INTRODUCTION

The IPP Case Study provides a comprehensive analysis of the organization's strategic approach to innovation and production
across various Strategic Business Units (SBUs). It outlines the key components of our operational framework, including market
identification, product differentiation, and resource allocation. By examining each SBU—Prototypes, Mechanical Parts,
Electrical Pumps, Computers, and Surgical Equipment—highlights the commitment to meeting diverse customer needs and
driving growth through targeted strategies.

THE SBU’S
Mechanical parts: dedicated to the production and supply of high-quality mechanical components essential for a wide
range of machinery and equipment. Focus on efficiency and excellence in manufacturing processes.
Electrical pumps: Specializing in the design and production of electrical pumps. Aim to innovate continuously.
Computers: Focuses on developing and manufacturing advanced computer systems and components. Goal is to
integrate cutting-edge technologies to improve performance and meet the evolving needs of our customers.
Prototypes: Focuses on the design and development of prototype products. Crucial role in innovation, enabling rapid
iteration and refinement of ideas to meet market demands.
Surgical equipment: Specializes in the manufacturing and supply of surgical instruments and devices used in medical
procedures. Emphasizes precision, safety, and compliance with health regulations to ensure the highest quality
standards.
1. Strategic segmentation
SBU Needs (What?) Target (Who?) Answer (How?) SBU Characteristics

Specialized knowledge and

Market is growing increasingly, but
expertise from advisers Inventors,
Funding of fragmented
(experts, researchers, entrepreneurs,
1. Prototypes personalised Competition with engineering
professors) technical
products and firms and research centers
Customized manufacturing developers
prototypes COMMODITIZATION
solutions

Relatively stagnant market

They use exclusive
Commercializes and 3 competitors for operating room
technical salesmen at
2. Surgical manufactures equipement Retailers or directly equipment and 14 competitors on
regional level and
equipment for operating and to users treatment room equipment
executives at
treatment rooms (relatively limited competition)
national level
COMMODITIZATION
 SBU Needs (What?) Target (Who?) Answer (How?) SBU Characteristics

For state markets Highly competitive sector (about

Produce simples parts like
they must respond 50 manufacturers in France)
3. Mechanical machined part for Private/State
to calls from tenders. Declining market with intense
parts computer numeric control markets
For private markets price competition
machines
it is all directed. COMMODITIZATION

Limited competition, with less

advanced products
Direct users or
Investment to Favorable markets with 10%
4. Electrical Cost effectiveness reseller (France&
innovate annual growth
pumps Efficiency exports to Italy and
Unique expertise DIFFERENTIATION (different
Saudi Arabia)
type of pumps than their
competitors).

Specialized in rental of Quickly evolving market

Public
electronic games in public Dominated by few large rental
5. Computers establishments like Through a supplier
establishments like cafés, companies
cafés, arcades, etc
arcades, etc COMMODIZATION
 2. Strategic positioning and scenarios of the future
Key
SBU Characteristics Company Most of competitors Ideal strategies
consequence

Competition with engineering

Market is growing
firms and research centers of
increasingly, between 5-10% Leverage the IPP's
big companies, about 150
annually, with a slight technical advantage
companies are part of it, but
1. Prototypes Commoditization recession in 2018 Star Invest in sustaining and
IPP has significant market
Significant market share expanding market
share
despite a 10% drop in share
Market is growing increasingly
turnover in 2018
= high industry growth

Only a few competitors are Enhance profitability

efficient = high relative market through operational
2. Surgical
Relatively stagnant market share Cash cow optimization
equipment Commoditization
The market is stagnant = low Make minimal
industry growth investments to
preserve market
position
 Key
SBU Characteristics Company Most of competitors Ideal strategies
consequence

Declining market Lot of competitors in private market,

3.
with intense price but only 2 competitors in the state Reduce investments
Mechanical Commoditization Dog
competition market = low market share Investigate cost-cutting
parts
Small market share Low industry growth strategies to improve
profitability

