Coloplast Case Study
Issue 1: How can Coloplast be sustainable in the long term in such intense foreign competitive market without constant R&D for new products?
Strength and opportunity
Since Coloplast has strong branding (Strength) and they foresee opportunities in the emerging countries (Opportunities), recommend that they could leverage their capabilities to joint venture (JV) as a mode of entry with other companies in countries that are untapped such as China to increase market shares and exposure. Having a JV for Coloplast could help them to reduce capital investments and ability to have technology transfer to produce new products that require minimum R&D. …show more content…
However, there could be potential growth in the emerging countries like China where there are increasing growth of elderly and healthcare coverage (Opportunity).
Hence, Coloplast should grab the opportunities where they could focus on innovation on new products for early detection medical devices instead of producing current treatment care products such as ostomy bag.
Weakness of Coloplast In order to produce with new solutions, Coloplast need to have constant R&D for creating innovation products.
Opportunities Penetrate into emerging countries like China where there are growing population and healthcare coverage to increase sales.
Shareholder’s expectations will be positive. Shareholders would likely to invest in new innovation products that have substantial beneficial to end-consumers.
Risk The innovation projects may fail due to unable to meet the satisfaction needs for end-consumers. However the risk is acceptable, as Coloplast can perform a detailed medical research to improve on the new products to overcome the …show more content…
Weakness of Coloplast Coloplast’s raw materials was using unique and exotic which are more expensive.
Threat There is an increasing pressure for cheaper products.
Shareholder’s expectations will be positive. Coloplast can implement the backward integration by using pilot production in Global R&D to produce raw materials.
Risk There might be a strategic drift if Coloplast were to focus mainly on producing raw materials.
Financing of growth in R&D Coloplast has strong free cash flow and profits to support the R&D.
Resources – Financial and Global R&D Coloplast has the global R&D skills and strong financial statements to invest in developing their own materials.
In sub-conclusion, this recommendation of creating their own raw material supplies enable them to reduce the bargaining power of suppliers or even reduce supplies from suppliers. Coloplast is now in the shake-out stage of their life cycle. This recommendation is tapping on the CLS of conglomerate diversification which they could sell to other manufacturers and increase