Medical DeviceCo, a worldwide medical device manufacturer and distributor, needed to quickly turn around declining profitability by adapting to changing marketplace dynamics. It turned to Bain for help.
The Challenge
After years of growth, Medical DeviceCo faced declining revenues and profit margins due to a combination of increasing pricing pressures and its maturing product portfolio. Past cost cutting initiatives failed to keep pace with new industry realities. The company realized that regaining its competitive edge required rebuilding its business model. The bottom line: Medical DeviceCo needed to cut costs faster and deeper than planned without jeopardizing quality, with the goal of using savings to fund growth opportunities in emerging markets and through acquisitions.
The Solution
Working collaboratively with the CEO, Bain deployed its performance improvement toolkit to develop a multi-prong strategy for transforming Medical DeviceCo into a cost leader. An analysis showed that cost effectiveness would define healthcare winners in the increasingly price-sensitive landscape. But employee productivity at the medical device maker lagged behind competitors. Bain helped senior executives identify both near and long term initiatives to boost productivity, reduce costs and create a new cost structure.
The Result
The sweeping transformation plan is quickly repositioning Medical DeviceCo as a healthcare cost leader. It is achieving quick wins and sustained savings while better meeting evolving customer needs. With Bain's help, the company transformed its business model and identified over $300 million in cost savings, freeing up capital to invest in rapidly growing and emerging markets.
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