Only about 6 manufacturers that

Invest in maintaining and
Favorable markets offer less advanced pumps = high
4. Electrical expanding market share
Differentiation with 10% annual market share Star
pumps Explore international
growth Annual growth in market = high
growth opportunities,
industry growth
building on existing exports
to Italy and Saudi Arabia

Quickly evolving Dominated by a few large rental Target investments in

5. market companies = low market share Question areas with the highest
Commoditization
Computers Growth is about Lot of annual growth = high industry Mark potential
20% annually growth Concentrate on expanding
market share in promising
areas
 BCG Matrix

STAR
QUESTION MARK
High
Prototypes (1) Computers (5)
Electrical pumps (4)

Industry growth

CASH COW DOG

Low
Surgical equipment (2) Mechanical parts (3)

Relative market
High Low share
 Strategic Map

40%
1 4
3
2
5
3 2

5 1
4
 Scenarios of the future
Current
Optimistic Future Turnover (in million Strategic Pessimistic Future Turnover (in million Strategic
SBU Turnover (in
euros) Range euros) range
million euros)

There are a lot of competitors who are

IPP is able to sustain and expand their able to sustain a bigger marget share
market share. The market keeps because they gain some type of
1. 2.574 growing which allows IPP to keep technological advantage. This causes IPP’s
Prototypes (13%) growing as well. market share and profits to stay the
= 2.83 (in the assumption of 10% same or slightly drop.
growth) = 2.574 (in the assumption of same
situation)

IPP enhances its profitability through IPP made some big investments which
operational optimization. There are no caused a decrease in their profitability.
new competitors entering the market, The market is also growing increasingly
2. Surgical 5.346
meaning they are able to sustain their allowing new competitors to enter the
equipment (27%)
market share. market and their market share to
= 5.346 (in the assumption of same decrease.
situation) = 5.08 (in the assumption of -5% growth)
 Current
Optimistic Future Turnover (in million Strategic Pessimistic Future Turnover (in million Strategic
SBU Turnover (in
euros) Range euros) range
million euros)

IPP come up with an efficient cost- IPP fails to control their cost. Since they
3. cutting strategy and decrease their are suffering from loss in this SBU, they
7.524
Mechanical cost effectively. decide to withdraw from the market.
(38%)
parts = 7.524 (in the assumption of same = no revenue (in the assumption of
situation) cost=sales)

There is able to grow internationally and Suddenly, a lot of new competitors are
expand their market share. No new joining the market, making it impossible for
4. Electrical 2.376
competitors are able to join the market. IPP to sustain their market share. This
pumps (12%)
= 2.61 (in the assumption of 10% results in a lower growth in profits.
growth) = 2.42 (in the assumption of 2% growth)

Annual growth is around 20% per year. The market is dominated by a few large
IPP succeeds to seek a supplier to rental companies and is highly competitive.
produce the “frame” needed for these If IPP is not able to quickly sought a
5. 1.98
computer games, and IPP is able to supplier to produce the “frame” required
Computers (10%)
capitalize on this growth. for these games, they will fall.
= 2.376 (in the assumption of 20% = 1.98 (in the assumption of same
growth) situation)
 3. Self constraints system – Finance
Prototypes Surgical Equipment

Current Turnover: €2.574 million (13% of IPP's total Current Turnover: €5.346 million (27% of total revenue).
revenue). Optimistic Scenario:
Optimistic Scenario: IPP focuses on operational optimization and
Assumes a 10% growth rate in the market due to sustains its market share as there are no new
the customized nature of the prototypes. IPP is market entrants.
expected to increase its market share by Future Turnover: €5.346 million.
satisfying diverse customer needs. Pessimistic Scenario:
Future Turnover: €2.83 million. IPP invests heavily but new competitors enter the
Pessimistic Scenario: market, reducing profitability and market share.
In case competitors gain a technological Future Turnover: €5.08 million (a -5% decline)
advantage, IPP’s market share remains the same
or slightly declines.
Future Turnover: €2.574 million (no growth).
 3. Self constraints system – Finance

