Originally Published MX January/February 2004

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

A regular, systematic review of its operations strategy
will enable a company to improve competitiveness and efficiency in a changing business environment.

Lawrence I. Strauss

The medical technology industry is undergoing major structural change. Almost 300 acquisitions worth more than $16 billion have been concluded in the sector in the years 2001 and 2002 alone.¹ While medtech companies struggle to bring more new products to market faster, their margins are being squeezed by product-line aging and by managed healthcare. Moreover, FDA scrutiny has meanwhile increased, forcing companies to commit more resources to management of quality assurance and regulatory affairs.

Despite these significant industrywide developments, many companies have failed to review their operations strategies--even though the foundations upon which these strategies were built have shifted. A company that has not rethought an out-of-date operations strategy risks missing out on emerging opportunities and can be blindsided by competitors.