 Boston Scientific.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Boston Scientific may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Medical Equipment & Supplies sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Boston Scientific in Medical Equipment & Supplies industry. The Medical Equipment & Supplies 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
– Boston Scientific 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 Medical Equipment & Supplies industry.
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. Boston Scientific 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Medical Equipment & Supplies industry are lowering. It can presents Boston Scientific with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Medical Equipment & Supplies sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Boston Scientific 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 Boston Scientific prominent markets.
Weighted SWOT Analysis of Boston Scientific Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Boston Scientific 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 Boston Scientific 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 Boston Scientific 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 Boston Scientific 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 Boston Scientific needs to make to build a sustainable competitive advantage.