Executive Summary
As a strategic consultant, I will develop a report on ResMed, a San Diego, California-based medical equipment company. It works to provide cloud-connectable medical devices utilized for the treatment of human respiratory conditions such as sleep apnea, chronic pulmonary disease, and Corona (Covid-19), which has recently wrecked havocked the whole world since the year 2020. This report will analyze the company’s external and internal environment and explore its resources and capabilities that have enabled it to pivot during the COVID-19 pandemic. It will also assess its long-term strategies for mitigating future problems that might arise in its operations. Critical issues in this analysis include RESMED PESTE analysis, Porter’s Five Forces, Value Chain analysis, and the VIRO Framework that seeks to explore how this medical company has survived during the pandemic period. Subsequently, there is an overall evaluation of how RESMED seeks to be successful in the future by suppressing its negatives and enhancing positivity between managing competition and providing quality service.
Introduction
ResMed is a medical equipment company headquartered in San Diego, California. It is involved with the production of cloud-connectable medical devices used in treating respiratory conditions such as sleep apnea. During the Coronavirus pandemic, this company could produce ventilators and bi-level devices that were helpful for patients with COVID-19. ResMed has employed over 8,000 employees worldwide as of June 2022, and its operations have intensified in over 140 countries globally (Antras & Chor, 2021). However, business was affected during the pandemic by many factors, such as logistics and operations, which saw sales decline despite the urgent need for equipment in various countries worldwide. During the Covid-19 period, ResMed tried to cope with its services by providing medical facilities and apparatus to countries worldwide that needed ventilators for treating Covid-19.
External Analysis
PESTLE Analysis
Gao & Ren (2020) Says that PESTE is a valuable tool that will scrutinize ResMed’s political, environmental, social-political, and technological scenarios as external events that affect the company’s performance in California and another geographical environments. Since the demand for medical equipment and supplies increased due to Covid-19, disrupted, supply chains also made it impossible for medical companies to grow and supply them.
- Political
It involves the administrative decisions that affect ResMed operations during the Covid-19 pandemic. There were government and movement restrictions in many parts of the US, including its headquarters in California which thoroughly disrupted the supply chain making it slow despite the allowance for essential services. However, what made it pivot during the Covid-19 period was that the government allowed for trade conduction for domestic and international necessary service delivery (Cistulli et al., 2019). ResMed conducted business but had to comply with all the Covid-19 safety measures in handling their businesses which seemed expensive, including proper gear at work, vaccinations, masks, frequent testing, and following CDC travel guidelines.
- Economic and Socio-Cultural
Economic and socio-cultural conditions directly influence ResMed, especially in its quest to pivot through the Coronavirus period. As much as California’s economy is open, Covid-19 has not gone away, and businesses still need to take steps to prevent the spread. ResMed had to thrive to produce many ventilators with a minimal workforce and minimize the production cost at all times. It had to develop a production plan and create value without succumbing to the effects of the pandemic. Looking at the socio-cultural statuses, older people were most affected by the pandemic, and many died due to the virus, especially if they had pre-existing respiratory conditions. ResMed joined the world’s largest remote patient monitoring network, where physicians could view patient data in the cloud (Gao & Ren, 2020). Patients were able to get more customers using this approach, which made it augment its bazaar extension by gaining brand knowledge worldwide and high sales.
Porter’s Five Forces
ResMed uses Porter’s Five forces to analyze the external factors that affected its business, especially during the Covid-19 period. Many factors tried to hinder the thriving of the global medical supply despite the World Health Organization’s urge that essential services should not be barred from operating.
- Threats of New Entrants
According to Pitt, Lord Ferguson & Berthon (2018), ResMed faces threats from new firms like GE Digital and Avinger, which have skyrocketed in the US market and globally since GE digital also provides the same line of products. With no market entry restrictions, other firms can create much competition through price reduction and differentiated products that suit customer preferences.
- Bargaining Power of Suppliers
The bargaining power of suppliers of ResMed is meager since they have to manufacture raw materials following its decisions. This is an integral part of the production since critical human health is involved, and in case of disagreements, they risk being replaced and sued at any given time.
- Bargaining power of Consumers
Consumers have a high bargaining power since health is always a priority; hence price sensitivity could be a significant setback for ResMed if it needed to penetrate the world market during the Covid-19 period. The main reason is that the pandemic hit the world economy so hard that governments and agencies had to get involved at all costs.
- Industry rivalry
ResMed faced much pressure from related companies that produced ventilators, which has always put it on its toes to perform and create better products that are health conscious and beneficial to the world population.
Internal Analysis
Value Chain Analysis
It impacts the activities related to ResMed, which could yield a competitive advantage, significantly to help it pivot during the coronavirus pandemic. It also creates barriers to new entrants and causes cost disadvantages to its rivals. ResMed also uses VCA to identify complex inter-relationships and interdependencies, and in this way, it can scrutinize both internal and external linkages among activities. Despite people’s travel restrictions, could it use the VCA to analyze the improved flow of materials, information, and finances during the pandemic period? The Covid-19 period enabled the company to identify and exploit new opportunities and markets in all parts of the world due to its supply demands. According to Lin, Tsai, Wu & Kiang (2012), the VCA helped the company analyze the inbound logistics by developing solid relationships with their suppliers to receive, store and distribute their products worldwide.
Regarding operations, ResMed processes raw materials into end products and launches them into the market as required by nations across the world with the existence of corona. It, therefore, helped to maximize the efficiency and competitive success of ResMed, which generally improve profitability and competitive advantage, making it one of the best medical suppliers for chronic severe conditions globally (Ryan, Buciuni, Giblin & Andersson, 2022). The pandemic made it possible for ResMed to advertise and market its products worldwide with large sales making it possible to conduct business even during the pandemic. Its procurement and technological process quickly respond to the changing environment, giving it a competitive advantage and higher economies of scale.
