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We've Got Rhythm! Medtronic Corp.'s Cardiac Pacemaker Business Case Solution

Solution Id Length Case Author Case Publisher
998 1166 Words (4 Pages) Clayton M. Christensen Harvard Business School : 698004
This solution includes: A Word File A Word File

Medtronic was the first company to land in the field of pacemakers, which is a device that enables the heart of a cardiac patient to stabilize. Being the only company, it enjoyed a monopoly position in its early years. However, the force of technological advancements hit Medtronic hard, and it slowed down as new competitors entered the field. The problem that was discovered was not bad management but lack of connectivity in managerial decision making which prolonged the time taken in manufacturing and marketing the product. Certain measures were introduced in order to enhance effective decision making, and speed of manufacturing and more focus was given on the quality of the products. This enabled Medtronic to take the lead in the market again.

Following questions are answered in this case study solution:

  1. What are the causes, both external and internal, that led to the deterioration in Medtronic’s position in pacemakers in the 1970s and 1980s? 

  2. Identify the improvements in the new product development process that the Medtronic management team implemented and the linkages amongst them. 

  3. Describe how Medtronic “made” decisions early in its life, and how it “makes” decisions at the end of the case. It is important to be specific in the process, flow and structures that influence how decisions are made. 

We ve Got Rhythm Medtronic Corp s Cardiac Pacemaker Business Case Analysis

1. What are the causes, both external and internal, that led to the deterioration in Medtronic’s position in pacemakers in the 1970s and 1980s? 

While in its early years, Medtronic enjoyed a monopoly position because it was the first entrant in the arena of pacemaker field. It had a product to offer to the market when no other company was capable of offering or manufacturing it. The product that was being manufactured by Medtronic was a pacemaker which could improve the heart condition of a heart patient by steadying the rhythm of the heart. Being the only company in the pacemaker market, Medtronic hardly had any competition; therefore, in the early 1960’s, it enjoyed the majority share of the market.

However, technological development and innovations exceeded the pace of Medtronic’s technological improvement over the years and gradually, the initial fame that Medtronic enjoyed alone, started to fade away. This was basically one of the external causes that led to the slowdown of a company that once enjoyed a splendid position in the market. Medtronic failed to catch up with the fast developments that the world was undergoing; thus, became a little outdated. Moreover, another cause was the increasing demand of pacemakers, which was a very important invention could not be successfully met by Medtronic and as more and more competitors entered the previously empty pacemaker market, Medtronic’s position was moved to one side.

Moreover, there were certain internal causes which deteriorated Medtronic’s splendid performance, as well. These internal causes were linked with the external causes and took place after the external problems had started creating obstacles for Medtronic. Firstly, the company found it difficult to market new ideas and most of the new investments did not produce fruitful results. It can be stated here that the company lost integrity and was drastically affected by technological development taking place in the world because Medtronic’s employees started seeking new and better positions and left whenever the opportunity arrived for them.

2. Identify the improvements in the new product development process that the Medtronic management team implemented and the linkages amongst them. 

The President of Product Development at Medtronic’s, Mike Stevens realized the problem that Medtronic was facing. He analyzed that while the values of Medtronic were still concrete and strong, it was the product development process that need to be worked upon. He introduced certain amendments and improvements which included key elements, which created strong links between the management and employees.

The improvement in the processes of the company incorporated the following. According to Stevens, it was crucial to work with speed in order to meet deadlines and ensure that the product reached the market in the allotted time. This will automatically ensure that less time is lost and used more productively.

Furthermore, Stevens emphasized on the importance of fully allocated unit product costs in order to be more successful. The idea was to make employees understand how market share can be expanded by taking into account product costs rather than just the functional costs.

Thirdly, the more Medtronic came in with new ideas and quick methods to implement these ideas successfully with speed, the bigger market share it would enjoy. Thus, innovation was an essential part of the product development process plan.

Lastly, innovation and speed can only work best as long as the customers of Medtronic i.e. the surgeons and doctors are satisfied with the quality of the products. Therefore, Stevens stated that maintaining quality of the product along with speeding up the process and meeting deadlines and bringing in new ideas was essential. Steven elaborated that the entire process was linked together and having speed, but bad quality was a sign of failure. Similarly, the company could not have quality, but slow speed because considering the fast pace of technology and the cut-throat competition in the market, Medtronic had to ensure that it stayed at the front in the race.

3.Describe how Medtronic “made” decisions early in its life, and how it “makes” decisions at the end of the case. It is important to be specific in the process, flow and structures that influence how decisions are made. 

In its early life, Medtronic faced success as it was the only company in the field of pacemakers. During that time, the company had its functions supervised by functional managers. These managers made sure that the company remained interconnected. As years passed by; however, it became difficult for these functional managers to ensure connectivity and at the same time focus on their organization and thus, they started neglecting the internal synchronization of Medtronic. Thus, the company made a team of project managers whose job was see that coordination and connectivity existed. The project managers were not liable to pass decisions because the functional managers were still responsible to pass any major decision.

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