Part 7: Strategic Analysis Report on Implant Direct
Strategy Implementation
Implant Direct’s ability to pursue the differentiation through enhancement strategy depends on whether the organization has access to the people, time, and money to implement the strategy.
People
Despite Implant Direct’s sales department high turnover, the company has access to the necessary resources to help implement the proposed strategy. As mentioned earlier, since Danaher Corporation owns implant Direct, the company has access to Danaher’s Business System (DBS) main office for additional guidance and support. The DBS office is an internal consulting service that supports Danaher’s 400+ operating companies to analyze and implement strategies. Furthermore, as part of KaVo Kerr Group, Implant Direct has access to the other Danaher’s dental manufacturing companies ranging from a few hundred million dollars to a few billion-dollar companies. So, Implant Direct can certainly leverage its internal and external resources to implement the proposed strategy.
Money
Since Implant Direct does not disclose its financial information publicly, it is difficult to assert that the company has the money to support the implementation of the new strategy. Judging by Danaher’s financial statements and Danaher’s dental segment growth, and knowledge of the company, according to corporate leaders, company most likely has the money to support the proposed strategy.
Time
Due to high rivalry in the industry, high employee turnover in the sales department, and internal knowledge of the company, Implant Direct does not have much time to start implementing the proposed strategy. The company must act fast to address the challenges that it currently faces before it loses more market share to its competitors.
Recommended Organization Profile
This section of the report and table below provides recommendations for the future 7-S framework of Implant Direct as part of strategy implementation.
Table 1 - Implant Direct's Proposed 7-S Alignment
Systems. Judging Implant Direct’s current Enterprise Resource Planning (ERP) and the issues it has caused to the organization, the company ERP system may not work for the company in the future. As part of the proposed strategy, Implant Direct should evaluate a possible ERP upgrade to ensure the system is aligned with the other 7-S (i.e., Strategy, Structure, Style, Staff, Skills, and Shared Value). If the company continues to ignore the ERP issue, it may not be able to succeed in implementing the proposed strategy.
Style. The company president and CFO may need to re-evaluate their leadership style in managing the company. While it is important to set budget and financial accountability across the organization, the leadership team may want to empower and establish trust at some capacity. Perhaps by hiring the right candidates (staff) and investing in employee development and skills, they might feel comfortable to shift from hierarchical leadership to a more collaborative style. In doing so, they might increase the level of trust among the rest of the employees.
Staff. By addressing the ERP issue, the production department will have access to a better and improved system that will allow them to forecast the manufacturing process. As a result, they may lower the amount of back-orders that Implant Direct has been experiencing. Since customers are expected to receive their orders on-time, many sales reps will not have to deal with the angry customers and experience loss of sales. However, the company does need to address the sales commission and total compensation package for the sales department.
Skills. Implant Direct should not discount the value of investing in employee skills and development. When the company decides to invest in its ERP system, investing in skills become more important, so that skilled employees will be able to use the updated system to do their work. Additionally, investing in employees’ skills in the other area may lower the production cost, help the R&D department to implement and maintain the CAD/CAM systems, and other departments.
Shared values. Implant Direct’s senior management team should seek to establish trust among the employees. They may achieve the employee’s trust by leading by example, transparency, mentorship, improving their communication style. For instance, the company president should not wait until there is a serious issue with the company technology system to check on the IT staff. Since the firm’s employees spend most of their time at Implant Direct, there should be some type of employee training and development program provided by the company. In doing so, the employee’s trust may increase as the employees notice the company’s interest towards its employee’s development.
In summary, as part of the proposed strategy recommendation, it is important that Implant Direct re-evaluates the factors of the 7-S Framework. Fortunately, the company does not need to address every element. However, the company does need to address the issues surrounding systems, styles, staff, skills, and shared values. By addressing the ERP issue, investing in employee’s skills, development, and overall compensation, and change to the senior management team’s leadership style. The firm should also re-evaluate its shared values to address employee’s trust and to increase productivity and cross-functional teamwork. In doing so, Implant Direct may succeed in implementing the proposed strategy.
Evaluating Success
To attain competitive advantage, not only must Implant Direct have a high-quality strategy, but it also needs to have a high-quality implementation process to achieve a profit above the industry average.
The first area to address is the issues surrounding the firm’s ERP system. If Implant Direct prioritizes the implementation of a newer ERP system, the company will be able to empower its sales, marketing, and production departments to forecast the production cycle better. As the company has already experienced, forecasting its inventory across thousands of different products stock key unit (SKU) is not sustainable by using Microsoft Excel spreadsheets, emails, and the manual process. If Implant Direct wants to differentiate itself while managing its operation cost, investing in the ERP system is highly recommended. The current process has proven inconsistent and erroneous. By upgrading the ERP system, the company can potentially automate the entire process. In doing so, not only the firm may achieve customer satisfaction, its sales and customer service department may also appreciate not receiving as many angry phone calls from the customers whose orders did not arrive on time. In summary, by addressing the ERP issues, Implant Direct can potentially change the technology from being a source of competitive parity to a temporary competitive advantage or sustainable competitive advantage. Additionally, the new and efficient ERP system can promote productivity, efficiency. In doing so, the company’s new ERP system can help to control cost and maintain the price parity as recommended by the proposed strategy.
After addressing the ERP challenges, the next area for Implant Direct to address is its human resources management such as employee retention, trust in the new leadership team, employee skills and development. Implant Direct incurs cost when it loses a sales rep as some of its customers may decide to stop ordering from the company. Additionally, the company incurs most cost in recruiting, hiring process, onboarding process, and until the new candidate is ready to manage their territories. Implant Direct’s management team may be able to increase its employee retentions by evaluating the company shared values, investing in developing and training its employees, and evaluate compensation for its sales reps. Since the company wants to follow the differentiation through enhancement by offering more attributes like better customer service, on time delivery, while maintaining the price somewhat consistent (price parity), the company should improve its sales reps’ retention.
After addressing the ERP and human resources management, Implant Direct should address the issues around its marketing effort. Due to the company’s historical back-order issues and sales reps’ retention, and the rumors that other companies and sales reps have spread, some dentists believe that Implant Direct is a Chinese based company. As the company wants to differentiate itself in the industry, the firm should invest in its marketing effort to educate its customers that Implant Direct’s products are made in the US. Additionally, the firm’s manufacturing process are highly regulated by FDA and International Standardization Organization (ISO). Lastly, strong research and case studies have been are written regarding Implant Direct by well-respected dentists — also known as Key Opinion Leaders (KOL).
Conclusion and Implications
In summary, due to the industry phase being in the growth cycle and the threat of new entrant being high, Implant Direct’s competition is expected to grow in the future. By investing in its technology system including in its ERP system, Implant Direct not could not only help its production department to do a better job with manufacturing planning and production, but the technology system could also empower the sales reps to provide more accurate information such as inventory data to the customers. Since the basis for the competition in the industry is primarily on cost control followed by differentiation, by investing in its technology system, Implant Direct can lower its operating costs, and keep its promise to its customers (e.g., shipping orders on time.) As the competition increases, Implant Direct might be able to differentiate itself through technology, innovation, and providing excellent customer service experience. And, after completing the analysis and strategic formulation process, the differentiation through enhancement strategy is the business strategy most likely to result in Implant Direct obtaining a competitive advantage.