MDCM IT Strategy. Case study Essay Example | Topics and Well Written Essays - 1250 words

MDCM IT Strategy. Case study - Essay Example Consolidation in the medical device industry had also slowed market growth. As a result MDCM had shifted its growth strategy from geographical reach to diversification through acquisitions. The type of business that MDCM operated in was contract manufacturing. In this business, the manufacturer had pioneered the process of creating close partnership arrangement with customers to maximize their success with MDCM’s products. MDCM had decades of experience in the business. However consolidation in the industry had given greater bargaining power to the customers so that the company could not price competitively. MDCM’s competitive position was further weakened by a lack of cost control. There was lack of coordination among departments, suppliers, logistics so that expected synergy gains from the acquisitions could not be realized. By focusing upon acquisitions, MDCM was in effect implementing the strategy of diversification into related products. This made the company more globally diversified, enabling it to better serve large customers who were also becoming globally diversified. However MDCM’s operating and profit margins continued to fall in a compe titive market. Because MDCM operated in an industry which was consolidating and which had more efficient competitors, the company continued to decline in market share and profits. As mentioned in the case, even though MDCM was the largest company in the industry, it had the worst operating and profit margins. ... The overall strategic goals of this firm at this time are to implement operational and cost improvements and to focus on IT integration. The two goals are related since operational and cost improvements can be realized from IT integration. As indicated in the case, the management was facing problems with the cost structure, sales and marketing and production scheduling. These problems could be addressed by the right IT implementation plan. The implementation plan should be aligned to the overall strategic goals of the firm which are to implement operational and cost improvements in medical device contract manufacturing. The company had recently lost its competitive advantage because of its high internal costs which hampered the company’s ability to price competitively against smaller, more efficient rivals. As a result sales and profits continued to decline. Therefore the top priorities at this time were to undertake a project related to IT strategy synchronization that would lead to improved information flow which would facilitate operational and cost improvements. The industry had gone through a consolidation process which reduced the number of customers. Because there were fewer larger customers, they had more pricing power. Therefore, in order to remain competitive, MDCM would have to access more information about its business processes, thus enabling the managers to take corrective action which would turn around sales and profits. The critical success factor at this time was tight coordination between the different business functions. Traditionally the strategic focus of the company had been to locate close to the customer. However this strategic focus had been changed as a result of the Horizon 2000