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?