Running head: NEXUS CARDIAC PRODUCTS LTD CASE STUDY 1

Nexus Cardiac Products Ltd Case Study

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NEXUS CARDIAC PRODUCTS LTD CASE STUDY 2

Contents
Executive Summary..................................................................................................................................3
Identified issues........................................................................................................................................4
Short Term Issues................................................................................................................................4
Long term issue.....................................................................................................................................5
Main Issue..............................................................................................................................................7
Root Cause Analysis................................................................................................................................9
SWOT Analysis.......................................................................................................................................11
Alternatives and Options........................................................................................................................11
Partnering with Venture Capital Firm...............................................................................................12
Partnering with Global Health Care Manufacturing Firm...............................................................12
Recommendations..................................................................................................................................16
Implementation........................................................................................................................................18
Monitoring and Control measures........................................................................................................19
Conclusion...............................................................................................................................................20
References..............................................................................................................................................22
EXHIBIT and Appendix..........................................................................................................................23
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 3

Executive Summary

Nexus Cardiac Product Limited began at Wilkinson University as a small division

for biomedical engineering studies. A life-changing machine for the monitoring of

heartbeats was created by the three university professors in the department. The

university offered initial support, operating space, and a business contract during the

start-up process of the venture. The nexus was devoted to innovation and innovative

technologies, receiving an award for the use of nanotechnology and the development of

a new form of electricity. The nexus was able to shoot its sales collection from

$3,000,000 to $9,000,000 within one and a half years because of the big emphasis on

the development of the product. As a chief operating officer, Fadi Fakhoury was the one

responsible for the production of different goods at the nexus. The Pacemaker was

developed to treat a patient with a sluggish heart rate. The pacemaker was implanted

and operated by the external computer surgically.

The nexus is well below the worldwide consumer availability of surgical

instruments. When entering the market, the business faced some regulatory restrictions.

Owing to the sophistication of the product, highly qualified staff were required to test,

use, and even sell the product. The nexus had a total of 26 workers and was therefore

small on the market. While they made a profit of around 15 percent in the previous fiscal

year the nexus also needed financing for their expansion. Research and development

was the core sector nexus. If the company's 29 staff members, 10 were in charge of

research and production. The company wanted to scale up its production operation, so

it decided to outsource scale manufacturing as it was deemed inexpensive. The sales

staff was not competent and information technology was needed for the correct
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 4

functions of the buying and inventory functions of the organization. The nexus needed

tremendous resources to expand its services and development.

Identified issues

Short Term Issues

Nexus Cardiac Products Ltd is a small company that is experiencing many

challenges. The owners of the nexus company need to meet some of the demands to

make sure the smooth running of the company. Despite the nexus company being able

to produce high-quality goods in terms of technology, it is faced with many hindrances.

The product produced by the company is very complex and new to the market. The

pacemaker is the new product on the market with distinct features (Bayon565). The

feature of the pacemakers can be explained by the ordinary scientist or the salespeople,

but it required the specialists who were fully aware of the workings and components of

the pacemaker. This forced professors and senior research staff and biomedical

professors to work the extra job. They were supposed to work in the production of the

pacemaker but the situation demanded of them to come on the ground and explain the

technicalities involved in the pacemaker for its usage. Due to the incompetent sales

team, the nexus product limited could not perform well in sales. The sales team was to

be trained on the various aspect of the product for them to be able to explain, efficiently,

and effectively to the physicians and doctors to buy the product.

The physical distribution of the finished product of the nexus cardiac product was

major handled by the 3PL. The 3PL is a technological system that can maintain very

tight and strict documentation of the product and tracking of the protocols. The system
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 5

makes sure that there is no late delivery from the supplies. Hence there was smooth

production of the nexus cardiac products, with efficiency in supply to the company. The

nexus product limited did not enjoy the full benefits that come along with the 3PL

system since; there were a few incidents whereby the supplier delivered the product off

the schedule. This prohibited the smooth operations of the company. Through this

restrict system; some of the products from suppliers from supplier went missing,

rendering the system ineffective. Some of the products were delivered damaged. This

system needed a change to it, for the operations of the company. The company has to

act quickly incorrect the damages since the materials were very expensive and total

care was to be demanded and implemented for an effective supply system.

*Urgency is very high and of the utmost importance. These short term issues has

to be dealt with 2 weeks of time from now.

