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Case Study

[pic]

Virginia Fernández

Elena Gómez

Virginia Rodríguez

Agustín Sacristán

Medtronic

What is Medtronic?

Medtronic is the world’s largest medical technology and therapeutic device company. It specializes in implantable and invasive therapies for improved cardiovascular and neurological health.

Was founded in 1949 by Earl Bakken. His duties were to repair centrifuges, electrocardiogram machines and other electronic equipment. Later on with his knowledge, created a medical equipment repair service, which he called Medtronic.

Medtronic was soon manufacturing several medical research products such as defibrillators, forceps, animal respirators, cardiac rate monitors and physiological stimulators. Due to his good making he earned an excellent reputation as a leader in biomedical engineering devices.

They increased their product line and because of the demand they expanded to other countries in the 60s. Research and introduction of several new products continued throughout the 60s. By 1970 the company have divided into four geographical regions:

1. Europe- Africa- Middle East

2. Canada

3. Latin-American

4. Asia-Pacific

Direct sales offices where established in 19 countries. By the early 90s Medtronic had developed 6 primary areas of expertise: Bradycardia-paging, tachyarrhythmia management, cardiopulmonary, heart valves, interventional vascular and neurological.

In 1992 international sales contributed 40% of total revenues this was responsible for the development of new facilities and expanded operations in Japan, China and Eastern Europe. So the business is in more than 120 countries. With operations organized into 3 global areas:

1. Americas

2. Europe- Middle East- Africa

3. Asia- Pacific

However Medtronic operates in a single industry segment.

The primary markets for Medtronic are hospitals, other medical institutions, physicians in the U.S. and other countries around the world. Medtronic sells more of its products and services directly through its staff of trained, full-time sells representative.

Taking into account different parameters the situation of the company is the following:

Environment

The company has a turbulent environment. The complexity is very high because the company is affected by many interdependent factors. For example relatively patent portfolios, government regulations, product liabilities litigation, technological change etc. The most complex sectors for Medtronic are the governmental, technological and internationals sector. The degree of unpredictability is very high too due to the high levels of:

1. Uncertainty. For example, in the market sector, the rate and timing of new products introduction. In the government sector the timing and impact of proposed changes of FDA. And in the technological sector the impact of technological advanced on products.

2. Equivocality. Confusion about the existence of some factors. Ex. Medtronic was against the proposal about universal access to health care.

3. Hostility. There is discrimination, patent infringement low switch.

In this kind of environment the factors are not predictable, so large and fast information processing capacity is need and also short-term adjustment and coordinated responses.

Goals

The company’s goals are focused mainly on effectiveness but nowadays the company wants to reduce costs

In the past, Medtronic used to focus mainly in effectiveness. This means that Medtronic was focused on its goals and take less care about the efficient use of resources. The company was not focus in cost.

Today, the company is trying to reduce its cost, so it is taking care about the efficient use of resources. In other words, Medtronic has been increasing the exposure to efficiency and effectiveness....
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