1. By: Emily Grammer, Paul Roth, Marta Muncharaz, Mursaleen Ahmed
MediSys Corp Case
By: Emily Grammer, Paul Roth, Marta Muncharaz, Mursaleen Ahmed

2. Road Map: Recommendation
Higher producer surplus and margin in modular market
Best fits the culture of the company
Factions
II. Solutions to our problems
III. Conclusion
Recommendation
Arguments defending our recommendation
Higher producer surplus and margin in modular market
Best fits the innovative and entrepreneurial culture of the company (strategy statement)
Factions (we prefer dealing with … rather than ….)
III. Solutions to our problems
Increase communication
Reallocation of decision rights
Establish a common objective
IV. Conclusion

3. Recommendation … THE MODULAR DESIGN

4. Reason 1: Higher producer surplus and margin
Modular:
-- higher min AVC: higher costs to produce the modular product. Expensive labor cost,
-- Olygopoly:
Some barriers to entry in the market: brand identity, customer loyalty (the firm has already launched 2 popular products)
Some product differentiation: one of the first product in the market but there may be relatively close substitutes (other firms will offer the same product)
-- Inelastic Supply: a change in price of our costs will have NO significant changes in our quantity SUPPLIED. If the price of a special piece we needed to produce our good increased significantly, we would NOT be able to go buy anywhere/to the next store.
-- Inelastic Demand: customers are NOT price sensitive, a change in price will have a no change the quantity demanded by the customers. If our company were to increase the price of our devices, they will still buy it because is not like they can go next store buy another one (few products, few companies)
HIGH MARGIN LOW VOLUME STRATEGY!
Non modular:
→ Monopoly:
Minimal barriers to entry in the market (because we will have already launched the product)
High product differentiation: the first product in the market

5. Reason 2: Best fits the innovative and entrepreneurial culture of the company
Strategy: We will become the best medical device manufacturer by developing high technology and innovative products in a competitive time while preserving the innovative and entrepreneurial culture of our company.

6. Reason 3: Factions
Dealing with Bret O’Brien is a better option for you than dealing with potential problems from Valerie Merz
Merz
-- Merz feels like she has no authority and a lot of responsibilities
-- No one communicates to Merz
-- Merz is on the edge of leaving (quote last paragraph of case)
Obrien
-- O’Brien has the contact with all the engineers and producers
-- He has adverse interests to do the modular device and it could cause a huge problem if he decides not to collaborate
→ We prefer dealing with O'brien and his adverse interests because we believe that
We can convince him to collaborate by giving him incentives
We will give him more time to decrease the pressure he has with the time
We will show him the benefits that would come with the modular design
Higher producer surplus and margin in modular market

7. How are we going to solve these problems?
-Parallel system currently implemented is not working
-No communication and trust, conflict among workers
-Engineer problems in India (internal space problem for the product)
-Lack of time
→ Workers are not looking at the bigger picture. Workers are focused on doing the right thing for their own department instead of the company.
→ Lack of clear priorities within the company

8. Reallocate Decision Rights
Name
Decision Rights
Monitoring
Incentives
Valerie Merz
Marketing for IntensCare product
-Biweekly product check in
-Jack reports to you all the information you need
-Modular design (your preference)
-Annual raise
Bret O’Brien
Engineering
-GANTT Chart
-6 more months for the expanded project design
-All project workers in the US
-Jack will tell O’Brien the decision
Jack Fogel
Production Manager & Project Leader
-Biweekly check in with Art
-Recognition
-Completed project
-Bonus
Dipesh Mukerjee
Software Design
-Next project takes place in India
Karen Baio
Product Testing
-Design that helps more people

9. By reallocating decision rights we will:
Increase communication among workers
Establish a common objective
Increase the speed of the project
Implement the parallel system started

10. Conclusion
We believe that you should choose to produce the modular design
There’s a large producer surplus and high margin
This option best suits the culture of the company
Factions
By reallocating decision rights the main problems your company is facing will be solved.