Long term issue

Since the nexus cardiac product limited was in the business of production of

medical equipment, it faced a long term problem. The regulation in various countries

demanded the testing of every medical tool before it was declared safe for use. The

more the product was complicated the more it required the highly specialist for the

testing, production, and usage of the same. The nexus cardiac product limited, they

produced complicated products to the market. The pacemaker was surgically implanted

in the patient and then programmed. The external computer program was able to detect

the whereabouts of the patient’s heart. The slow irregular heartbeat was treated by the

pacemaker while the first irregular heartbeat was treated by the defibrillator (Monczka

39). The subcutaneous diagnostic monitoring system was developed to diagnose and
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 6

monitor the heartbeats. All the products produced by the nexus cardiac product limited

required qualified and competent specialists to operate.

The medicinal items are subject to lengthy bureaucratic procedures. There was a

wide range of restrictions on the nexus cardiac substance in Canada and North America

since the drugs were made to be of high concern to humans. Until being released to the

public, the items were subjected to some examination. This extended the product's

development period. In exchange, the total manufacturing scale had to be reduced,

allowing the business to run ineffectively. The organization wanted the cardiac product

to be manufactured and distributed smoothly and rapidly for its sustainability. This was a

long term issue that the nexus cardiac product limited had to face now and then

whenever there was an invention of the new product. Since also the nexus products

were rendered risky, they had to be tested now and then before being allowed for sale.

The stringent testing and high amount of regulations on the nexus products affected the

company negatively in venturing to new products and sales of the product.

The nexus cardiac company was majorly a product-focused. Many regulations

were put in place in various countries like Canada and the US, to reinforce the systems

that were for health and wellness improvement. This reinforcement was not product-

based, but instead, they were more concerned about how the quality of care to the

patients improves. These regulations affected the nexus cardiac limited negatively, in

that they had to change all of their systems to something else that they were not able to

manage. The whole of the nexus limited was like being forced out of the market, for not

changing the system of the health services and product they researched on and

produced.
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 7

The market was cost-conscious; the health manager started to put more

consideration into the inventory management issues. The nexus had to put all of its

things in order, in ensuring the well ran and managed company resources. The

manager of the nexus cardiac company (Fakhoury), reached out to the other company

for the production of inner parts of the pacemaker, but none was capable of producing

the pacemaker at the required affordable price. The small company that was able to

produce the required standard of a pacemaker was not able to meet the timeline

outlined by the nexus cardiac company. The delays had to be countered immediately,

which demanded the expansion of the cleanroom and more engineers for the work. A

high amount of cash had to be invested in this expansion to take place.

*The urgency to address these should be addressed in 12 months.

Main Issue

Each business had to have strong fiscal investments to compete in the market.

Any company with less financial muscle was not able to survive on the market, because

of the competition that is always on the market. Many regulations are involved when it

comes to the manufacturing of medical equipment, and hence more funds need to be

invested in, as suggested by Hugos. the health sector is always evolving from season to

season, the research programs of the company required high investments for its

running. The nexus cardiac company was mainly faced with financial issues. The nexus

cardiac company produced complicated products that required, competent and qualified

expertise to handle the selling and production of the same products. This demanded the

hiring of engineers of a higher caliber and technicians that we're able to comprehend
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 8

the usage of the product and manufacturing. This required the company to have a lot of

finance to be able to manage its affair effectively.

For the nexus to meet its cost demands effectively, they needed to manufacture

their products on a large scale production. Large scale production of the pacemaker,

defibrillators, and subcutaneous diagnostic monitoring system, by the nexus cardiac

limited, required significant capital investment to the company. The nexus was not able

to meet the financial demand for the large production of it is products, hence remain

small. The big company with huge financial investments were able, to take over the

market in term of research and other aspects of running a company. Due to financial

constraints, the nexus cardiac limited was not able to implement the necessary

information technology for their operation. The implementation of the scalable enterprise

resource planning system (ERP) was rendered impossible. This was because the

company was not financially stable and ready to cater to the expenses that come along

with the implementation of the system.

The required staffs for the implementation of various technologies at nexus

limited were not present. The information and technology staffs for the implementation

of the enterprise resource planning system were, not hired the reason being that the

cash flow of the nexus cardiac company, was not allowed. Due to the high cost in the

health sector, there was significant pressure on the manager of various health

departments, to find less invasive techniques in the production of the health products.

