Overall Strategic Goals of MDCM - Case Study Example

Tactical objectives MDCM falls in the leaders’ quadrant of Accenture document. This is because the company applies a top-down management approach. The information flows from the senior management to the low levels where implementation takes place. Overall strategic goals of MDCM MDCM is a large company with a history of immense performance. From the information given in the report, some strategic goals feature especially at the moment when there was a dire need to make an overhaul in the IT section. First the company’s main goal was to provide a manufacturing contract that was the best end-to-end medical package service. The company deals specifically with manufacturing of medical products. Thus, its main goal had to be in line with what it produces. The company worked as a contractor and so it did no research, marketing or designing of the products (Jeffrey and Norton 2006). The company strived to meet its goals by offering testing, clean room assembly, non-clean room assembly and controlled environment. A second goal was to produce the best quality products that met the customers’ needs. The company ensured achievement of this goal by employing highly skilled machinists. The company also aimed at producing fabricated and specialized equipment for use in assembling medical devices. The company had received reputation for producing highly customized version equipment for applications that were unique. Another goal of MDCM was to ensure a close relationship with customers in order to bring manufacturing costs down as much as possible. With their motto of delivering quality assemblies and parts timely, the company produced marvelous satisfaction of its customers. The firm also had a goal to compete successfully and expand its reach in the world. It achieved this earlier in 1980s by opening manufacturing facilities and new offices close to the customers. The company ensured the survival by making significant acquisitions of companies with contract manufacturing competencies similar to those of MDCM. The competitive environment of the firm The competitive environment of the MDCM has characteristic factors including supplier power, new entrant’s threats, and substitute’s threats, buyer power and rivalry. Buyer power, threat of new entrants, threat of substitutes and supplier power all contribute to rivalry. Rivalry, which is the competition of firms producing similar products, leads to low profits. From the report, we note that, in 1980s, MDCM made low profits because of new entrances of foreign competitors, which had higher global capabilities than MCDM. The power of the supplier the firm employs matters a lot. In this case, the supplier ensures that the raw materials including components and labor reach the firm timely and efficiently. The key issues of supplier power include supplier concentration, differentiation of inputs, input impacts on cost or differentiation and presence of substitute inputs. Also, included here are threats of forward integration, switching costs of firms in the industry and costs relative to total purchases in industry. In the threats to new entrants, we consider barriers to entry including absolute cost advantages, access to inputs, propriety learning curve, government policy and economies of scale. Factors such as brand identity, access to distribution, expected retaliation, proprietary products and capital requirements also fall in this category. In an industry, not only the incumbent rivals pose threats. There is always a possibility of new firms entering the industry thus affecting competition. Characteristics that inhibit additional rivals and protect high firm profit levels are ‘barriers to entry in business. The impact that customers have on the producing industry is the power of buyers. Monopsony is the term used in a case where we have many suppliers but one buyer. In such cases, the buyer determines the prices. Buyers are powerful if they concentrate, purchase a significant output proportion or possess a credible backward integration threat. While they are weak if producers threaten forward integration, fragmented or when there is critical portions of buyers’ inputs supplied by producers. Products in other industries are substitute products and contribute to substitute threats in industry. When price change of a substitute product affects the demand of the product, then a threat of substitute prevails. Substitute products affect the price elasticity of a product. This happens because demand becomes increasingly elastic as substitutes become available since there are many alternatives for customers. The competition brought by a Threat of Substitute originates from products coming outside of the industry. For instance, the prices of steel cans, glass bottles and plastic containers constrain the price of aluminum beverage cans. The strategic response(s) MDCM should employ The company should employ strategic responses on levels including corporate, business unit and functional or departmental levels. Corporate level strategy is about business selections in which the firm should compete together with coordination and development of the businesses portfolio. Corporate level strategy has concerns including reach, competitive contact, business interrelationships and managing activities, and management practices. Reach defines issues, which form corporate responsibilities. These could be the corporation’s overall goals, business types the corporation should engage, and the manner of managing and integrating the business. Competitive contact refers to where localization of competition should occur in the corporation. Strategic business unit can be a product line, division or a profit center independently planned from the rest firm business units. Strategic issues at the business unit level emphasize on sustaining and developing a competitive advantage for produced services and goods. The strategy formulation phase at the business level deals with change anticipation in technologies, demand, and strategy molding to accommodate the changes. It also deals with business positioning against rivals and use of strategic actions such as vertical integration to influence the nature of competition. The level of the operating departments and divisions is the organization’s functional level. At the organization’s functional level, the strategic issues have a relationship to the value chain and business processes. The strategies of functional level in finance, marketing, human resources, operations, and R&D include coordination and resource development. In this way, the organization can execute effectively and efficiently the strategies of business unit level. Organization functional unit provides input for the corporate level strategy and business unit level. It includes information on capabilities and sources the company can base its high-level strategies. Critical tactical objectives for MDCM The company had a massive problem in its IT operations. The first objective should be to harmonize standards and platforms used in the firm. In this case, the systems used should be uniform in the company to ensure a smooth running of the firm’s operations. The company should ensure that this occurs in the three levels of the business namely the corporate, business unit and the functional or departmental level. This will help solve the problems witnessed by Atkins such as overlapping projects, which at times contradicted. MDCM has had chaos due to persistent information flow lags among suppliers, departments and logistics leading to inaccurate scheduling headaches, bloated inventory and forecasts in the chain of supply (Jeffrey and Norton 2006). A second crucial objective should be to carry out frequent servicing, installations and maintenance of systems in all the three levels of business; corporate, departmental and business unit. According to Jeffery and Norton (2006), the company did not implement any systems since the year 1995 when it installed an accounting system. Another objective to address the noted problems should be to establish one location for housing the systems. In the firm, there were many locations of housing the systems. Thus, there was large disarray in the company, which made it difficult to locate a system. Another crucial objective should be to carry out training of the employees including the management. This will ensure that new global It system implementation succeeds. Afterwards, the company should ensure that its employees undergo refresher trainings as the need arises. Departments should also plan to do on job trainings especially for new employees. The company should come up with a global strategy in which case the products are the same in all countries in type and quality. Another objective that the company should make is to cut down the costs of production by servicing machines, replacing those that are old and purchase new ones in order to raise the profits made. In conclusion, the company has the capability to make tremendous achievements if the management takes the right course. The company enjoys an advantage because it is global and can use its customer base to continue dominating the market. Works Cited Jeffrey, Mark and Norton, F. Joseph. “MDCM, Inc. (A): IT Strategy Synchronization.” Evanston, IL: North Western University. 2006. Print. Read More