STRATEGIC

MANAGEMENT
Portfolio Analysis for
Medtronic and Siemens

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 Table of Contents
Abstract ...................................................................................................... 3

1. Introduction .......................................................................................... 4

2. Medical Equipment Companies in UAE ................................................... 5

2.1 Medtronic Inc ..................................................................................... 5

2.1.1 Vision and Mission ......................................................................... 6

2.2 Siemens AG Company ......................................................................... 6

2.2.1 Mission and Vision ......................................................................... 7

3. Comparative Analysis ............................................................................ 7

3.1 Strategic issues at Medtronic Inc and Siemens AG .................................. 8

3.2 Strategic Management and Decision Making ........................................... 8

3.3 Analysis for gaining competitive advantages ........................................... 8

3.3.1 Micheal Porter’s 1980 Generic Strategies .......................................... 8

3.3.2 Blue Ocean Strategy .................................................................... 10

3.3.3 Michael Porter Five Forces Analysis ................................................ 10

Threat of New Entrants ........................................................................... 10

Bargaining Power of the Supplier .............................................................. 11

Bargaining power of the Buyer ................................................................. 11

Availability of the Substitutes ................................................................... 11

Competitive Rivalry ................................................................................ 11

4. Conclusion ........................................................................................... 11
 List of Figures

Figure 1 Medical Device Market Statistics .......................................................... 4

Figure 2 Overview of Siemens Company ........................................................... 7
Figure 3 Michael Porter Generic Strategies ........................................................ 9
 Abstract

The purpose of this essay is to pursue the portfolio analysis of the two
important players in the industry of Medical Equipment Industry. These two players
include the Medtronic Inc and Siemens AG. It is evident from the information
gathered in this essay that this industry is the focus of the investors as the margin
of profit is very high in this industry. Due to increase in the development of the
product and integration of the innovation it leads to higher growth in the region.
In the middle east and UAE region specifically, there is no company which is
manufacturing the medical equipment at the local level. Most of the medical
equipment instore have been dominating by the international brands that are
imported from other countries. These two companies are also international but
extensively used in this country.
In this easy, several important frameworks are used to highlight strategies of the
company to gain the competitive advantage. It assures that many of the companies
in this region are creating the competitive advantage based on the innovation that is
made by the companies.
In this analysis, it is also determining that Medtronic company is determining a
higher level of integration with the innovation as compared to the Siemens and assure
the development of the products with the rapid pace. It is important for the company
to her strategies that are essential for having a higher level of competitive advantage.
 1. Introduction
In this competitive business environment for medical equipment industry,
many of the important companies are playing a vital role in providing high-quality
equipment’s to facilitate the medical field (Wei, et al., 2011). With the advancement
in the technology for the field of medical, the innovation is very rapid and frequent
as well. Companies are striving to gain a higher level of competitive advantage based
on the innovation and dynamic integration of the technological advancement with the
accuracy of the medical facilitation. It allows the companies to perform well in the
medical equipment industry and gain higher sustainability for the economic condition
as well. The revenue generated by the companies are very high which is also a
positive performance indicator for the medical equipment industry. It is evident from
the industry analysis of medical equipment industry that most of the manufacturing
has been done by the US and other developed European countries. It is evident from
the investigation of the industry that manufacturing is still in the domain of the
developed countries and all the innovative machinery have been supplied to the
developing countries (Chen, et al., 2015).

Figure 1 Medical Device Market Statistics

In case of UAE, the medical equipment has been supplied to the health care
center by many of the known supplier. All the machinery that is used in the healthcare
centers in UA is imported from other countries. The industry of medical equipment is
highly dominating by the key player in the industry.
In UAE, most of the medical equipment’s are imported from the US, Germany,
Japan and other developed countries which have played a vital role in the
development of the medical equipment as well as considerable innovations. It is also
demonstrated in the medical equipment reports that many of the important
companies have their own supplier channels in UAE as well as some of the supplier’s
companies are also performing their duties (Srivastava, et al., 2014).
In this portfolio analysis, two of the world known companies are investigating
whose equipment’s are extensively used in UAE healthcare center. The medical
equipment industry has a large market in the GCC region. There are many important
market drivers for these companies which ensure the higher level of revenue for the
companies as well. It is also evident from the investigation that increases in the need
of the healthy life and medical excellence in UAE is also considered to be an important
indication of rate development of the medical equipment industry in this region
(Jabbari, et al., 2014).
2. Medical Equipment Companies in UAE
As the demand for the innovation and technology have been increased with
the rapid speed, many of the companies are providing several important types of
equipment which are essential to fulfilling the medical needs. Due to increase in the
demand for the medical equipment all over the world, many of the companies are
producing several important types of equipment which are very essential to facilitate
the medical industry. In the medical equipment industry, there are many companies
which are considered as the top manufacturer of the equipment. In this essay, the
focus of the portfolio analysis is on two major companies which are Medtronic Inc
having total revenue of 17.1 billion dollars and Siemens AG having 17.0 billion dollars
of revenue. Both companies are considering as the top manufacturers are industry
leaders as well. The equipment produced by these companies are solely available in
the UAE region. That is the reason that these companies are investigated in this
report (Jarosławski & Saberwal, 2013).
2.1 Medtronic Inc
 Medtronic Inc is one of the leading company in the medical equipment industry
in UAE. It is manufacturing many of the important products that are essential to
facilitate the medical industry. The equipment produced by the company is solely
known for its accuracy and well-developed innovations as well. The revenue of the
company also indicates its acceptance in the industry (Howard, 2014).
The leadership of the company is very concern with the development of the
product and emphasize on the dynamic and rapid innovation as well. The focus of the
company is to ensure the facilitation in several important fields of the medical. It is
evident from the investigation that many of the important and considerable increase
in the development of the equipment by this company is based on the considerable
increase in the demand for the new technologies. In this company, a total number of
employees are 84,000 which also highlight the performance of the company as well
as its capacity (Kirisits & Redekop, 2013).
2.1.1 Vision and Mission

