MediSys Case: Modular Option By Ian Anderson, Sarah Anderson, Linkun Li and Natalie Shaghafi

Road Map We will give you our recommendation We will analyze the markets for both the modular and non-modular options We will discuss the incongruent goals and factions We will allocate decision rights and provide monitoring, measuring and incentives

Recommendation Our recommendation is to prioritize the manufacturing of advanced, cutting edge technology over speed, which we understand you state is “the key” to our success. Through the analysis of the points listed in our road map, we plan to demonstrate why having better technology should take precedence over speedy releases.

Market Graphs Modular -Demand is inelastic and therefore the line is steep bc of lack of price sensitivity for a customized good...ie ppl will buy good at any price -MR is close to Demand line for 2 reasons High barriers to entry (FDA regs, copyright) Low product differentiation (bc of this we don’t have that much market power within that market) The further away MR gets from D, the more monopolistic you are and market power you have -MC is inelastic/steep bc it depends on the additional price per unit, so the total price will increase bc of total costs for technology/equipment Non-Modular -Demand is elastic bc as price increases, quantity demanded decreases therefore the line is not steep as it is not a customized good and there is price sensitivity...ppl will not buy the good at any price -MR is further from demand for 2 reasons High barriers to entry ( gov regs, copyright) Low product differentiation bc the technology is not all that advanced and there are other devices in the market that are similar -MC is more elastic/less steep bc each additional price per unit is not much more Oligopoly because of low product differentiation and high barriers to entry Modular- aimed at academic hospitals, military. IntensCare and Neonatil, day surgery. A large price change in our device will have little to none effect on the quantity demanded because buyers of customized goods are less price sensitive affecting demand. The benefit of having a modular device will allow customers to create a variety of clinical situations, specific to the patients. Also, the brand name for MediSys has a very well known reputation because the first two products were highly successful specialty pulmonary and renal monitoring systems. Marginal revenue is relatively close to the demand curve because there are some barriers to entry but low product differentiation. Marketing and sales would need to spend more time selling this option because it is customized. Developing this option would be more expensive because of the technology needed for the product. Marginal cost curve will be steeper or more inelastic because for one additional unit, the price would increase due to total costs. Non modular- aimed at rural community hospitals. The more options a buyer has, the more price sensitive they are. Without the modular, the company would lose market share and the whole company would look second-rate.

Factions Key problem is communication, trust, and prioritizing OBrien and his staff are trying to solve the internal space problem Jack is too focused on the details of the product Little focus on the impending launch Peter is looking for an external hire to replace himself from previous position Dispesh is taking too much time in India with a software contractor

Decision Rights You hold decision rights of what project to prioritize. Jack Fogel decision rights of deadline launch date. Whole group meet with Jack by appointment as well as individually. Making a common good: Jack’s time A private good: individual appointments with them Provide a way to diverse the sort of items into an order of importance. Nobody is focus the core of the products or the developments. Time: everyone needs more time. Missing the deadline due to unreasonable delays. And the less team synergy, so we need to re-establish the team synergy, then make the progress. Specific information:the plan for modular plan, the information about the technology. Also include money. Since we give decision rights to Jack Fogel. So his office hour become the private good and toll good. Private good should be Jack meet with every individual workers and toll good means Jack meet with the whole group.

Monitoring & Measuring You should meet with team during the first and last week of each month. Sit down with the employees to make sure everyone is aligned with meeting the extended deadline date. Needs to gather information from what each member in the team does. Jack- Monitors by scheduling individual meetings. Group meetings will force everyone to communicate together. Art- Measures by coming in monthly, sitting down with employees and communicating with them about target goals. Monitors by spot checks to observe progress on work, attends meetings.

Drivers/Incentives Drivers Incentives Jack: All pieces hit the floor by deadline, synchronization of team Valerie: Profit/Loss, getting product out on time Bret: Dates and quality Regulation (Karen): Making sure all products follow gov. Regulation Aaron Gerson: Creation of successful product Dipesh: Cheaper manufacturing by outsourcing to India Incentives Recognition of successful team management Recognition of successful product manufacturing/release High profit, low loss Promotions

Incentives