ge medical systems case study
DESCRIPTION
Case Study based on the GEMS Harvard Case StudyTRANSCRIPT
GE Medical SystemsThe Future of Medical Imaging
Group 1
Agenda
• Industry & Company Overview
• Problem Analysis
• Decision Criteria
• Alternatives
• Recommendations
• GE’s actual response
Medical Imaging Industry
Suppliers Consumers
New Entrants
Substitutes
Competitors Intermediaries• Hospitals•Out-patient
clinics
• Siemens,Philips• Oligopoly
• Price-determined, long term partners
• Each produces one
part
• Pharmaceutical companies?
Biomedical firms?
• Direct Sales removes
intermediaries
•Secondary market
Medical Industry Trends
1. Developed vs. Developing Market
2. Bio-Medicine Vs. Machinery
3. Demographic changes in developed countries
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Company Overview
• First major product was the x-ray
• Global Product Company program
• One of the largest firms in the world by market capitalization
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Strengths Weaknesses
Opportunities Threats
Strengths• Strong Global Ties: GPC
Program• Six Sigma Quality• Strong Acquisition History
Weaknesses• Unilateral focus on
machinery & “best engineering”
• Internally focused strategy
Opportunities• Bio-Medicine: “Global
Opportunity”• Aging Baby Boomers• Emerging middle class• Health Care IT• Country-specific trends
Threats• Bio-Medicine vs. machinery
profit & product cycle• Reforms in France, U.S.,
and China have reduced amount spent on hospital
capital
Problem Statement
GEMS is a world-leading medical equipment subsidiary of GE that has experienced many years of success. However, due to changing market conditions, GEMS must change its global positioning strategy if it wishes to
remain competitive.
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Strategy Assessment within the Growth Curve
Age of Company
Level of Growth
GEMS current position
Background Background BackgroundDC & Alternatives Recommendations ConclusionBackground BackgroundOverview Problem Analysis
Alternatives
Target Developed nations & Change
Technology
Target Developing nations & Maintain
Technology
Focus on machinery, but create R&D for
Bio-tech
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Decision Criteria1. Increase market share by 15% over the next
15 years
2. Develop relationships with business partners around the world to better connect GEMS with each country it operates in
3. Ensure short-term profitability is maintained
4. Minimize overall financial risk taken by GEMS
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Evaluating AlternativesAlternatives Decision Criteria
Market share relationship profitability risk
Developed & maintained technology
3 3 2 1
Developing nations & change technology
4 3 4 4
Focus on Developing nations, but develop LT bio-tech
5 4 4 3
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Evaluating AlternativesAlternatives Decision Criteria
Market share relationship profitability risk
Developed & maintained technology
3 3 2 1
Developing nations & change technology
4 3 4 4
Focus on Developing nations, but develop LT bio-tech
5 4 4 3
Background Background Background BackgroundOverview Problem Analysis Recommendations ConclusionDC & Alternatives
Recommendations
Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Short-Term Focus Long-Term Focus• Improve secondary market
supply• Standardize restoration process• Minimize
manufacturing inefficiencies
• Create new department
• Monitor trend• Work with
regulators• Educate market on
personalized medicine
• Manage relationships
with developing
nations
What is GEMS doing now?
• Name changed to GE Healthcare
• Horizontal Integration: Acquisitions remain important
• Lesser focus on secondary market
• Financial Crisis: drive down cost
Background Background Background Background BackgroundOverview Problem Analysis DC & Alternatives Recommendations Conclusion
Questions• What alternative would you have
chosen? Why? Do you see another alternative GEMS should consider?
• What do you think is the most important trend in the health care sector?
• Is this industry better suited to a global strategy or a localized strategy?