Chapter Four

This chapter talks about evaluating Environmental Opportunity as neutralizing the threats identified in the previous post.

Neutralizing the threat to entry:

Patents!  By erecting barriers to entry on research and development of specific technologies you can have some degree of creating and exploiting economies of scale and use that specialty as a production focus.  There are also heavy government regulations and monitors preventing the approval of patents too quickly so any established patent would be an advantage.

Neutralizing the threat of rivalry:

Wright medical recently merged with Tornier, and acquired OrthoPro and Solana Industries.  By combining forces these organizations are creating a bigger player in the market and is more protected from the threat of rivalry.

Neutralizing the threat of substitutes:

Not much can be done in this area.  Patents can provide barriers to very specific technology but there still remain many substitutes to complete a general procedure.  Customers may be impressed with the new Hammertoe line that allows customers to heal more quickly, but if that product is not available at the time of the case then the surgeon will go with something that gets the job done.

Neutralizing the threat of suppliers:

Wright medical in recent years has invested a lot in its global supply chain initiative, a large part of it which includes development of a stronger supplier relationship to be able to ensure there are enough resources when needed.  Forecasting and demand planning with these suppliers is key to the chain of efficiency and cuts down on extraneous costs related to production.

Neutralizing the threat of buyers:

Reducing buyer uniqueness isn't really an option as medical devices are meant to be for specific procedures.  The threat can be more neutralized by expanding upon the customer experience to appeal more to buyers.  Services can be offered in lieu of buyer power.  Specialized technologies can be expanded to appeal to more customers.