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Competitive Intelligence for a Medical Device Company in India*

CASE STUDY, BUSINESS ANALYTICS
ET Cases - GSMC, 10 Pages
AUTHOR(S) : Kanishk Gupta, Research Scholar, Amity University, Noida, Uttar Pradesh and Dr Namrata Pancholi, Assistant Professor, Amity University, Noida, Uttar Pradesh

Case Preview

Competitive Intelligence for a Medical Device Company in India

 

Lifeline Devices, a medical devices manufacturing company, operated in a highly competitive medical consumables segment in India. The company witnessed a declining market share for the last 3 years which led to a potential revenue loss. The management did not know what to do or how to stay competitive in the fierce market. The company MD, after much deliberation, decided to hire a Strategy and Marketing consultant to identify the reasons for the loss of market share and make the company more competitive. Lifeline Devices needed a person who could not only conceptualise its requirements, but also could have the mental strength and stability to deal with various departments and bring forward a change in the way decisions were taken.

Lifeline Devices Pvt. Ltd.

Lifeline Devices Pvt. Ltd. (Lifeline Devices) began its journey in 1989 as a family owned manufacturer of surgical ligatures and sutures at a location near Delhi. The company was amongst the first manufacturers of sutures in India. The owners had, right from the beginning focussed on quality. The owners believed that if they produced high quality products, they would sell automatically and could earn a good name and respect. Operating with this ideology, Lifeline Devices soon became known for its quality and reliable products..................

The Harbinger

It was the month of May in 2011, a massive fire was reported at the plant near Delhi. Because the facility was well equipped with adequate firefighting equipment and measures, no significant injury was reported to any of their employee, however, the fire damaged most of the finished products, work in progress and a large part of the facility..............

All was no Longer Hunky Dory

Lifeline Devices ended the year 2011-12 at lesser profits than the previous year. The sales growth was flat for the year, which was a first time. Profit decline was entirely attributed to the fire incident at their facility in May 2011, while, the lack of sales growth, after much deliberation, was also remotely charged on account of the fire incident. It was argued by the sales managers, that the fire incident was a huge distraction for the company, the employees were profoundly upset about it.............

What to do when no one knows what to do?

Lifeline Devices was under the toughest phase since its inception. The company which had never bothered about competition had fallen a prey to it. When no one knew what to do within Lifeline Devices, the MD thought, about seeking a solution outside.

During a trade promotion fair, he met with a school-time friend who was working as a business development head in a leading pharmaceutical company. Since both had their agendas to fulfil they decided to go ahead with their busy schedule and meet up for dinner.............

Competitive Intelligence – A New Phrase or a New Concept

CI was a new concept for Lifeline Devices. The challenge up for the MD was to not only to sell CI internally but to first understand it fully himself. He read about it on the internet for many days, before he even mentioned about it to anyone in the company. Once he was absolutely sure about it, did he mention it in one the board meetings..........

Introduction of CI in Lifeline Devices

The MD was very clear that he had to hire a full time CI consultant to set up the function internally. Through his network of professionals, he called in a few candidates.

Krishan Gopal, master’s degree holder in management from a reputed college, stood out among all the candidates. He was a dynamic and a thorough professional. He worked as a consultant in a CI consulting firm for more than 10 years...............

Meeting with the MD

“So, what do you think?,” Krishan was greeted with a sudden and awkwardly straightforward question. It took him back for a split second. He was confused what precisely did the MD want to ask, at the same time he did not want to sound silly. So very smartly he dodged the question saying, “Sir, I have seen a lot of harmony in the teams here, that’s why it is imperative for me to deep dive into the operations and performance before I say anything”...........

Business as Usual

The next day itself, Krishan started working on his task. The first thing on his mind was to dip himself into the company’s history. He picked up all the financial reports of the company since inception and started going through them. He observed continuous growth in revenues till 2010-11, after which they plateaued and lately showed signs of decline ..............

Products and markets

Lifeline devices dealt in nearly all types of sutures in the market. The company was pioneer and market leader in many segments. However, with the recent trends, it was evident that it could change very soon. The company achieved most of its business from institutions...........

Reporting Structure, Responsibilities and Accountabilities

After the data crunching exercise for few days, Krishan booked an appointment with the MD to understand the internal reporting structures and departments along with their responsibilities, accountabilities and appraisal system. He suspected that whatever he saw and learnt in the preceding days were only the symptoms, the real problem was yet to be unveiled............