Following is the mission of the Medtronic Inc which is the focus of the
top management in all kind of strategic decisions.
“Written in 1960, our Mission dictates that our first and foremost priority is to
contribute to human welfare. Over a half-century later, the Mission continues to serve
as our ethical framework and inspirational goal for our employees around the world.
It guides our day-to-day work and reminds us that; our efforts are transforming the
lives of millions of people each year”.
2.2 Siemens AG Company
It is evident from the investigation of the industry that Siemens AG is also well
recognized in the medical equipment’s company and facilitate the healthcare
institution of the UAE. It is important to understand that the diversity in the provision
of the facilitation to several other industries in Siemens is much higher than other
companies. Siemens AG Company is working in many important domains of the
technological manufacturing. Facilitation of the healthcare equipment’s development
is one of the core function of the company. It is investigated that many of the
important equipment’s that are produced by the company are highlight acceptable
and consider to be extensively innovative products in the medical equipment industry
(Vladimirov, et al., 2014).
 The most important priority of the company is to facilitate the patients in all
perspective. The number of issues that are covered under the domain of the medical
equipment manufacturing is very high. Many large numbers of diseases have been
treated by using the equipment’s that are manufacturing buy the Siemens.

Figure 2 Overview of Siemens Company

2.2.1 Mission and Vision

Following is the mission and vision of the Siemens company based on

which it is leading its business in the region.
“Being a leading global healthcare company, we at Siemens Healthiness are
continuously developing our portfolio, from medical imaging and laboratory
diagnostics to adding managed services, consulting, and healthcare IT services – as
well as further technologies for therapeutic and molecular diagnostic”
3. Comparative Analysis
In a comparison to the performance of the company, there are many important
factors which are considered important to compare two important companies in the
medical equipment field. It is demonstrated in the industrial analysis that many of
the important indicators are used to compare the companies in this field. The main
indicators which have been discussed for the comparison are accuracy and quality of
the equipment. Perhaps the general description of the comparison is that the
company which has a high level of revenue is very effective and producing the high-
quality products but there are some other indicators why will also be discussed in this
easy based on several important frameworks.
To compare the Medtronic Inc and Siemens AG medical equipment company it
is very important to understand the strategic issues faced by the companies.
3.1 Strategic issues at Medtronic Inc and Siemens AG
There are many important issues that have been raised due to increase in the
technological advancement in the industry. It is important to investigate the field of
the medical need rapid innovation and considerable advances in the development of
procedures that are essential to have highlighted fragmentation in the markets. Due
to increase in the technological advancement, both companies need to have rapid
research and development in their field to maintain the competitive advantage in the
industry. The revenue detail of both companies indicates that the competition among
these two companies in the medical equipment industry is very high. It is important
for the top management of both companies to ensure the development of the
strategic plan to facilitate the fluent development of the company and its respective
market as well (Steinman, et al., 2010).
3.2 Strategic Management and Decision Making
It is evident from the company performance that top management of both
companies is emphasizing on the strategic management to highlight the performance
of the common as well as to assure the development of the long-term relationship
with the indication of the fluent growth the respective market. The focus of the top
management on research and development to implement frequent innovation in the
product and services of the company to ensure the rapid development in the new
market which untimely increase the level of profit for both companies.
3.3 Analysis for gaining competitive advantages

3.3.1 Micheal Porter’s 1980 Generic Strategies

There are three important strategies provided by the Michael Porter to

investigate the strategy of the company that is suitable to gain a higher level of
competitive advantage in the market. These generic strategies are “Cost Leadership,
Differentiation, and Focus”.
 Figure 3 Michael Porter Generic Strategies

