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Analysis of Given Imaging Company Environment and Industry

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Words: 1925 |

Pages: 4|

10 min read

Published: Apr 30, 2020

Words: 1925|Pages: 4|10 min read

Published: Apr 30, 2020

Table of contents

  1. Threat of New Entrants
  2. Product Availability and Quality
  3. Analysis of Current Situation - SWOT
  4. KPI - PESTLE
  5. Industry Analysis - Porter’s 5-Forces
  6. Financial Analysis
  7. Strategic Options
  8. Recommendations
  9. Conclusion

Overview Israeli based company; Gavriel Iddan founded Given Imaging in 1998. Given Imaging has put in massive amounts of research, work, and time into the development of their “camera pill”. Both doctors and patients use the PillCam as a way to collect images of the gastrointestinal tract. This is useful in situations such as viewing the small intestine to determine if a medical diagnosis is needed.

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In August of 2001 the PillCam became FDA approved, and by that following October, Given Imaging became a public company. Given Imaging was acquired first by Covidien, then by Medtronic, who bought them for about $49. 9 billion in 2015. This acquisition allowed more opportunity for growth in both research and market share. Given was expected to transform the gastrointestinal endoscopy market if they continued to get the PillCam approved in other countries. However, new entrants quickly emerged into the market, including: Olympus, Chongqing Jinshan Science & Technology, IntroMedic, and FujiFilm Holdings. Through Given Imaging’s marketing efforts, they were able to operate and distribute in a variety of countries. There are 75 countries total that distribute Given Imaging products, including: the United States, Germany, France, Australia, Brazil, Canada, Japan, Hong Kong, and Israel. Problem Statement Given Imaging has been faced with three major problems that have kept them from gaining a complete competitive advantage over other companies in their market share. Each of these issues is addressed below in how to go about the issue at hand.

Threat of New Entrants

The colonoscopy market has been changing and growing since 2005. While the medical technology industry is small, it is extremely competitive between price and quality. While Given Imaging has a good reputation amongst it’s consumers with their high quality and innovative products, they still struggle to keep up with certain aspects. Olympus developed a higher resolution imaging system than the PillCam and real time viewing. Through these advantages, both doctors and patients have liked the visibility and the immediacy that the PillCam has to offer. Another company that came into the market was Chongqing Jinshan Science & Technology. In 2015, they began producing capsule endoscopy products and PH monitoring systems, which grew to be sold in over 60 countries while also holding the position as the majority share market in China.

In 2012, IntroMedic created a product similar to Given Imaging’s PillCam that became FDA approved. IntroMedic’s product, known as the MicroCam, had revenues of $6. 69 billion in 2014 while Given Imaging ended the year in 2013 with $50 million in revenue before they were acquired by Covidien. FujiFilm Holdings, another top competitor, had early on advantages of film production. They were developing medical diagnostic equipment that Given Imaging could not keep up with. While it was easier for established companies to stand out among their competitors, keeping up with changing technological markets was something Given Imaging had to consider.

Product Availability and Quality

Given Imaging was successful in coming up with other products in addition to the PillCam. However, keeping up with the quality of their competitor’s products has been a problem. Not only did Given Imaging produce the PillCam, they also developed PillCam COLON. Since 14 million patients undergo a colonoscopy a year, the need for a more efficient screening strategy was essential. While PillCam COLON had great potential, Given Imaging failed to have the product produce quality imaging. For doctors, it is essential to see clean and clear pictures of the gastrointestinal tract.

Supplier and Buyer Relationship Given Imaging has been able to keep a positive relationship with their Israeli suppliers. However, other countries have been sticking with other suppliers they know and rely on. Given Imaging has been relying on their sole suppliers for imaging sensors and transmitters. These suppliers are third party distributors, which makes it harder to drive in customer awareness. Since Given Imaging relies so heavily on their manufacturers and distributors, it is hard for them to bring in optimal revenue.

Analysis of Current Situation - SWOT

The PillCam has revolutionized the medical industry and created a transformation in both the immediacy and comfort of gastrointestinal tract exams. Not only the PillCam, but also PillCam COLON has allowed Given Imaging to gain a competitive advantage compared to other companies in the market. Given Imaging’s relationship with suppliers, as well as their global sales network, has allowed them to grow and distribute to different countries around the world. While Given Imaging has been successful, their products fail compared to others through high-resolution imaging and training costs. Other companies like Olympus have created a PillCam that offers high-resolution imaging along with real-time viewing. Both patients and doctors respect this method and it has shown weakness in Given Imaging’s operating system.

Since the global economy is growing, more people have the money to spend on experimenting new products. This has created great opportunity for Given Imaging as a company, especially since they are the least expensive option compared to all other companies in the market. However, even though the PillCam is considered cheap, Given Imaging is affected by a threat of doctors not wanting to adopt this new method because of the training involved. Along with this, Given Imaging is required to wait for regulations, such as FDA approval, before they can distribute the product.

