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Strategic Plan Part 2: SWOTT Analysis PaperCasey SchaulBUS/47512/19/2016Elaine BoyleStrategic Plan Part 2: SWOTT Analysis StrengthWeaknessOpportunityThreatTrendLegal and regulatoryThe FDA advisory committee voting will show a major shift in the regulatory environment. There are no current standards for use of CGMs to make treatment decisions. This requires that new performance standards be written for the final regulatory clearance. (Cahill, 2016)There will be a need to develop new educational materials for endocrinologists, diabetic educators, and also regular practitioners; Dexcom will need to be very involved in both. (Cahill, 2016) Major competitor Medtronic may also be involved and compete against Dexcom in developing performance standards and also in creating new competitive educational materialsOnce FDA approval for CGM to make treatment decisions, it will allow more insurance companies such as Medicare to prescribe. GlobalLast April, Dexcom acquired its European distributor of six years, Nintamed, possibly giving it enhanced infrastructure to grow foreign sales. (Cahill, 2016)The cost of Nintamed, may cause risk to the organization as it was a high cost acquisition. By being able to expand globally into Europe, this may give Dexcom a lead in the global market. There are also plans to expand Dexcom into Asian markets as well. The new CGM Watch by Dexcom will create more demand globally. (Global Continuous Glucose Monitoring System Market 2016-2022, 2016)CGM is new into the foreign markets and will require knowledge of extended restrictions and requirements for each country. Both Medtronic and Dexcom are the two major players to bring CGM to foreign markets. EconomicThe Economic forecast for Dexcom looks good into 2017. According to Forbes, “Consumer spending will follow the overall economy in 2016, not lead it..” (Conerly, 2015)The consumer spending increase is just under four percent per year, just above disposable income. Without many insurance covering Dexcom, it may affect sales. If Medicare coverage goes into effect, other insurance companies may follow which would decrease consumer spending with better insurance benefits to cover. If the economy does not improve further, and insurance coverage does not expand, sales may be reduced. The trend is that the economy is improving and also insurance coverage is expanding. Both will help Dexcom and its new products even in a slow economic growth market. TechnologicalAccording to Dexcom’s CEO, Kevin Sayer, “Sayer notes that there are still many opportunities for innovation-driven growth in the CGM arena.” Dexcom will be developing even better sensors with a smaller on-body profile with the GlucoWatch. There will be more connectivity as well. (Thompson, 2016)Dexcom may not develop these new products as fast as the competitive brands and may lose marketshare if Medtronic improves its technology with CGM products first. The GlucoWatch that will be created by Dexcom will be a market leader in technological innovations. Dexcom is also playing a part with it’s CGM and the closed loop pancreas experiment. Other competitors such as Medtronic will also be developing better technology and CGM competing products.Technology advances such as improved accuracy, smaller sensors, and more demand from Diabetics wanting this technology, creates a huge opportunity for Dexcom. InnovationDexcom was recognized as Forbes Most Innovative Companies and ranked #4. Dexcom also won two other awards, as one other product was honored in the Emerging Technology category. Dexcom was recognized among other innovative digital health products, for their "outstanding achievement in technology innovation aimed at improving overall health outcomes." Dexcom was recognized as one of the top 10 innovative products at CES by the Tech Podcast Network. (Investor.Shareholder.com, 2016)Highly recognized as an innovative company, the organization must not let the titles and awards slow its progress in developing new innovative products. The high exposure and also being a leader in innovation will allow the company to develop more innovative products and stay ahead of the competition if it continues along the same path. Other companies especially in the health care realm want to take Dexcom’s market share and may beat Dexcom to the market with other innovative products. The CGM space is competitive and innovative products that compete with Dexcom are on the rise. SocialDexcom’s core value is to inspire confidence within our community and in one another.Dexcom can do better by being more in the local markets educating diabetics. Dexcom can do better by utilizing educational seminars to diabetes clinics and hospitals. It has not done this yet.The competitors may provide these educational resources first and compete against Dexcom. There is a need for more education around CGM and Dexcom is well positioned to serve in this space. EnvironmentalDexcom is environmentally friendly. It goes all the way down to the way each department recycles and cares about taking care of the environment. The company is trying to do more with eliminating wastes in production. The company is getting certified in Six-Sigma which will eliminate waste in production and in other divisions. Waste makes the production of goods more expensive so it will benefit the organization if it can do this. Leaner organizations are better producers and also better for the environment. Competitive analysisDexcom is the current leader in CGM with Medtronic as a close second. Medtronic is better known in the industry and may gain competitive advantage if Dexcom is not careful. If Dexcom stays the leader in CGM, it will remain more accurate, more innovative, with more appeal to the masses. It is a highly competitive industry with lots of players coming to market to compete. There are more coming into the market but only two major players currently. StrategySteve Pacelli is Dexcom's Executive VP of Strategy and Corporate Development. Dexcom’s new strategy is its new algorithm that "reduces some of the noise interference" in how the system communicates glucose sensor data.The new algorithm doesn’t change the device but allows it to be a bit more accurate. Dexcom is currently the most accurate CGM on the market. This new algorithm will continue to keep it ahead of any competitive products. No threat in this – having a better and more accurate product through a better algorithm only helps Dexcom. Improving CGM accuracy is a trend that both competitors are striving for. StructuresDexcom has good department structure and also a lot of experience. In some departments, there are more turnovers which allow other competitors to take Dexcom’s knowledge. By developing more stability and structure within departments it will strengthen the organization. If competitors take knowledge from Dexcom because of loss of employees and lack of structure, it might make Dexcom more susceptible to competition getting ahead. By strengthening each department, there will be more commitment from each employee. Processes and systemsDexcom has tried