RBS: Analysis of EMI and the CT Scanner Case By Group 16: Section B GMP 2011-12

The analysis comprises of answers to two questions. The first answer states the decision that should be taken by EMI in Case A. The second answer states the things that have changed in case B.

Hemanta Mondal G11081, Ravi Kumar G11101, Vivek Arora G11121 12/28/2011

EMI and CT Scanner [A] and [B]

Question 1: Based on the case, analyze the decision that EMI has to take at the end of Case (A) Analysis: EMI should go ahead with the plan to manufacture CT Scanners. Though EMI doesn t have full-fledged expertise to manufacture CT Scanners, it do have know how of manufacturing electronics and electrical equipments. EMI does manufacture medical equipments but, these are portable and small devices. EMI s capability to develop electronics equipments and medical devices can be taken to the next level by going into this business. They can go for strategic alliances with subcontractors (partners) to get most of the components manufactured outside and can integrate them into a functioning system. EMI has already developed expertise through its R&D department and they can augment this with few patents to gain sustainable competitive advantage. Though it will not come soon, but over 4-5 years they can be a formidable player in the market, if right focus is maintained. The intra organization co-ordination and synergy is required for success of this venture. All the departments need to support this and team in US which is going to drive the maximum sales volume is going to play the most important role. The socio-political environment also needs to be supportive for success of this new development. Powell s idea of establishing centres of excellence can lead to development of a strategic ecosystem which can be used to develop new products in area of medical diagnosis. The marketing strategy needs to be focussed and needs to be headed by Powell. This marketing strategy will help them develop complementary assets. Though a rough terrain waits for EMI in this field, but in long term this is going to big diversification strategy for EMI.

Question 2: How has the decision conditions changed after Case (B) Analysis: The most important requirement for success of the CT Scanner venture was supportive and stable internal and external environment. After going ahead with the venture there were 10-12 new entrants in this space which started putting indirect pressure on EMI on sales and eventually margins. The conservative slogan in hospital management was not appreciating of the fact that half a million of investment on CT scanner are really required. There was management team in US was not performing well and there were some firing done of people who mismanaged companies P&L. EMI s reputation was also getting hit because of the arrogance nature of its sales team towards medical profession. The team in US was feeling ignored as they were not included in most of the manufacturing decisions. Unreliable sales forecast and constantly changing design specifications had severely disrupted production schedule. The product design also didn t evolve with changing requirements. The patents didn t become that strategic tool as expected and were bit downer in EMI s scheme of things.