Nexus Cardiac Product Ltd.

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Nexus was started by three professors as a small branch at Wilkinson University. The professors made a breakthrough in their innovation of the pacemaker, a life-transforming device that aided in the control of heartbeats. The University provided the entity with the initial capital during start-up. The University also helped with the business operation and business contract space. The company is committed to developing new innovative products and exploring research. It was able to win awards for its use of nanotechnology and the innovation of a power source. Due to its objective focus on developing new products, its revenue was able to show a notable increase from 3,000,000 dollars to 9,000,000 dollars in one year and a half. The chief officer in charge of the operation (CEO), Fadi Fakhoury, was fully committed to the creation of several products at the company. The pacemaker gadget is aimed to help stabilize the irregular heart rhythm of patients; it is implanted through surgical procedures and externally controlled by a programmed computer.

The company cannot produce enough products to meet the global demand. Currently, its supply is below the market demand because it cannot avail its new products to other parts of the world. Nexus has also encountered other challenges in entering new markets, existing bureaucracy, constraints, and regulations in different territories. The products were complex and required personnel with advanced qualifications to handle the testing aspects such as demonstration of use, technical guidance, and development of new designs. The Company had only 26 staff members; each helping one another interchangeably due to the small size. The company’s profit was projected to increase by 15%, although it still required more funding to meet its goal of expansion. Nexus’ main strength is in research and development, an area which has been headed by Professor Shen after resigning from the university to take full responsibility for the department. The Research and Development department was occupied by ten staff out of the possible 29, and it played a critical role for the company. The use of technology was a priority with its proficient IT department’s ability to automate its inventory system as a strategy for improving supply chain management. The Enterprise Resource Planning system (ERP) had the supply chain module and the inventory and purchasing functions, which made it quite efficient. However, the implementation of strategies and system operations was done in stages for technical and financial reasons.

Identified Issues

Throughout the life cycle of Nexus Company, it has encountered several issues, both short-term and long-term. The issues range from staffing decisions, priorities, marketing issues, partnering, expansion, and the financial aspects. The issues identified will be understood by undertaking a SWOT analysis to determine the key strengths, weaknesses, opportunities, and threats to the Nexus Company.


  • Nexus has intense Research and Development department; described as productive and upholds efficiency in delivery.
  • The department is held by a vibrant team that has helped Nexus compete effectively with other industry players and big companies that also manufacture similar products.
  • The quality of its products produced is high, and there are no reported post-implementation claims.
  • Products are unique and few in the market
  • Dedicated management in its entirety, with R&D at the core
  • Availability of funding sources due to good performance, research grants, and eligibility for additional funds sources.
  • Greater profitability prospects; annual revenue increased from $ 3000000 to $9000000 (“Nexus Cardiac Products Ltd,” n.d.).
  • Implementation of Enterprise resource planning with supply chain modules and inventory which has ensured tracking of devices and improved visibility to customers
  • Ability to outsource distribution activities from 3PL.
  • Good negotiation by top management with external markets and authorities as well as governments


  • The sales section has limited technical knowledge of the complex products
  • Insecurity in products during delivery as some get lost while others break while on transit
  • Smaller marketing and sales team


  • Nexus can increase customer levels of satisfaction through timely delivery
  • It also has the possibility of expanding its market share by hiring more sales experts
  • It can increase its grant and credit application to get more funding to boost production
  • Availability of market for its products


  • Demand for low priced quality products
  • Stiff competition by large companies
  • Many and varied regulations, constraints from governments and authorities
  • The competitive bid process for higher sales volume

Short-Term Issues

Nexus Cardiac Products Ltd is a small company, which experiences various challenges. The company’s top managers desire to meet specific demands that guarantee efficiency in running the company. Despite producing quality products, marketing them posed a challenge because they were new in the market and complex. The pacesetter was a new product, which had its distinct features. Professionals in the Nexus sales team could have explained such attributes; apparently, they were missing. The team has a small number and limited expertise and experience. Therefore, it was challenging to build momentum toward prominent industry players who pose stiff competition.

Product-Focused Issues

Now, Nexus is encountering some confusion concerning were to shift its attention and resources; especially concerning its two major products. Numerous challenges will sprout if the products become available for sales, production, or distribution. New products will encounter shortcomings, which need to be discussed and given priority. Considering the two products, there is not enough resource to be mobilized for substantial production.

Manufacturing Focused Issues

The main product and priority at the moment is the pacemaker stabilizer product. The sales volume is bound to show significant increment over the next two years while manufacturing bulk products is constrained due to finance and staff challenges.

