Dr. Laura Dresding was the founder of Dresding Medical (DM). The company has enjoyed success in designing, manufacturing and supplying medical equipment to hospital and clinics. Through their core competency of translating different customer needs into customized products, DM has retained a satisfied customer base. These clients have traditionally valued dependability and flexibility over speed and price. However, part of the customer base has gradually shifted away from clinics and towards direct consumers. In order to address this market, DM has developed a new generation of “small black box” products, which are smarter and more portable than their standard offerings. However, the direct consumer’s desire standardized low-cost items that can be delivered more quickly than DM’s current intervals. Unfortunately, this shift to the consumer market does not correspond with the strengths of DM’s manufacturing operations. Direct consumers desire low-cost products, whereas DM has traditionally offered products that are high-cost. Expensive emerging medical technologies only compound the cost issue. DM is also very deliberate in developing their products to the market. For example, it takes DM over three years to develop a new base model. In order to adapt to evolving consumer demands, they’ll need to reduce those intervals to under 12 months. Another variation between the markets involves the “push vs. pull” concept. Although the clinical market tends to “pull” the customized products from DM, the mass quantities of standardized items will need to be “pushed” to some extent towards the consumer market.
1.1 Aims and Objectives of this Case Study
The main aims and objectives of the study is to provide a better understanding of the current and new markets of Dresding Medical, the relative importance of the performance objectives for the current and new markets, suggesting the strategic options available to the management and finally evaluating how the strategic decision areas of the two different products are likely to be different and represent a operations strategy matrix for the current product.
1.2 Information Gathering
The data has been predominantly developed through secondary data.
2. The Current and New market of Dresding Medical
Dresding Medical gained success in the current market through their amazing research and development culture. Although around 50 percent of their total manufacturing is done in-house, but core competence is an ability to understand the needs of clinicians and translate those into their products. Dresding Medical was among the first to expand the range and functionality of this type of equipment and integrate it with sophisticated diagnostics software. Admittedly products of Dresding Medical tend to be relatively highly priced and are coming under some cost pressures, but because of its technical excellence and willingness to modify equipment to individual customer needs. Manufacturing normally took around three months from receiving the specification to completing assembly. This was not usually a problem for most customers; they were more interested in equipment being delivered on time rather than immediate availability. The manufacturing department was largely concerned with assembling, integrating and testing the equipment. Most components were made by suppliers who had been doing business with DM for some years and were capable of accommodating their strict quality requirements and their need to customize components. Manufacturing is really a large laboratory. It is important to maintain that laboratory-like culture because it helps Dresding medical to maintain its superiority in leading-edge product technology and their ability to customize products. It also means that DM can call upon its technicians to pull out all the stops in order to maintain delivery promises.
Dresding Medical had developed a new generation of ‘small black box’ products these were...