Assignment #2 - EMI and the CT Scanner Group C

1) What predictions can you make about the industry and competitive
developments as of 1972?

In 1972, EMI exhibited their CT scanner at the RSNA meeting. The CT scanner industry
had limited supply and unlimited customer interest. Some years later not only smaller companies
entered the market but also major electronics competitors. EMI was always confronted with the
fear of competitors taking away part of their market share, however, none of the new competitors
were able to offer immediate delivery. Because of the expertise developed by Hounsfield, the
protection from patents and high rates of the annual production of scanners EMI had a market
advantage over their competition. Competitors took a long time to finally bring their product on
the market. The market grew further and EMI undoubtedly was the industry leader. The US
market was very successful, which is why they created the Northbrook plant. EMI focused on
developing an integrated diversified medical electronics operation. By acquiring different
companies they tried to protect the company's leadership position. With further competitors
entering, the industry's capacity grew. Especially the US market looked very promising as more
than 65% of EMI’s scanners were sold in the US. Also, the American market has more resources
to purchase advanced medical equipment, which is why the outlook for CT scanners certainly
showed promise.

2) Should EMI enter this business? Why, why not?

Mostly, in America CT scanners looked promising because they are open to purchasing
and utilizing the latest innovations. EMI has a market advantage and first-mover advantage over
their competitors because they are holding patents and a research fund is established to develop
CT scanners. Also, all of the components to build scanners are existing in outside vendors. But
EMI is diversified very early to build scanners. Because they had no idea about the American
market. They should forecast the sales by looking at X-ray machines even though they cost
$100.000 but EMI targeting large and prestigious hospitals. EMI should produce CT scanners
because they have a strong reputation in the electronics field but they have a limited amount of
experience in the medical field. They should use a large portion of the R&D budget in this field.
Also, they divided into too many projects but dedicated a few of the projects. This kind of large
project needs deep focus and vision for the company. Also, moving the company into a new
market and segment requires strategic planning and needs the company’s vision in forwarding
times.EMI should enter this business by using outside vendors to produce scanners. Also not
diversifying the whole company for profit they need to focus on big projects with good strategic
planning and market analysis companies can gain huge opportunities in this market.

3)How would you implement your recommendation?

EMI should focus on getting the attention of the American market and how to sell their
products to them. Also, they should enter different hospitals than just big and prestigious ones.
They should establish a service team to the hospital in case there is any error or technical issues.
The company should provide technical help for the hospitals. They can use outside vendors to
manufacture the product. Because entering a new market segment requires huge experience and
knowledge they can get help from outside vendors to manufacturing processes. Since the market
is growing and they have a strong R&D team and first-mover advantage they should focus only
on this project and diversify the company on many projects. I would create a division in the
company for coordinating the subsystem and outside manufacturers and get a partnership with
prestigious hospitals for reference of my products so that this company can get more attention in
the market.