Forecasting in Market Research

Nexus has a gap in proper marketing research, which is evidenced by its inability to focus on one product or a group of products to be developed and promoted. They lack data on the current market situation and they lack adequate information on competitors.

Long-Term Issues

Nexus Company will have to deal with other long-term challenges while enhancing its growth and expansion. To reach broader coverage while maintaining the development of quality medical devices the company has to address the long-term challenges. The issues are mainly related to the staffing and the approaches used in the external markets like the US and Canada. Part of the long-term aspects to be addressed include the customer’s future expectations.

Sales Team Composition and Restrictions

For growth purposes, the entity requires to re-look at the field sales team who act as the business ambassadors in various destinations. The number of sales staff requires to be reviewed regularly as part of adapting to the increasing demands from customers. The staff needs to have knowledge and expertise to approach health stakeholders and other experts with utmost confidence and impress the decision-makers and potential clients in respective places while seeking potential markets. In the future, a high-quality sales team with technical and medical knowledge will be critical. The team will be highly instrumental when there is a need to enter a market with strict restrictions.

Customer Expectations in Medical Community

The cost-cutting element is a priority with a reduction expected when the market is not promising. This is evidenced in Nexus when they choose to keep minimal inventory for available use. Fewer inventories have been pushed by making demand planning and lead times exceedingly sensitive.

Operating Environment

In this regard, we are looking at the distribution of the industry players and the examination of the internal operating environment, which promotes business and the hindrances. Nexus has its internal environment as well as the external environment concerning other players and the barriers.

Internal Environment

Nexus Product Company enjoys a healthy business internal environment, and this is evidenced by the relationship between the shareholders who have aligned their needs with the company’s business objectives. They have seen it wise to use knowledge within to spur growth while utilizing other limited resources. They have used their knowledge to help in sales, seeking external markets, and signing bids and contracts that bring positive outcomes.

External Environment

The product’s existing market environment is highly competitive even though, the companies producing the same products are fewer. Several setbacks exist, including certifications, patents, skills, and advanced technical capability for manufacturing. The restrictions on the outside markets make it hard for Nexus to enjoy securing its market share and make profits in its line of products. Canada presents over 1000 manufacturers of gadgets, large manufacturers with surplus capital dominating the market. The pressure on health care managers to cut costs annually has influenced Nexus’s profitability. Pressure to secure less invasive techniques, many regulations which guarantee patient care, and move to have an improving wellness system have all affected purchasing decisions. The move to reduce the amount of inventory on hand has also enabled the company to install an ERP system, which allows tracking and visibility of the clients.

Root Cause Analysis

The issues listed above have the following causes:

  1. The inability to foresee growth and the company’s production capabilities
  2. Changing customer expectations
  3. Contentment mentality which hinders expansion

To increase the demand for products, the manufacturing department needs adjustments to meet the future supply needs of the organization. The adjustments will help to solve manufacturing problems and to improve the demand for the products hence increasing the company’s profitability. The teams handling sales ought to have been reviewed gradually upwards and its composition well aligned to include expertise equipped with technical, sales, and medical knowledge. This will help to solve the sales team deficiencies, which are posing a challenge to the success of the organization. Furthermore, the demand of customers is ever-changing as they are constantly requesting high-quality products which are delivered within minimum time. In return, the change in demand transfers the pressure to the supplier hence the need for proper forecasting and planning. The rigid statement of “stick to your knitting” is limiting and there is a need to advance from such a mentality to ensure expansion and exploration of other markets (“Nexus Cardiac Products Ltd,” n.d.). The statement has brought a challenge to resource utilization and management, making the future of the company unstable.

Market or Environmental Analysis using the Porters Five Forces Model

The Threat of New Market Entrants

There is a low chance of a new entry as there is a large amount of capital required, the skills required are of advanced level both in manufacturing and marketing. The labor force needed to enter the market and meet the customers’ demands is extremely high, hence the low probability of new entrants

Threat of Substitutes

In this case, no evidence is available to the available pacemaker for the patients with low heart rhythm even though, many manufacturers exist in the market.

Bargaining Power of Customers

Customers have been deprived of their bargaining power. They cannot negotiate but buy and use the product whose quality is guaranteed; there is a bargaining power restriction.

Bargaining Power of Suppliers

The suppliers are many in the market; hence, they are honest in their actions to remain the customer’s ultimate choice. The prices are primarily dependent on the supplier who promises the quality in delivering the products to save lives.

Industry Rivalry

Similar companies are offering the same product; the companies are large in size and financial capability, thus giving greater competition to Nexus, a small-scale entity. The vast economic might have enabled big companies to win big contracts, buy licenses, compete, and set business strengths that drive others out.

