Siemens Medical Solutions

1. What are the elements of MED's strategic plan for its turnaround?

MED's strategic plan for turnaround focused on people, process, and products.

Firstly, for people with leadership quality, MED transitioned or replaced about 50% of managers and gave new responsibilities for both processes and deliverables. Also, MED implemented human resource development programs such as extensive training programs and mentoring program. MED tried to make all employees to assume a customer-oriented mind-set for greater productivity.

Secondly, for process improvement, MED outsourced nonvalue-added steps, consolidated facilities, and shut down or sold off unnecessary resources. Also, MED executed diverse strategies such as standardization, just-in-time approach, monthly monitoring report, modular product designs, and Syngo platform. Furthermore, MED created a new process organization for sales and service, which was identified into acquisition, offer, order, call management/field support, and business management and support.

Finally, for product innovation, with reduction in cost structures, MED innovated its product lines at competitive prices and tried to expand its customer layer from the high-end, value- and quality-oriented customers to the lower-end, more price-sensitive customers.

2. How important was planning for the success of the turnaround?

Planning identifies how much macroeconomic and industry factors contribute to business performance, makes investment decision aligned with current and future market conditions, and makes strategy execution more effective.

With turnaround strategy planning focused on people, process, and products, MED could successfully secure both value- and cost drivers and isolating mechanism. Firstly, due to people with leadership quality, MED improved accountability and transparency across the organization provide customer-oriented products and service. Secondly, due to process improvement, MED remarkably reduced costly production capacity, improved sales and service productivity, and achieved the customer satisfaction and competitive advantage over its rivals. Finally, due to product innovation, MED