Market Research and Study – Market Research help HEC to know the customer needs thoroughly,

which was the main source to build and innovate new products.

Direct and good relations with clients – The good relations with hospitals helps HEC to get feedback
from the staff, users and customers. This data is usually combined with other cos and performance
related data to innovate new products. Field observation of customer problems and needs is possible
because of this.

Customer Service – Good customer service like Maintenance training and patient room layout is done.
This helped HEC to get replacement sales by developing skills in the area.

New Product Development Process with Cross Functional Collaboration – Real time testing with
feedback and inputs from customers and collaborative work among Marketing, Product Design and
Development and Manufacturing are at same place which allows for good collaboration and quality
products. Sometimes, this can be a limitation due to long process time. But the tradeoff involved here is
Quality Vs Time.

Flexibility to propose and pursue new ideas – Everyone has the freedom to propose and pursue new
ideas which leads to creative and innovative products. But sometimes, it can also be a limitation if time
is wasted on low margin products

Valuable Rare Imitable Non Substitutable Implication

Market Research and Yes Yes Yes Yes Sustainable
Study Competitive
Advantage
Direct and good Yes Yes Yes Yes Sustainable
relations with clients Competitive
Advantage
Customer Service Yes Yes Yes Yes Sustainable
Competitive
Advantage
New Product Yes Yes Yes Yes Sustainable
Development Process Competitive
with Cross Functional Advantage
Collaboration
Flexibility to propose Yes Yes No
and pursue new ideas

Acquisition Strategy – Could acquire companies with expertise in other product lines like Testing room
equipment, surgery room equipment, small scale furniture for hospital rooms, home setup equipment.
As the new product development process is long in HEC , it would save time and cost for HEC to acquire
companies which already specialize in those areas.

Advantages

Could leverage the existing brand name and expand into new product lines
Less risky because of Diversification – Any further stagnation in the growth of hospital room can be
mitigated through diversification.

Economies of Scope – There might be a chance of economies of scope due to diverse product lines

Disadvantages

Risk of Brand dissolution – The existing brand name might be hampered if the acquired companies
products are sub-standard.

Risk of Reduction in Differentiation – HEC’s products are highly focused and differentiated. There is a risk
of reduction in differentiation due to addition of new product lines

Cultural Differences – There might be cultural differences between the 2 companies which might be a
hinderance to production and quality