The company had to create products that enjoyed the economy of scale and the

products devices that were more reliable. The nexus encountered the challenges, as all
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 9

of it is products did not enjoy the economy of scale, hence they were spending more on

production, thus they could not compete effectively on the market stock.

Internal and External environments that influence the issues are as follows:

Internal

A combination of unanticipated product success, limited manufacturing

outsourcing options, lack of technical and medical expertise for the sales staff and

limited cash flow/ resources.

External

Cost conscious environment

Increased regulations and licenses

Immediate issue

Nexus Cardiac doesn’t have a strategic operating plan to move the company to

its next phase as well as the tight product focus on the pacemaker are the main issues.

Root Cause Analysis

The main cause of the nexus stagnant growth was the lack of adequate capital

investment. From the production of the pacemaker, a huge investment was needed.

The nexus cardiac company required expansion, for it to be able to cater effectively for

its operations. They needed to research more so that they can come up with the new

diversified products that were competitive on market. The capital had to be invested

heavily in the expansion of the cleanroom for large scale production of the cardiac
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 10

products. Since the health sector was on the evolving path, nexus cardiac limited

required the investment in information technology. The investments in technology would

have enabled the smooth running of the company affairs. The supply control system

was not implemented due to the lack of funds, hence resulting in the company,

receiving the delayed goods and to some extent, the company received the damaged

goods.

The major root cause for the stagnation of the nexus cardiac limited was the lack

of competent staff. Despite the nexus cardiac company producing fascinating products

to the market, they lacked a competent sales team (Mangan 128). The products

produced by the company were complex, and that, they demanded the qualified

specialist to explain all the technicalities involved with their products to the physicians.

This forced the professors and engineers that were responsible for the production of the

product to multi-task in promoting the product. This rendered the company growth

stagnant. The management also lacks sales skills, hence they were more focused on

the production of the product than the sale of the product. Ineffective management

hindered the growth and expansion of the company.

The many regulations imposed by the government caused a low production rate

of the nexus products. The stringent and regulation testing procedure of the medical

equipment’s prolonged production time. This was ineffective in that the company had to

invest a lot of cash in their product, but would wait for a long time for them to realize the

profits or loss for their products. Prolonged revenue from the sale of the product,

hindered further ventures of the company and thus stagnant.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 11

SWOT Analysis

Strength
Highly respected company with an
innovative product – Pacemaker
Strong staff in R&D
Strong financial support
High quality of the product
Sales of the pacemaker went up this year
(Profitability)
Weakness
No clear strategy
Lack of Supply chain strategy
Manufacture only one product
Sales team Lack technical knowledge

Opportunity
Growth in the market for rhythm
management devices
Increase market share by hiring more
sales people
Patent rhythm management devices
Threat
Cost conscious environment
Increasing Regulations and licenses
Competitors in the current market
Offshore production of devices by
competitors

Lack of clear strategy on what the company need to do to take it through its next growth

phase. And the company tightly focused (Stick to your knitting strategy) on one product

the Pacemaker, limited manufacturing capacity, poor demand planning and limited

technical expertise of the sales team has resulted the company to be in this current

situation.

Alternatives and Options

For the nexus cardiac limited to grow successfully, they needed a significant

change in its operations. They required an increased incompetent staff for their

operations, they needed a lot of finance for their production, and they also needed

improved information technology for the smooth running of the business. The nexus
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 12

cardiac company had two alternatives: either to partner with a venture capital firm or to

partner with global health care manufacturing firm.

Partnering with Venture Capital Firm

When the nexus cardiac limited partners with the venture capital firm, they will be

sure of the huge capital investment for their production. The huge capital will enable the

company to hire more qualified sales staff (Sodeyf 148). This promotes the sales of the

company hence expand. The huge capital will also enable the nexus cardiac company

to venture more into research, to improve, and come –up with new technological

medical equipment. The information technology system plus the information technology

system personnel will be boosted. Hence the supply and other operations of the

company will be handled smoothly. The production will be continuing despite the

prolonged regulation and strict rules by the Canadian government and the other country

on the medical equipment. The company can be able to diversify its productions, sales,

and other operation and hence growth. The only problem that nexus may experience is

that they may enjoy a small profit on the product produced since the venture capital will

claim its investment benefits.