Mechanical Parts Electrical Pumps

Current Turnover: €7.524 million (38% of total revenue). Current Turnover: €2.376 million (12% of total revenue).
Optimistic Scenario: Optimistic Scenario:
Cost-cutting strategies improve IPP's cost IPP expands internationally and capitalizes on a
structure, allowing it to maintain its revenue. 10% annual growth rate in the market. New
Future Turnover: €7.524 million. competitors do not enter the market.
Pessimistic Scenario: Future Turnover: €2.61 million.
IPP fails to control costs, leading to a decision to Pessimistic Scenario:
withdraw from the market. Several new competitors enter the market,
Future Turnover: €0 (revenue ceases as costs reducing growth to 2%.
equal sales). Future Turnover: €2.42 million.
3. Self constraints system – Finance

Computers

Current Turnover: €1.98 million (10% of total revenue)

(Case study IPP).
Optimistic Scenario:
IPP secures a supplier to produce the "frame" for
their gaming products and capitalizes on the 20%
annual growth of the market.
Future Turnover: €2.376 million(Case study IPP).
Pessimistic Scenario:
Large rental companies dominate the market, and
IPP struggles to secure the necessary supplier in
time.
Future Turnover: €1.98 million (no growth)(Case
study IPP).
 3. Self constraints system – Frame of Reference
Vocation (The "What") Finalities (The "Why")

Core Business: IPP is involved in five main activity Owner’s Finalities:

areas: Prototypes, Surgical Equipment, Mechanics, The owner’s primary goal is Return on Investment (ROI)
Electrical Pumps, and Computers and aligning business growth with personal financial
objectives.
Scope: Geographically, IPP operates both in France Main Internal Actors’ Finalities:
and internationally, with its products being used in Executives: The leadership at IPP, including its CEO and
industries ranging from healthcare (e.g., surgical Commercial Director, is responsible for strategic
equipment) to electronics decision-making and sales efforts, particularly in highly
competitive markets such as surgical equipment and
New Scopes/Battlefield: IPP explores new business pumps.
areas, such as the development of computer games, Key Employees: Employees who are the guarantors of
where it had entered into collaborations and know-how (specialized workers, project managers) are
outsourcing for specific components. Additionally, IPP crucial to the continuity and success of IPP. They are
is constantly in contact with researchers and external involved in highly collaborative, multi-disciplinary projects.
experts to push innovation and improve its prototype Interest Groups and Lobbies: IPP is in constant
offerings. collaboration with experts, research institutes, and
potentially influential external stakeholders.
3. Self constraints system – Frame of Reference
Ethics (The "How")

Business Practices: IPP adopts ethical business practices by engaging in multi-disciplinary

collaborations. It combines in-house expertise with external consultants (engineers,
researchers) to ensure that their products are innovative and meet high standards.

Operational Integrity: Internally, IPP encourages autonomy and cross-functional training,

allowing employees to switch between workshops as needed. This approach fosters a
collaborative environment and promotes the continuous development of employees’ skills.

Sustainability and Support for Innovation: IPP supports innovation through ethical
collaborations with universities and external research centers, providing opportunities for
underemployed intellectual talent to contribute to technological advancements. This method
not only supports sustainable business growth but also aligns with the company’s broader
mission to foster innovation.
 Key success factors & Pillars
SBU Key Success Factors Pillars

The high research and development are being carried out to develop cutting-edge solutions
Differentiation
Strategic partnerships with suppliers of specific components
1. Prototypes Few competitors due to specialized
It is the skill to learn new techniques very fast
research and development capabilities
The experience of the particular industry that brings new prototypes to the market

Compliance is observed through strict regulations as well as certificates.

Differentiation
2. Surgical The money is put into the field of precision manufacturing and is received through this means.
High switching costs due to the critical
Equipment Building relationships with hospitals and medical professionals is actively taking place.
nature of the equipment
Main quality factors affecting reliability and safety are high standards in new products.

