HA616_Working Exercise2docx

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Feb 20, 2024

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Running head: SERVICE AREA STRUCTURAL ANALYSIS 1 Service Area Structural Analysis Module 2: Working Exercise Bianca Huntsman HA616: Healthcare Strategic Management and Marketing Dr. Lee Bewley January 27, 2019
SERVICE AREA STRUCTURAL ANALYSIS 2 Medtronic Overview (Ginter, Duncan, & Swayne, 2013) Porter's Five Forces is a simple but powerful tool for understanding the competitiveness of your business environment, and for identifying your strategy's potential profitability (Mindtools, 2018). Medtronic would benefit greatly from these five forces as it would assist them in understanding the environment that will affect their profitability and use these tools to their advantage. Ginter et al. (2013) describe The Porter Five (5) Forces as - Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Threat from Substitute Products
SERVICE AREA STRUCTURAL ANALYSIS 3 Rivalry among the existing players. Potential Entrants Medtronic has to continue to develop state of the art tools to continually compete with competitors out there. The threat of entry for new competitors is high in this industry. Global medical device maker Medtronic has agreed to buy healthcare and medical supplies major Covidien in a cash-and-stock deal valued at close to $43 billion; the buyout is expected to help Medtronic reduce its global tax burden, as it plans to relocate its headquarters from the U.S. to Ireland, where corporate tax rates are considerably lower. It would also give the company lower- cost access to its $14 billion in cash (Team, 2014). The advantage Medtronic has is the brand recognition within the healthcare industry. By creating products that can be cost efficient would help them be best out there. Consumers want affordable and reliable tools and will continue to go for the best that can be provided. Medtronic will have to invest in some research to find new ways to make their product the best. Power of Suppliers Powerful suppliers in Healthcare sector use their negotiating power to extract higher prices from the firms in Medical Appliances & Equipment field (Owler, 2019). Bargaining with suppliers is key to developing a product that is beneficial and affordable to the consumer while Medtronic continues to gain profits. Medtronic relies on raw material to develop their products; therefore, Medtronic has the advantage with dealing with a multitude of suppliers. One of the lessons Medtronic plc can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where
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