Partnering with Global Health Care Manufacturing Firm

The nexus cardiac product limited is a competitor to the global health

manufacturing firm. When they partner, the production of high-quality products of the

nexus may be promoted. There will be sharing of the resources and materials needed

for the production of the various product, and hence smooth running. The only problem

that may be encountered by the nexus is, that their competitor may decide to scrap off

their product thus killing the company.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 13

Opt: 1 Partner with a larger company to take over Sales and Distribution

Nexus Cardiac is a medical device manufacturing firm who’s has expertise in

innovative design development and manufacturing. Currently company’s sales is work

in progress. Sales team does not have the medical expertise or technical knowledge to

talk intelligently with physicians about the product. Sales team did the leg work in selling

the Pacemaker, but they relied heavily on the “big guns” (the biomedical professors and

the senior research staff) to get into the technical discussions with the healthcare

decision makers.

Distribution of the finished products was handled by a 3PL chosen for their ability

to maintain strict tracking protocols and documentation. There are few issues with the

distribution firm, where products went missing and late delivery. Further, delivering the

damaged product to the customer.

Advantages

 Challenging and rewarding.

 Will be able to develop innovative products.

 Focus on product design and not to worry about providing assistance for the

sales.

 Better product sales (sales staff with better knowledge and technical info)

 Focus on manufacturing to reduce lead time.

 Improved product tracking and documentation (Supply chain visibility)

 Improved on time delivery/accurate product delivery

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 14

 Financial growth for the company and stakeholders

Disadvantages

 Employees in the sales department could lose their jobs

 Risks in partnering with company

Opt 2: Nexus to remain a small technology development firm

The core engine of nexus is the technology development. New Innovative design

of the Pacemaker by nexus had won several research and developmental awards.

These awards had attracted the attention of several provincial health authorities

and this had helped sales to gain traction. Company started to broaden its product focus

by developing and patenting several new technologies that would provide breakthrough

changes in delivery of care to patients who require assistance with cardiac rhythm

management devices.Sharp growth in annual revenue from the sales of pacemaker

rose up from $3M to $9M.

Advantages

 Have full control over product design and patents.

 Could continue develop new innovative products.

 R&D can fully focus on product development.

 Innovative product will be still in the market for people in need.

 Tight focus on the product design

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 15

Disadvantages

 Employees working in manufacturing will be losing their jobs.

 Affects the company brand reputation

 Not nearly as lucrative or rewarding

 Sales department will lose jobs

Opt 3: Sell out to a large competitor

The third option for the company is to sell it out to a large competitor. A global

health care manufacturing firm recently made an offer to purchase Nexus.

Advantages

 Conceivably a rewarding endeavor for the partners and venture capitalists

involved.

 No longer have to decide on next phase for growth

 No longer have to worry about the financial side (arranging funds, grants or

incentives)

Disadvantages

 Competitor could get rid of the product design (Killing the product) leaving all

hard work to waste.

 Employees could lose their jobs/ layoff.

 Offshore production opportunities may lead the company to shut down as the

bigger companies have offshore manufacturing facilities.

 Innovative product might not reach the market.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 16

Decision criteria

The following options will be ranked and graded out of a possible 10 points in 5

key areas. This will form the recommendation for the selection process. All the 5 areas

are weighted equally.

Criteria Option1 Option2 Option3

Increase in sale and market 10 5 2

share
Ease of implementation 7 6 5
Cost 9 5 2
Strategic fit 8 6 3
Corporate mission/strategy 8 6 4
Total 42 28 16

Based on these criteria the strategic fit, Increase in revenue for the company,

corporate strategy and the cost, partnering with a larger company to take over sale over

sale and distribution scores the highest among the 3 options.

Recommendations

It is highly recommended that the nexus cardiac product limited should accept

the offer from the venture capital firm. Since the venture capital firm has a huge amount

of finance, and they are willing to invest in the nexus cardiac product company, it will be

more profitable to both companies. The nexus cardiac product company needs

expansion in its entire business sector. The hiring of qualified staff in the sales

department will be made easy because the financial resources will be present. The

implementation of the scalable enterprise resource planning system (ERP) for the
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 17

smooth running of the business will be possible with financial aid from the venture

capital firm.

Nexus cardiac product ltd Worldwide market

The market for all $240 billion per year

cardiovascular surgical

devices
Annual revenue $ 9,000,000 $21 billion per year

The comparison of the $21 billion/$9,000,000 =2333.33

revenue with the world

market.

The nexus cardiac product company is 2333.3 times below the market order

when it chooses to produce its cardiovascular rhythm management device with all of its

revenues. This is a clear indication that the company needs a financial back-up for

survival.