KPI - PESTLE

Given Imaging’s external environment is based upon these six outlined competitive forces. The political environment is constantly changing, and it has become important for Given Imaging to keep up with each country’s stable government status. Tax regulations and health care laws play a primitive role in how the PillCam can be bought, distribute, and consumed. One other factor to keep an eye on is trade regulations when distributing between country to country or from company to consumer. Understanding the global economic currency and global income rates will make sure that the pricing of each product is feasible to the consumer. The medical field is constantly growing and with that so is the opportunity for getting new doctors to adopt the PillCam method. New doctors will be more willing to adapt and participate in the training sessions which will only make the PillCam method more common as years pass. Social factors come into play when consumers know how Given Imaging’s products work. Consumers want to know that the PillCam is healthy, comfortable, and safe when it goes through the patient's body. Consumers across the world are very health conscious and take into consideration how a product could help or hurt their body before consuming. Among technological factors that may have a significant impact on the medical industry is research and training spending. Given Imaging spends thousands of research dollars each year in developing and advancing products. Doctors are also expected to spend the money on the technology in order to gain training and experience in handling the PillCam.

In order to advance the company compared to its competitors, Given Imaging must conduct online marketing in order to reach out to their target market. The FDA as well as other safety and health regulations comes into play when it comes to legal issues. Given Imaging makes sure that they are on track to complying with all rules, laws, and regulations. Environmental issues such as, sustainability is an important factor when it comes to America and European countries. Given Imaging has adopted recyclable packaging and disposable products to coincide with what their consumers are looking for.

Industry Analysis - Porter’s 5-Forces

Since the medical industry is small, over the years it has become very competitive for Given Imaging because of new entrants. There are high costs in regulation as well as product prices and choices of the consumer. Given Imaging is known for meeting consumer’s expectations. While there is a high rate of mergers, Given Imaging has brand and product loyalty from those who buy from them.

The PillCam allowed for Given Imaging to have power over their competitors because of how innovative the product is. Given Imaging successfully patented the product, so no one could copy while cutting costs that other companies could not compete with. By cutting the costs of the PillCam to an affordable rate, Given Imaging has been able to build a positive relationship with their suppliers. Given Imaging has created a bargaining power with their buyers through the creation of health and wellness in their products. The PillCam is safe, comfortable, and easy to use for both the doctor and the patient, making it the most appealing option on the market. Medical technology has been advancing worldwide helping companies build out products in the most efficient way. The threat that these alternate products have compared to the PillCam is not so much the cost but rather the threat of someone creating a similar product with higher quality than Given Imaging’s own.

Financial Analysis

Analyzing a 5-year trend of Given Imaging, the company has substantially grown in revenue. In figure 4. 1 it is visible that Given Imaging made great progress in driving revenue from 2008-2011. Technology took off not only in the United States but across the world as well. Patients and doctors were becoming more aware and trained in the use of the PillCam as it made its way to being commonly used. While Given Imaging’s revenue has been successful, their operating expenses dropped year over year from 2008-2011. This drop could be from the high costs of medical and technology equipment used for making products. Given Imaging’s total assets and total liabilities have both gone up on a steep incline. Given Imaging has gained value in the products that they have made which has helped drive in growing numbers in both assets and liabilities.

Strategic Options

Given Imaging has strategically focused on low cost of products, product innovation, and supplier relationship. In regard to product cost, Given Imaging has successfully managed to have their PillCam at the lowest cost. This has given them a competitive advantage compared to other companies in the market. Since the PillCam is easy to use and seen as innovative by consumers, Given Imaging has strategically advanced to be the most trusted in the PillCam products. Given Imaging has also strategically networked their relationship with both buyers and distributors. The company has become trusted and known to people within the medical industry. In accomplishing the differentiation Given Imaging has over their competitors, they have conducted research, effective marketing, proper research, development, and training in the products they produce. By strategically decreasing the cost of production, Given imaging has been able to successfully brand their products as the lowest cost giving them cost differentiation from others in the market.

Recommendations

Given Imaging should begin to develop new strategies in creating products with higher quality in order to stand out from their competitors. In the market, other companies are developing products similar to the PillCam with high-resolution images that are nearly the same price. Since Given Imaging already has the relationship and the brand loyalty with their consumers, creating a product with higher quality at the same price point will greatly differentiate them from competitors.

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Conclusion

The industry and company environment of Given Imaging has been significantly impacted by social, technological, and political forces. The medical industry focuses on these three factors in order to stear their way towards advancement. While these three factors have been successful it is important for Given Imaging to keep in mind the health and government regulations. These laws change often and if they are not kept up with it could be very easy to fall behind. Internally, Given imaging has been successful in the relationship with suppliers as well as quality product production. Given Imaging maintains a brand loyalty that keeps them ahead of their competitors.

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Analysis Of Given Imaging Company Environment And Industry. (2020, April 30). GradesFixer. Retrieved March 28, 2024, from https://gradesfixer.com/free-essay-examples/analysis-of-given-imaging-company-environment-and-industry/
“Analysis Of Given Imaging Company Environment And Industry.” GradesFixer, 30 Apr. 2020, gradesfixer.com/free-essay-examples/analysis-of-given-imaging-company-environment-and-industry/
Analysis Of Given Imaging Company Environment And Industry. [online]. Available at: <https://gradesfixer.com/free-essay-examples/analysis-of-given-imaging-company-environment-and-industry/> [Accessed 28 Mar. 2024].
Analysis Of Given Imaging Company Environment And Industry [Internet]. GradesFixer. 2020 Apr 30 [cited 2024 Mar 28]. Available from: https://gradesfixer.com/free-essay-examples/analysis-of-given-imaging-company-environment-and-industry/
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