The Medtronic incorporation is one of the most authentic and accurate

manufactures of the medical equipment which is recognized all over the world. It is
very important for the top management of the company to ensure the high quality of
the products which are already determined by the top management. It is evident
from the investigation that many of the important and considerable enhancement in
the company have been made based on “Differentiation Strategies” that are used by
the company. To sustain in the competitive business environment, the focus of the
company is to ensure the rapid innovation to create the differentiation in the market.
The Siemens AG have different agenda of working. As this company is working
in many different domains of the technology product, the overhead cost of the new
development and innovation is very low in the market. The research and development
desperate have a sole focus on the lower cost of the equipment’s an increase in the
number of the customer that is why it is evident that Siemen is using the “Cost
Leadership Strategy” (Melonas & McNary, 2010).
 3.3.2 Blue Ocean Strategy

Medtronic Inc and Siemens AG are very effective companies in the medical
equipment industry. It is evident from the investigation that many of the important
decision has been made by both companies to sustain in the competitive business
environment.
Medtronic has excellent eldership strategies which allow this company to
approach for the blue ocean strategy. It facilitates this company to ensure the long-
lasting growth in the industry with the effective less of the higher level of revenue
and innovation as well. It is also important for the company to have many higher-
level employees to facilitate the growth of the company as well. It is evadite forms
the investigation that major portion of the company is in Blue ocean rather than the
Red ocean. Overall circumstances of the industry are red oceans but the excellence
strategic management has to lead the company to ensure the blue ocean for the
company operation.
On the other side, Siemens is facing issues in the field of the medical
equipment. It is evident from the investigation that many of the company strategies
have been developed by the company top management to enhance the credibility of
the company and its overall operation to highlight the integration of the company
success with that goal of the company. It is evident from the investigation that the
major portion of the top management has also focused on the innovation but with
the cost-effective leadership strategy. It is also evident that company is facing some
sort of Red Ocean as well (Shibani, et al., 2013).
3.3.3 Michael Porter Five Forces Analysis

Threat of New Entrants

Medtronic Inc and Siemens AG in UAE are not facing any kind of new entrant’s
threat. There is not medical equipment manufacturing company in the region. But
not the other side due to increase in the business stability of the region several new
companies have started their operation in the region which can bring competition for
both companies in the UAE region. Moreover, the threat of new entrants from the
multinational companies is higher for Siemens as compared to the Medtronic’s.
 Bargaining Power of the Supplier

The bargaining power of the supplier is higher for the Medtronic as compared
to the Siemens. The main reason behind this issue is that Siemens is working in many
other technological domains in which they are using the raw material from many
other suppliers as well due to which this company is not facing any issue to have the
raw material or strong relationship with the supplier. On the other side, the Medtronic
is only providing services in the medical equipment industry that is why it is important
for the company to ensure the facilitation to the supplier for long term relationship.
That is why the supplier is having higher barning power with this company.
Bargaining power of the Buyer

Being a company and the buyer of the raw material for the manufacturing of
the medical machinery, it is evident that Medtronic’s Inc has the higher level of
bargaining power. It is because this company has a higher level of revenue in the
industry. The market share of the company is higher and sold more products as
compared to the other companies. It is also evincing from the investigation that the
Medtronic’s can also facilitate many suppliers at the same time.

Availability of the Substitutes

The availability of the substitute for both companies under discussion is very high.
There are many companies which are preparing the identical, products. These
products are also supplied in UAE to facilitate the patients and healthcare industry as
well as to emphasize in the market of UAE These substitutes are also considered to
be the main reason behind the rapid innovation as well (Gibson & Farah, 2012).
Competitive Rivalry

The competitive rivalry between these two companies is also very high. Both
companies are supplying their equipment in the same market at an identical price as
well. the margin of decision is very low for the customer to ensure the high market
share. Due to the rapid innovation in the industry, both companies are also facing
the high impact of rivalry from other companies as well.
4. Conclusion
It is concluded from the investigation that medical equipment industry is one
of the most prominent industry which have high technological integration as well as
high innovation. It is demonstrated from the investigation that many of the important
strategic decision has been taken by the top management of both companies to gain
a higher level of competitive advantage.
In UAE, there is no specific manufacturing company at the local level for the
medical equipment’s that is why all the important equipment have been supplied for
the other countries to facilitate the people. Due to the import of such machines and
equipment in this region, it will lead to increase the prices of the equipment as well
as it's competing. UAE is the most emerging market for the medical equipment due
to the raining concern of the healthy life. that is why many of the international
companies are focusing on the development of the UAE market by supplying the
recent innovation. It is also evident from the investigation that Medtronic Inc is using
the differentiation strategy in the market of UAE, as well as the Siemens AG, is using
the Cost leadership strategy. It is important for both companies to focus on the rapid
innovation to resist the rapid change in the technologies all over the world.
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