SWOT Analysis for Medline - Research Paper Example

SWOT Analysis Strengths: Strengths of Medline include that it is the largest privately held medical supplier in the United States. Another, strength of Medline is market dominance. It holds the largest market share in more than a dozen medical product categories and these products are mostly ranked amongst the top position. Innovation is also strength of Medline. Medline makes the best use of the latest technology. With the changing medical science it comes up with new innovative products that work even better. For the purpose of innovation, Medline has an efficient Research & Development team which also means that Medline invests heavily in its Research & Development department. Medline has differentiated its products from the products of its competitors. To avoid threats and to keep its products differentiated, Medline uses patents, licenses and trademarks. Strength of Medline lies in that it is the industry leader in medicinal products. The sales growth of Medline has been very high and in 2010 the sales were of over $4 Billion. There has been a continuous increase in the annual sales of Medline and this increasing annual trend acts as strength for Medline. Quality is also the strength of Medline. Medline provides its customers with products that are of high quality. The company does not compromise on the quality of its products and that acts as strength because it helps in maintaining the positive brand image of Medline. Medline is an old manufacturer of medical products and customers trust its products. This level of trust with its customers acts as strength for the company. Another, strength is the wide assortment of products that it offers. It manufactures and distributes over 125,000 medical and surgical products to healthcare institutions and also the retail market. Such a large product range is an indicator of strength of a well-established firm. This is only possible if the firm has been successful in the market. Medline has not restricted itself to any one healthcare field, but it serves across all the markets related to healthcare, be it hospitals or home care agencies. The competitive advantage of the Medline is its biggest strength. Weaknesses: Strengths and weaknesses of a firm belong to the internal environment of the firm (Alkhafaji, Abbass F 2003) Major weakness of Medline is that in order to protect its brand image and also not to compromise on the quality of its products, even if its costs more than what the firm has anticipated. Another weakness of the firm is that invests too heavily in the Research & Development department. This often results in failed innovations and the company has to bear the sunk costs because the team is unable to come up with a successful product. This happened only a very few times. But with such heavy investment, there is always a risk associated. Another weakness is that the company pays more attention to the customer value instead of its stock value. From the customers’ point of view this might be the strength but from the point of view of shareholders and the company itself this is a weakness. Medline protects its products through patents, licenses and trademarks but it does not put off the competition. Opportunities: The strength of Medline has carved the path of opportunities for the firm. Globalization is the biggest opportunity for the firm (Hitt, Michael A, R D. Ireland, and Robert E. Hoskisson 2011) It can exploit new markets. It can go for those markets that have yet not been tapped by the competitors. Medline distributes its products mainly within the Unites States. Export industry provides Medline with an opportunity. Medline can go global and start exporting its medical products to other countries as well. There is a continuous innovation taking place in Medline. The process of innovation could be used to come up with more sophisticated medicinal products for other countries as well. This will provide Medline with a whole new chunk of market that it could serve. Medline runs its own clinical programs. There is an opportunity that these programs can be extended globally. Another opportunity is related to education. Medline has developed its own university named “Medline University”. The university can provide with online and distance-learning programs for the students across the globe who wants to learn about medicine. This will add to the revenues of Medline. Threats: Competition is the biggest threat faced by Medline. Weakness of the firm that it does not put off the competition rather it protects its own products through patents etc results in a threat. Medline products are widely available in the US market and can easily be imitated by the competitors. They may change the outlook but may use the line of innovation that has been worked upon by Medline. Plus another threat is that for some medical product categories are dominated by the products of the competitors and the products of Medline do not hold the top rank in these categories. Another possible threat is that the products produced by Medline become obsolete because of the technological advancements. Medline focuses on the customer needs and wants and produce products that are wanted by them. If there is a change in the customer needs and wants, then the firm will have to suffer because the already produced batches will be of no use. Medline will have to then look for other markets to get rid of those products. Pricing is another threat faced by Medline. There is always a risk in setting the prices. The firm does not charge very low prices. In fact the prices are high. Prices set by competitors pose a threat. If the competitors set prices below the prices set by Medline, then the consumers are likely to switch to the competitors’ brands. Bargaining power of suppliers and customers also pose a threat to the firm (Alkhafaji, Abbass F 2003; Jennings, Jason 2005) In case of Medline bargaining power of suppliers is less but the bargaining power of customers is more which poses a threat to the firm as the customers may switch to other brands if they are not satisfied by Medline. References Jennings, Jason. Think Big, Act Small: How America's Best Performing Companies Keep the Start-Up Spirit Alive. New York: Portfolio, 2005. Print. Alkhafaji, Abbass F. Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. New York: Haworth Press, 2003. Print. Hitt, Michael A, R D. Ireland, and Robert E. Hoskisson. Strategic Management: Competitiveness & Globalization. Mason, OH: South-Western Cengage Learning, 2011. Print. Read More