And the end of the honeymoon period

Krishan decided to speak with the sales managers next. He thought it would be exiting to speak with them as they were the most important pillars of the company. They were literally responsible for all the revenue and the operations.

He started from the sales managers of the north and followed the order of sales contribution. He again had to be very careful with his words, in order not to intimidate them. But their responses had to be the key to finding the real problem. As he proceeded, he realised he was not getting the support as he got from the MD. He received similar answers from all..........

Exhibits

Exhibit I: Lifeline Devices’ Performance

Exhibit II: Share of Business (FY 2014-15)

Exhibit III: Region-wise Sales Contribution, 2014

Exhibit IV: Region-wise Team and Distributors’ Numbers

Exhibit V: Existing Company Organogram

Exhibit VI: Core Members of the Strategic Decision Making Team

Exhibit VII: Identification of Problems and Recommended Changes

Exhibit VIII: New Structure

Exhibit IX: Structure of Strategic Planning Team

Teaching Note Preview

Competitive Intelligence for a Medical Device Company in India

 

Synopsis

This case is about Lifeline Devices Pvt Ltd, incorporated in 1989 as a manufacturer of surgical ligatures and sutures. It operated as a family owned business with one key member as the MD of the company. The company was among the first manufacturers of sutures in India. Lifeline Devices was the market leader in most of the segments. The emphasis of the company had always been on quality.

The company started its operations in the north and gradually expanded to a pan India level. They had a manufacturing facility near Delhi, and added another facility near Indore. They had an elaborate network of distribution. Many large institutions were its key clients; and distributors’ network was quite robust.

Lifeline Devices had progressed steadily from the time of its inception. The employees were highly motivated and most had been attached to Lifeline Devices for years.

However, the progress of the company was halted due to various events in the recent years. First, the incident of fire at one of its facility near Delhi. This led to significant loss to the facility and also factory down time. This was followed by some of the employees leaving the company and moving to others, specifically the sales manager of the north, who had worked as a close aide of the MD and also contributed the maximum in terms of business. It had an immediate impact on the business and as a result the sales growth stagnated.

Over the years as the competition became intense, the battle for market share became fierce. No one had a clear idea how to compete in this competitive environment. This resulted in the decline in both sales and profits.

After discussing with his friend, MD decided to hire a competitive intelligence professional to set up CI practices in the company. Every strategic decision to be taken would have to be based on the knowledge of the competitive environment. This would make the decisions more effective and increase the company’s  competitiveness in the market.......................

Assignment Questions

  • I. What is the key issue that has contributed to the decline in the performance of Lifeline devices off late?
  • II. Critically analyse the efforts made by Krishan Gopal while reaching a conclusion. Could he have been more concerted in his efforts? Why?
  • III. ................

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Abstract

Lifeline Devices, a medical devices manufacturing company, operated in a highly competitive medical consumables segment in India. The company witnessed a  declining market share for the last 3 years which led to a potential revenue loss. The management did not know what to do or how to stay competitive in the fierce  market. The company MD, after much deliberation, decided to hire a Strategy and Marketing consultant to identify the reasons for the loss of market share and make the  company more competitive. Lifeline Devices needed a person who could not only conceptualise its requirements, but also could have the mental strength and stability to deal with various departments and bring forward a change in the way decisions were taken.

Krishan Gopal, who had specialised in Competitive Intelligence (CI) and Strategic Management, was appointed for this position. He was immediately up with the task to identify the CI needs of the firm, the tools and techniques that would be used to collect and analyse data, disseminate critical analysis to key stakeholders and encouraging the company decision makers to consider his inputs before taking any key decision. However, he soon realised that he had a huge uphill task. On one hand was the MD who wanted immediate results, while on the other hand were the managers who had been working for so long in the company without any conscious efforts into CI.



Pedagogical Objectives

  • To realise the importance of competitive intelligence in the highly competitive medical devices industry in India
  • To discuss the best approach to set up CI practices as a conscious effort in an organisation operating in such an environment

Case Positioning and Setting

The case can be used in MBA/PGDBM, Executive MBA, Management Development Programs and Executive Workshops in the area of general management and strategic management.


* GSMC 2016, IIM Raipur

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