Requires skilled labor and specialist machinery

Operational Efficiency and Quality assurance Commoditization
3. Mechanics Ability to tailor products as per the demands of customers Many competitors can provide similar
Backward Integration with Strong Supplier Network for RM mechanical solutions
Relies upon skilled labor and specialized machinery

Pump designs: Efficiency and reliability

Differentiation
4. Electrical Complex architecture, energy management and material suitability for each type of product
High switching costs due to the critical
Pumps Meeting environmental regulations
nature of the equipment
Establishing a Brand Known for its Quality and Durability.

Quick technological adaptation and innovation

Commoditization
Production by component manufacturers and supply chain efficiency
5. Computers Highly competitive market with focus on
Scale in production to match demand
price
Robust branding & customer stickiness
4. Qualification of scenarios and choice
Prototypes Surgical equipment Mechanical parts Electrical pumps Computers

Optimistic scenario Optimistic scenario Pessimistic scenario Optimistic scenario Pessimistic scenario
Since every prototype is IPP needs to make an Even though IPP operates IPP has a differentiated Since IPP cannot produce
almost customized due to effort to maintain the actively on the state know-how to produce a the frame that is necessary
different purposes, the position that it possesses in market, IPP still has a low pump that is suitable for for games on PC, IPP has to
market can be occupied by the market. There is indeed margin due to the toxic products, whereas seek suppliers. However,
IPP, namely competition will a barrier to entry for the drawbacks an awarded the other competitors the time spent on seeking a
be less in comparison with a market; however, the contract has. In addition, cannot. This makes IPP supplier will enable
standardized prototype existing competitors in the since the price war has different from the others in competition to launch
market. Hence, one can market might still have the appeared in the market, IPP the market. Thus, the similar games. In this case,
expect that this strategic possibility to threaten or will only have less and less optimistic scenario is most the pessimistic scenario
business unit will keep even substitute IPP’s revenue in the future. likely to happen for IPP, for might happen, for the
growing in the future. If IPP position in the market of According to the theory of IPP has a differentiated investment of capital and
can satisfy more surgical activity. micro-economics, in a product that can satisfy time might not pay off in
consumers who have Nevertheless, IPP’s position perfect competition the market better. Thanks the end due to competition.
different needs, they will be in the market is relatively market, the market to the pump that is suitable
able to occupy more significant now, there is no equilibrium is the point for toxic products, IPP can
market share and have denying that IPP can still where the sales price expect growth of 10
higher revenue maintain its position and equals the cost of percent every year in the
have a stable turnover in production, namely future.
the following years companies in this market
will have no profit.
5. Operational recommendations in marketing
according to a qualified scenario of your choice
Prototypes Surgical equipment Mechanical parts Electrical pumps Computers

Leverage existing expert Product innovation: to Diversification: New Product innovation: to Product differentiation:
network + expand their develop and refine surgical markets or product maintain technological customization to
network. tools that align with segments, complementary leadership. Investing in differentiate and value-
Positioning: Emphasize the industry trends and patient products or services to research and development added services to increase
customization aspect (UVP) preferences. reduce reliance on the to integrate smart customer value.
in marketing communication Customer relationship mechanical parts market. technologies into electrical Strategic partnerships: to
to differentiate. management: personalized Niche market focus: pumps, offering customized secure components and
Build a stronger brand: service and customer identifying niche markets or solutions to meet specific potentially collaborate on
focus on innovation and feedback to strengthen specific applications, and customer needs and product development, and
customization (UVP) = relationships and providing additional differentiate. explore partnerships with
position it as the preferred encourage repeat business. services to strengthen their Market expansion: distributors or retailers to
choice in the industry. Conduct risk mitigation: competitiveness. international growth, expand market reach.
Conduct market research competitive analysis and Positioning: clearly strategic partnerships to Conduct market research:
and collect consumer scenario planning to articulate UVP in marketing expand market share. identify emerging trends
feedback. identify potential threats and branding, focusing Brand building: highlight IPP and customer preferences,
Premium pricing strategy and develop contingency marketing efforts on niche ´s expertise in producing and analyze competitors'
and value-based pricing: to plans to address potential markets or specific electrical pumps specifically offerings and pricing
reflect the customized risks. customer segments, and designed for toxic products strategies.
nature and value of the value-based pricing. (UVP) = trusted authority.
prototypes.