Alternatives and Options

Selling Out to Large Competitors in the Industry


  • The advantages of this include its potential and lucrative business for the stakeholders who have shares in the business.
  • The necessity to make critical decisions will be avoided.
  • Possibilities of getting other job offers in similar companies


  • The buyer who is a competitor may decide to eliminate the product hence wasted energy and time.
  • Employees will lose their jobs.
  • The product may not reach patients.
  • As many big companies, 2/3 in other countries, this means relocation of wealth.

Remaining a Small Firm and Licensing its Products


  • Complete control in the design and product implementation due to patents.
  • The product will be helping people, and intentions become clear.


  • The distribution and manufacturing staff become obsolete and not employed by Nexus
  • There is a loss of the brand and reputation
  • Neither rewarding nor lucrative

Strategically developing Nexus and supporting its growth


  • It’s rewarding in the end though challenging.
  • You keep the company, its products, and the future


  • There is more risk involved in losing investment.
  • Lucrative business sales could pass you.


The best option is to develop Nexus Company in its growth, strategically supporting its pacemaker product to broaden the sales volume regardless of the challenges. The determinants of Nexus growth and expansion rely on the uptake of the pacemaker product. The ability to accrue the advantages of the future market and growth is fundamental. Therefore, choosing to finance the expansion agenda and equipping the research and development to further innovation capabilities is critical. I recommend the extra-leased space be used upon the expiry of the current sublease; within one year and a half. The accrued income will help to increase the products, which will help to meet the available demand of the products while using the available system to forecast the market trends. The expansion will be financed with the profits made and utilize the research grants, development loans, and research-tax credits. Nexus will focus on its strategy to capitalize on the sales opportunities by use of technical and medical expertise to help in spearheading negotiations, which results in good business revenue.

Contingency Plan

As a contingency plan, Nexus will have an alternative 3PL to deliver its products. An alternative supply management system will be put in place to support where the existing one fails, as the remaining modules are implemented. Nexus is committed to quality and improving its research and development department. Alternative sources of finances will be explored, taking advantage of the best financial performance.

Financial freedom will help the company to expand its operations and patent its innovative products, thus ensuring growth through utilization of the information and technology department and their strength in exploring the installed system in daily operations. Financial freedom will make good use of the supply chain module with its purchasing and inventory controls to ensure all records are filed in the system. If well used, the system guarantees the safety of products during delivery as gadgets are embedded with tracking codes. At the same time, customer visibility will be significantly enhanced; hence better business prospects. The module will also improve lead times essential in the medical business; the flow of materials will be made more efficient hence adapting to the new market patterns. With sales doubling every year, an increase in manufacturing is required to be up-scaled as fast. The vendor will still be at play with more flexible time to meet the specifications while temporarily sustaining growth until our capability is expanded internally. The opinion of buying MMPO now may not be the best solution. It will be considered in the long-run perspective when the internal expansion has occurred and the sales volumes have tremendously grown, not forgetting the new staff in the sales department, which requires immediate review.


The implementation of the tracking element for the products, reducing the leading time, and prioritizing the supply chain functions is an advantage for growth beyond the present time. As noted, the stakeholders who are healthcare managers are keen to cut costs. Those not meeting the suppliers’ inclusion criteria will be out of business; time is a critical component for the managers. The inventories and the bidding process must be of the highest standard to be able to win business. Therefore, the lead time must be reduced from 70 to 30 days; this will make Nexus be at par with the big players in the industry. The average lead time for industries is at 120 days for those in the medical sector; the resultant effect is; that there is the possibility of earning the market share. In regards to expansion and product innovation, it is recommended for Nexus to pursue and explore the expansion and target new markets by utilizing the supply chain system. The company should also work to safeguard its patent aspect to help it meet its strategic objectives. Adopting the recommendations will make Nexus Cardiac Product Company competitive while delivering quality products to improve the lives of patients.

Monitoring and Control

Nexus Company’s success is measured by the increase in its sales volume, access to external markets, and technological approach to developing new products. The key performance indicators include customer satisfaction, internal process controls, employee satisfaction, and increased revenue. The use of Information Technology will help improve customer relations with a viable supply chain management system. The IT department will provide reliable information to inform the management to make early decisions before any crisis emerges. When the project is failing, there will be a need to evaluate the gaps to be addressed. All Nexus departments will be re-organized if the gaps have been identified for corrective action. The top management will consider investing in infrastructure and human resources. The sales and marketing team will get support so that they get viable business opportunities. Nexus is not considering quitting this industry but considering identifying the risks for mitigation.


Nexus Cardiac Products Ltd: Supply Chain Management Association. [PDF] (pp. 1-11).

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