Implementation

The expansion of the nexus cardiac company does not end at the

recommendation stage, but it needs an implementation process that is viable and

authentic for surety of success. After the nexus have negotiated effectively with the

venture capital firm, it is a good idea for the management to come up with the possible

area to strengthen or the areas that need a boost.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 18

Hiring competent sales personnel will form the first phase of implementation. The sales

team has to be able to explain all the technicalities involved in using the new

pacemaker, which is responsible for the irregular heartbeat. The sales team has to be

trained and fully equipped with cardiac products. This helps the company to generate

increased cash flow, hence the growth of the company. The next step will be embracing

information technology. The information technology system is needed for the

coordination of supply and demand of the cardiac products. . Implementation of a

supply chain management system has to be implemented together with the hiring of

more information technology staff. This ensures that the company does not receive

delayed supply or damaged goods.

The third face is the implementation of expansion on research. With the

expansion of the company premises, a larger cleanroom will be created and hence

larger-scale production of the cardiac products for the company. With increased

production and improvement in technology, the nexus cardiac product limited can

compete in the worldwide market. China which is experiencing the advancement in

technology is witnessing the development and thus with the implementation of the

expansion of production, the nexus will be placed on a global market for the production

and sale of medical equipment. The engineers for the creation of the cardiac products

will be conveniently be hired for meeting the large production of the products.

Monitoring and Control measures

Goals Metrics Measures

Sales team Increased The amount of Sale team to equipped fully

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 19

performance sales of the cash flow with nexus cardiac product

pacemaker, received. information

defibrillator and

Subcutaneous

diagnostic

monitoring

systems

The impact of supply chain The efficiency of Management of the inventory.

the management the supply

implementatio module, to process

n of improve

information purchasing and

technology inventory

control

functions

Focus on New cardiac The rate at which Incorporation of the new

research and equipment we diversify our technology in helping discover

development production and come up with the new

design of the products.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 20

Conclusion
The nexus cardiac product company produces fascinating products that are well

marching to the needs of the market. The North American people who experience the

problem with the hearth require the invention like the use of the pacemaker, to help

them solve the hearth's rhythmic malfunctions. The worldwide market is in order of $240

billion surgical devices produced. The company with improved technology, they are

advancing the production of medical equipment. There is a lot of competition in the

market for companies that produce medical equipment. It is very hard for companies to

enter the market because there are many regulations and strict conditions that have to

be followed. The long procedures prolong the production of the product to the market,

hence causing inconvenience for some companies. The nexus despite improving its

product, cannot compete on the worldwide market.

The financial hindrances that are experienced by the nexus cardiac product are

limited, as the major contributing factor for its stagnant growth. The company needs

funding for its advancement in research and development. The sale of the pacemaker

requires qualified specialists to explain the technicalities involved in the potential buyer,

because of its complexity. Due to lack of finance, the nexus cannot implement the

supply chain module. Hence the company is inconvenienced when it comes to dealing

with purchasing and inventory functions. Nexus Company partnering with a financial aid

organization will improve and expand on the market place.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 21

References

Bayon, Yves, et al. "Turning regenerative medicine breakthrough ideas and innovations

into commercial products." Tissue Engineering Part B: Reviews 21.6 (2015): 560-

571.

Hugos, Michael H. Essentials of supply chain management. John Wiley & Sons, 2018.

Mangan, John, Chandra Lalwani, and Chandra L. Lalwani. Global logistics and supply

chain management. John Wiley & Sons, 2016.

Monczka, Robert M., et al. Purchasing and supply chain management. Cengage

Learning, 2015.
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 22

Sodeyfi, Setareh. "Review of literature on the nexus of financial leverage, product

quality, & business conditions." International Journal of Economic

Perspectives 10.2 (2016): 146-150.

EXHIBIT and Appendix

The implementation timeline for 12 months

1 2 3 4 5 6 7 8 9 10 11 12

MONTHS
The hiring of the new

qualified sales

personnel
Implementation of the

supply chain

management
NEXUS CARDIAC PRODUCTS LTD CASE STUDY 23

system
Research and

development

Nexus Staffing

Title Number

Management & Administration 3

Manufacturing, Packaging, and Shipping 6

Research & Development 10

Human Resources 1

Accounting and Finance 2

Information Technology 2

Supply Chain Management 2