Fresenius and Strategic Management

Paper Summary:

In this article, the writer notes that Fresenius Medical Services operates in a maturing industry environment. The writer points out that there is still some growth in this primary market of the United States, but the market is showing signs of maturity. The writer discusses that in response to the maturing industry, Fresenius has undertaken a couple of main competitive strategies. The writer maintains that the one threat to Fresenius' competitive advantage remains technological innovation. Should a competitor successfully develop technologies or techniques that revolutionize the renal care field, Fresenius could lose market share quickly. The writer concludes that Fresenius' size and experience provide some barriers against competitive threats, so it would take a revolutionary product or idea to break that barrier.

From the Paper:

"Aside from acquisitions, Fresenius is attempting a differentiation strategy. They are approaching this on two fronts - technological innovation and customer service. In this mature business, it is difficult to gain a sustainable competitive advantage, so Fresenius is working to gain advantage in multiple areas. The focus of their technological innovation is towards effectiveness - building a better dialysis machine. They are also working towards building a large product line that supports a wide range of unique customer needs. This is also part of their customer service strategy. They have a much stronger customer service program than DaVita, and offer a wider range of ancillary services at their clinics. This allows them to achieve some differentiation based on service. It appears that DaVita, for its part, is attempting to be a low-cost provider, with adequate service."

Sample of Sources Used:

• No author 2006. 'Fresenius, Renal Care selling centers to Tannenbaum venture' Nashville Business Journal [Online] Available at: http://www.bizjournals.com/nashville/stories/2006/02/13/daily20.html?jst=s_cn_hl
• No author 2007. 'Fresenius Medical Care Becomes the Leading Dialysis Provider in Asia'. Fresenius Medical Care [Online] Available at: http://www.fmcna.com/news/01_2007_01_09_Excelsior_English_FINAL.pdf

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