The Threat of Entry:
Medtronic is one of the world’s leading companies that provides medical technology devices. Its products are technologically advanced and require extensive research and development. The threat of entry for a new company in this industry is high. Medtronic has the advantage of economies of scale because its strategy is acquisitions and mergers. Recently, Medtronic has acquired several smaller firms and released several new products, including an “implantable cardiac monitor, or ICM…The device is roughly one-third the size of a triple A battery -- about 80% smaller than comparable ICMs.” This product launched in February and has achieved 4% growth in the company division in its first quarter. This is one example of the advantage of product differentiation that would be a low threat of entry. Medtronic can use its brand recognition and reputation for high quality products to ensure trust with customers for new products, like this heart monitor.
Medtronic is one of the world’s leading companies that provides medical technology devices. Its products are technologically advanced and require extensive research and development. The threat of entry for a new company in this industry is high. Medtronic has the advantage of economies of scale because its strategy is acquisitions and mergers. Recently, Medtronic has acquired several smaller firms and released several new products, including an “implantable cardiac monitor, or ICM…The device is roughly one-third the size of a triple A battery -- about 80% smaller than comparable ICMs.” This product launched in February and has achieved 4% growth in the company division in its first quarter. This is one example of the advantage of product differentiation that would be a low threat of entry. Medtronic can use its brand recognition and reputation for high quality products to ensure trust with customers for new products, like this heart monitor.
Threat of Rivalry:
Medtronic’s main competitors are Abbott Laboratories, Stryker Corp, St Jude Medical Inc and market share leader, Johnson & Johnson. These companies are acquiring companies worldwide, making the market smaller. Industry growth is strong and product differentiation is high. Based on the attributes of the threat of rivalry, the threat of rivalry for Medtronic is moderate.
Medtronic’s main competitors are Abbott Laboratories, Stryker Corp, St Jude Medical Inc and market share leader, Johnson & Johnson. These companies are acquiring companies worldwide, making the market smaller. Industry growth is strong and product differentiation is high. Based on the attributes of the threat of rivalry, the threat of rivalry for Medtronic is moderate.
The Threat of Substitutes:
The threat of substitutes is moderate for Medtronic. The company’s devices are expensive and not ubiquitous throughout the health care industry. While hospitals all over the world use Medtronic’s technology, some are forced to make the best diagnosis with what they have. These doctors use older methods to treat patients for a less accurate and less expensive visit.
Threat of Suppliers:
The medical technology business is dominated by a few firms that sell highly differentiated products. Suppliers are not very threated by substitutes. Based on this assessment, the threat of suppliers is moderate to high.
Threat of Buyers:
In the industry of medical technology, the threat of buyers is low. With the aging Boomer population and a culture that does not value proactive, healthy living, the need for medical devices for a variety of ailments grows every day. Products and services provided by Medtronic affect and improve the quality of life for people. For anyone who can afford such care, this expense would be priceless to the patient. The number of buyers is high and the products are differentiated. Buyers are earning significant products by way of life and mobility improvement.
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