A strategic management study for RG Meditron, Inc.

• Main Author: Garcia, Reynaldo C.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2157
• Institution: De La Salle University

This Strategic Management study was conducted at RG MEDITRON, INC. (RGMI). Its main office is located at LFG Bldg. #82 Panay Avenue, Quezon City. The company belongs to the HealthCare industry, specifically in the Medical Equipment & Devices Sector which is vital to the Physicians in the diagnosis and subsequent therapies of sick patients. RGMIs continuing long term goal of becoming a world-class corporation with international quality and excellence as its core competencies principally focus on continuous improvement and a framework that drives efficiency. This report aims to come up with a Department of Health (DOH), the Armed Forces of the Philippines (AFP) modernization plans and substantial investments of private hospitals in modern Medical Equipment & Devices. Using Michael Porters Five Forces Model, the environmental analysis indicates a high threat of entrant, an intense rivalry among its existing competitors, a low pressure from substitutes, a strong bargaining power of buyers and weak bargaining power of suppliers. Based on the environmental analysis, the opportunities and threats faced by the industry are identified. The value chain is the analytical tool used to identify the core competencies of the company. The competitive advantages are derived from the core competencies which will set the company apart from its competitors. To achieve and sustain over all cost leadership, Michael Porters concept of Cost Drivers was used to analyze the cost behavior of the company. Cost leadership requires an examination of every activity in a firm for opportunities to reduce cost and the consistent pursuit of all of them. Cost drivers are the structural determinants of the cost of an activity and differ in the extent to which a firm controls them. Cost drivers determine the behavior of costs within an activity, reflecting any linkages. In order to achieve cost leadership, management has to understand cost behavior in relation to the companys strategic plan. The achievement of superior performance that will set us apart from our competitors will only be in vain unless the price premium considerably exceeds the cost involved. Analysis of cost factors should be made from an over-all and linked view rather than on a per activity basis. Cost reduction in one activity is not enough gauge to claim cost leadership. On the other hand, an increase in cost in one activity can not be constructed as being a setback. The company should also be able to have a good assessment of the cost positions of the competitors in the industry. This is very essential step in ascertaining RGMIs standing among the various players in the field. An implementation plan for the proposed strategies is formulated using the 7-S Framework to achieve the objectives that have been set.