GE Medical Systems Case Study

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Case Study based on the GEMS Harvard Case Study

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GE Medical Systems Case Study

  1. 1. GE Medical Systems The Future of Medical Imaging Group 1
  2. 2. Agenda • Industry & Company Overview • Problem Analysis • Decision Criteria • Alternatives • Recommendations • GE’s actual response
  3. 3. Medical Imaging Industry New Entrants • Pharmaceutical companies? Biomedical firms? Suppliers Competitors Intermediaries Consumers • Price- • Siemens,Philips • Direct Sales • Hospitals determined, • Oligopoly removes • Out-patient long term intermediaries clinics partners • Each produces one Substitutes part • Secondary market
  4. 4. Medical Industry Trends 1. Developed vs. Developing Market 2. Bio-Medicine Vs. Machinery 3. Demographic changes in developed countries Background Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  5. 5. 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 Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  6. 6. Strengths Weaknesses Opportunities Threats
  7. 7. Strengths Weaknesses • Strong Global Ties: GPC • Unilateral focus on Program machinery & “best • Six Sigma Quality engineering” • Strong Acquisition History • Internally focused strategy Opportunities Threats • Bio-Medicine: “Global • Bio-Medicine vs. machinery Opportunity” profit & product cycle • Aging Baby Boomers • Reforms in France, U.S., • Emerging middle class and China have reduced • Health Care IT amount spent on hospital • Country-specific trends capital
  8. 8. 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 Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  9. 9. Strategy Assessment within the Growth Curve GEMS current Level of position Growth Age of Company Background Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  10. 10. Alternatives Target Target Developed Developing Focus on nations & nations & machinery, but Change Maintain create R&D for Technology Technology Bio-tech Background Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  11. 11. Decision Criteria 1. 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 Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  12. 12. Evaluating Alternatives Alternatives Decision Criteria Market share relationship profitability risk Developed & 3 3 2 1 maintained technology Developing 4 3 4 4 nations & change technology Focus on 5 4 4 3 Developing nations, but develop LT bio- tech Background Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  13. 13. Evaluating Alternatives Alternatives Decision Criteria Market share relationship profitability risk Developed & 3 3 2 1 maintained technology Developing 4 3 4 4 nations & change technology Focus on 5 4 4 3 Developing nations, but develop LT bio- tech Background Overview Background Problem Analysis DC & Alternatives Background Recommendations Background Conclusion
  14. 14. Recommendations Short-Term Focus Long-Term Focus • Improve • Create new secondary market • Manage department supply relationships • Monitor trend • Standardize with • Work with restoration process developing regulators • Minimize nations • Educate market on manufacturing personalized inefficiencies medicine Background Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Conclusion
  15. 15. 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 Overview Background Problem Analysis Background DC & Alternatives Background Recommendations Background Conclusion
  16. 16. 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?

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