and true processes and systems which casuses growth within each deparment. Dexcom has not been good at assimilating new processes and tools to each department through preparation and training. If Dexcom learns to prepare their teams better, they may be able to bring better technology and advancements to the teams faster and with better assimilation. If other competitors learn to do this better and faster than Dexcom, than the competitors may have better tools and faster. Improving processes and systems is a recurring trend amongst organizations. ResourcesDexcom has many talented resources to help develop the next phases of CGM. Good talent is expensive to come by and to also keep on staff.Because of Dexcom’s reputation, many desirable and experiencedIf the talented resources leave, then Dexcom may lose valuable employees. Talented resources are scarce but for the right companies can be available. GoalsDexcom’s goal is to be the number one CGM provider in the market. Medtronic’s goal is also to be and is a close competitor. Dexcom may be able to stay ahead of Medtronic with it’s technology and innovative products. Competition may take competitive advantage if accuracy and products improve. There is much competition in the CGM market and goals are important to meet to stay ahead of competition. Strategic capabilitiesDexcom has a very talented strategic team and use their skills to plan and continue to improve Dexcom’s products. Lack of planning and identifying challenges in production could warrant competitor advancing. With proper strategy and planning, Dexcom will remain the CGM leader in both US and globally. Without proper strategy, a corporation can fall short and let completion get ahead. An organization must have a good strategic planning committee to get ahead. Most companies in this market do. CultureDexcom’s culture is close knit and passionate about helping diabetics and improving the organization. Dexcom could improve this by having more inter – department functions to get to know each other and work better together. If each department worked better together there would be less inter-department conflict such as the managed care team disagreeing with the sales team as an example. If company department do not work efficiently together, then the company will be less effective in processing sales orders or being efficient. Most companies are learning how to be more efficient in there processes and procedure and having a good culture helps with this. TechnologiesDexcom is improving its technologies to better produce its products. The latest is a state of the art manufacturing plant. Dexcom officials announced plans to build a new factory in Arizona, adding 500 employees during 2017 to expand manufacturing capacity. (Cahill, 2016)Expanding to a new costly facility and hiring that many employees may impact Dexcom’s overhead. If this new production facility produces better quality product at a lower cost, this technology will help Dexcom eliminate production cost and increase production. This risk may have a cost, especially if the new plant is not working or does not manufacture the same quality products. Many medical device manufacturers are looking for ways to improve production at a lower cost. InnovationsDexcom is looking to be innovative with its product development, especially the GlucoWatch. Sometimes innovative products do not have the demand of the market and fail and can be costly. If the proper marketing research is done, combined with innovation, the right products will be brought to market and the demand will be there. If innovative products are developed but the demand of the market is not there, the company will not be able to sell the products. Innovation is the key to developing new products that will be welcomed by the market. Intellectual propertyAccording to Dexcom, “Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patent, copyright and other intellectual property laws, trade secrets, nondisclosure agreements and other measures to protect our proprietary rights. As of February 3, 2009, we had obtained 23 issued U.S. patents, and had 163 additional U.S. patent applications pending.” The challenge is that it takes five years or more for pending patents to become finalized. To expand into foreign markets, Dexcom has as of February 3, 2009, fourteen international applications filed under the Patent Cooperation Treaty, with 2 European patents granted, and over twenty two European patent applications pending. There is over ten Japanese patents pending, over seven registered U.S. trademarks, and seven pending U.S. trademarks, and 4 registered European trademarks, three pending European trademark applications, and three registered Japanese trademarks. (Dexcom Intellectual Property , 2009)The threat is that another company might take a pending patent or have one registered sooner. Many medical device manufacturers are racing to develop international patents and register their intellectual property. LeadershipDexcom has a very experienced and high level executive team that has led the organization to the success it has seen so far. There are not any gaps in this leadership team and only if an executive leaves, could there be a weakness here. The opportunity would be to continue to develop this team and draw upon their experience to make the organization and products even better. If a key player leaves and there is not a suitable replacement available quickly, it could leave that department open to challenges. Having a strong leadership team is critical for the success in any organization but especially one in this competitive market. ReferencesCahill, J. (2016, August 22). What’s on Dexcom’s Radar? Retrieved from Insulin Nation: http://insulinnation.com/treatment/whats-on-dexcoms-radar/Conerly, B. (2015, January 20). Economic Forecast 2016-2017 And Business To-Do Lists For The New Year. Retrieved from Forbes.Com: http://www.forbes.com/sites/billconerly/2015/11/20/economic-forecast-2016-2017-and-business-to-do-lists-for-the-new-year/#4ef4fb442ab8Dexcom Intellectual Property . (2009, March 5). Retrieved from DXCM » Topics » INTELLECTUAL PROPERTY: http://www.wikinvest.com/stock/DexCom_(DXCM)/Intellectual_PropertyDexcom's Innovative Diabetes Monitoring Device Recognized For Outstanding Achievement at Consumer Electronics Show (CES). (2014, January 13). Retrieved from Investor.Shareholder.com: http://investor.shareholder.com/dexcom/releasedetail.cfm?releaseid=819014Global Continuous Glucose Monitoring System Market 2016-2022 - Medtronic and Dexcom are the Only Major Players - Research and Markets . (2016, May 10). Retrieved from Businesswire.Com: http://www.businesswire.com/news/home/20160510005848/en/Global-Continuous-Glucose-Monitoring-System-Market-2016-2022Thompson, M. (2016, August 24). Taking Stock of CGM’s Future: A Conversation with DexCom CEO Kevin Sayer. Retrieved from Innovation In Medtech : https://www.innovationinmedtech.com/product/article-purchase-diabetes-devices-dexcom-sets-high-bar-growing-cgm-space-mary-thompson/
Solution: Strategic Plan Part 3: Balanced Scorecard and Communication Plan - Due Jan 9