Mdcm,inc Case Study

Introduction:

MDCM,Inc is one of the largest medical device contract manufacturers, however they recently suffer financial loss. The purpose of this report is to illustrate some issues MDCM faces and then I will analyze the company’s strategies, and then find out the reason why these problems comes out and give some recommend solutions for them.

Key points of the case:

MDCM,INC. was one of the largest and most successful medical device contract manufacturers which produce highly customized equipment design relate to their customer’s needs. One of the important reasons for their early succeed was their relationship with customer, they tried to build customer loyalty by delivering quality assemblies on time. In the 1980s, MDCM face more severed competition, so they trying to predominate market share by made several acquisitions. Even though MDCM becomes the largest company in the industry, it actually become one of the reasons in later MDCM’s struggle. MCDM’s abnormal organization structure and disordered management system cannot keep pace with their rapid expansion. Thus, their margins are terrible, and their operations are inefficient. They always buy materials repeatedly and their subsidiaries always against each other, their coordination is also poor between manufacturing facilities.

In 2000, the new CEO of MDCM realized the problem and trying to reform. He made several attempts, and I will analyze these in next part. However, their struggle situation doesn’t turn around. The problems are actually obvious. Their legacy systems are chaotic and no standard form for email and no networking across subsidiaries, which are the main cause of information lag, and it’s absolutely a big issue for a company whose motto is about time. The current situation is quite rigorous, MDCM cannot develop with controllable cost because they underestimate the use of information technology and do not let IT participate much in their business.  

Strategies analysis:

In this part I will analyze MDCM’s strategies. Let’s see from the beginning. I actually very appreciate the ideas MDCM used, they had best facilities in the industry, and they tried to build stable customer relationship by delivering highly customized quality parts on time. So, their reputation was good, and their brand name would be valuable, also customer loyalty could save cost to find new customer every time. However, in the later year, their customer satisfaction is still good, but it cost too much to maintain their relationship because of their chaotic management system.

Let’s move to horizon 2000. McMullen trying to reform which is smart because he realized there are problems. He trying to centralize the power and reorganized all subsidiaries. But this move causes every subsidiary from different region use different customized platform and different legacy system in order to serve their customers located in its region better. Besides, McMullen tried to enhance the roles of marketing and sales, however I don’t think marketing and sales are the reasons MDCM struggling now according to Pat Perry’s word.