Medtronic in China: Where “Simpler” Serves Patients Better

1. Assess Medtronic’s decision to develop and market the new Champion heart pacemaker in terms of the following reasons for new-product success: (a) points of difference, (b) market attractiveness, (c) bad timing, and (d) economic access to doctors and patients.
2. The new champion heart pacemaker was designed to be used by the Chinese. It consumed less power, it lacked a dual chamber stimulation and stereo escaping leads. It was designed this way in order to favour the Chinese market, through being cheap and easily affordable, and easy to work with (Case D-10).
3. The heart pacemaker was cheap, going at $1000 which was half the price of the ones in Chinese. This consequently attracted many customers to it. Moreover, it was convenient and easy to use because it was mainly designed for the Chinese market.
4. The company did only invested on the new machine, and forgot about the sales and marketing of the pacemaker, this made the company to realize huge losses after the completion of the new machines.
5. The product was cheaply available for the patients, but the main problem was the lack of knowledge of using the products that the doctors lacked. This majorly disadvantaged the company and it therefore needed to hire physicians who could train other physicians on how to use the products.
6. Discuss the steps of the new-product process as they relate to the Champion pacemaker.

The company designed a machine which could be easily accessed by people in less developed countries. Secondly, in order to reduce the cost of manufacturing the product, different components were removed (Case D-10). Thirdly, the company set up a manufacturing plant in China in order to effectively manufacture the product. Finally, it hired a sales force, and physicians in order to help in the sales and teaching physicians on how to use the products respectively.

3. New-product development is important to a company like Medtronic, but it is hard work, and often leads to failure. How can a company encourage its employees to take initiative, make a profit, and be ethically and socially responsible?

A company can encourage its employees to take initiative and make a profit through allowing them to come up with decisions and discussing them before actually putting them into practice (Case D-10). This consequently helps in boosting the morale of the employees and thus making them to believe in themselves.

4. Relate Medtronic’s decision to sell pacemakers in China to its corporate mission statement. How does the decision relate to these Medtronic stakeholders: (a) shareholders of Medtronic stock, (b) Medtronic employees, and (c) Chinese patients?
5. a) The decision related to its shareholders in the sense that they are able to affect the society positively through their goals which is to support those in pain.
6. b) The decision also relates to the company’s employees through giving them a chance to come up with new ideas to help develop the company (Case D-10).
7. c) Chinese patients are able to benefit from the company, as it is working according to its mission statement.
8. Medtronic chose to design and build a new low-priced, highly reliable, reduced-feature heart pacemaker in its Shanghai plant. What are the strengths and weaknesses of this decision from (a) a marketing viewpoint and (b) an ethical viewpoint?
9. a) The company will be able to attract many customers, since they will be able to purchase the machines as locally made. Moreover, the company will also be able to save the costs of importation of the goods from the US to China. In order for the company to be able to reduce the cost of the product, it will need to reduce some components in the machine and thus making a low quality product (Case D-10).
10. b) The product is mainly manufactured for the Chinese market, and thus making it hard for people from other countries to purchase it.

 

Reference

Case D-10. Medtronic in China: Where “Simpler” Serves Patients Better