Main resources and Capabilities
ResMed is in a great position to procure unique and valuable inputs that its rivals cannot easily find and develop cost drivers such as timings and interrelationships to develop uniqueness. Its primary resources and capabilities will be to create high-quality inputs to offer high-quality products and have effective handling procedures to reduce damage (Antras & Chor, 2021). ResMed has improved product appearance, comprehensive product ranges, and enhanced customer satisfaction, making customers trust it due to low defect rates. Its outbound logistics include timely product delivery and flexible delivery capabilities. At the same time, it has also had perfect relationships with suppliers and customers, providing high-quality technical assistance and maintenance services worldwide (Gao & Ren, 2020). ResMed has had heights in technological advancements, although the pandemic period and its firm infrastructure and flexible procurement process have made it pivot through the Covid-19 period.
VRIO Analysis
According to Khoo & Lantos (2020), this strategic tool assesses and evaluates ResMed resources and its strategic advantages and competitiveness based on the VCA. The valuable competencies that make ResMed ahead of its competitors and neutralize threats include an excellent brand image that is unique and has high brand integrity worldwide. It also has a great relationship with suppliers, which is valued globally, and its ability to innovate and develop great ideas in the healthcare system makes it a great brand. The rare part illustrates ResMed’s rare competencies that only a few firms in the healthcare industry can manage to cope with (Lin, Tsai, Wu & Kiang, 2012). ResMed has an international presence, excellent problem-solving skills, and has taken risks even during the Covid-19 period to provide healthcare to people globally. Its adaptability rate is so high that its global operations have increased with faster penetration and greater visibility. In terms of inimitability, ResMed has a quality product offering, competitive pricing, and a more significant customer experience. For example, the provision of ventilators was able to rescue the lives of millions in the world. In terms of organization, ResMed has the more significant financial strength, technological advancement, and employee training and has invested much in training and development.
Strategic Evaluations and Recommendations
ResMed’s primary strategy is to change the lives of 250 million globally by 2025. The health systems revenues have thoroughly declined due to the Covid-19 pandemic. Many countries have imposed restrictions and lockdowns, leading to a small workforce to facilitate logistics and production in many economies (Farre et al., 2019). Therefore, the current overall strategy of ResMed is that they have developed a unique product design, name, and futures that are exclusive in the market. This includes the pricing, distribution, and promotion of its products worldwide. It will also be possible to conduct a customer analysis to determine what they prefer regarding quality and the measurable options available (Gao & Ren, 2020). The company has tried to develop and create quality medical products rated positively by many countries worldwide. It has been immensely profitable in its medical supply business.
Based on the overall analysis, ResMed has succeeded in achieving this strategy by developing a concrete marketing mix where its product development and pricing suit the needs of its potential clients worldwide. It has also developed a convenient distribution plan, and its selection of channels has been powered by consideration of product characteristics, market dynamics, and distribution strategies of competitors. ResMed is achieving this strategy since its promotion strategies, and customer analysis methods have also helped it to advance in the world market quickly, making it one of the best medical supply companies in the world (Bamber, Fernandez-Stark & Taglioni, 2020). My recommendation for Rio Tinto, based on my overall analysis and outline of the current strategic evaluation, is that it prioritizes the physical and emotional well-being of those around them and contributes to a better future for the people and the whole world. It should also diversify the portfolio of its numerous decade assets to holistically define safety as the core value of the company’s actions.
Conclusion
ResMed has explored all the critical competitive advantages it must exercise to be at the top of its medical supplies worldwide. Despite the Covid-19 era, it has struggled to maintain its trust and supply of medical equipment across many countries that need it, and this has been made possible through strategic analysis of the PESTE, Porter’s Five Forces Analysis, VCA, and the VRIO analysis to determine its place in the competitive market. It is very strategic to maintain high product quality and trust and customer loyalty as well as all stakeholders in a business to realize profitability.
References
Antras, P., & Chor, D. (2021). Global value chains.
Bamber, P., Fernandez-Stark, K., & Taglioni, D. (2020). Why global value chains remain essential for COVID-19 supplies. VoxEU. org, 20.
Cistulli, P. A., Armitstead, J., Pepin, J. L., Woehrle, H., Nunez, C. M., Benjafield, A., & Malhotra, A. (2019). Short-term CPAP adherence in obstructive sleep apnea: a big data analysis using real-world data. Sleep medicine, 59, 114.
Farré, R., Montserrat, J. M., Solana, G., Gozal, D., & Navajas, D. (2019). Easy-to-build and affordable continuous positive airway pressure CPAP device for adult patients in low-income countries. European Respiratory Journal, 53(5).
Gao, H., & Ren, M. (2020). Overreliance on China and dynamic balancing in the shift of global value chains in response to global pandemic COVID-19: an Australian and New Zealand perspective. Asian Business & Management, 19(3), 306-310.
Khoo, E. J., & Lantos, J. D. (2020). Lessons learned from the COVID‐19 pandemic. Acta Paediatrica (Oslo, Norway: 1992), 109(7), 1323.
Lin, C., Tsai, H. L., Wu, Y. J., & Kiang, M. (2012). A fuzzy quantitative VRIO‐based framework for evaluating organizational activities. Management Decision.
Pitt, L., Lord Ferguson, S., & Berthon, P. (2018). The transition from products to connected health: observations and avenues for future research. AMS Review, 8(3), 233-239.
Ryan, P., Buciuni, G., Giblin, M., & Andersson, U. (2022). Global value chain governance in the MNE: a dynamic hierarchy perspective. California Management Review, 64(2), 97-118.
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