Can you get this Wednesday? The company is:
1. Executive Summary
2. Existing mission, objectives, and strategies
3. A new mission statement (include the number of the component in parenthesis before addressing that component)
Great mission statements address these 9 components:
· Customers: Who are the firm’s customers?
· Products or services: What are the firm’s major products or services?
· Markets: Geographically, where does the firm compete?
· Technology: Is the firm technologically current?
· Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness?
· Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
· Self-concept: What is the firm’s distinctive competence or major competitive advantage?
· Concern for public image: Is the firm responsive to social, community, and environmental concerns?
· Concern for employees: Are employees a valuable asset of the firm?
4. Analysis of the firm’s existing business model
Cantel Medical Business Model
Cantel Medical is a very renowned company in supply of infection prevention equipment and products. From the year 2000, the company has relied on the acquisition strategy as the primary growth element. The company also heavily relies on its mission statement, vision, objectives, and business values to motivate its continued growth over the years. Additionally, the business model is a unique one that targets the unique healthcare market and has managed to be a global leader in selling and supplying unique products in vital healthcare segments. As such, this paper is focusing on shedding more light into the operations of Cantel Medical as inspired by its mission and vision objectives. Additionally, the paper also looks into its business strategy as well as provides a new mission statement that would be very beneficial to the growth of the company. Particularly, the paper places more emphasis on the Cantel’s business model as it’s mainly the one that has been responsible for the strong financial performance for the last 11 years.
Existing mission, objectives, and strategies
Cantel Medical Corporation is a global company based in the U.S and is fully dedicated to the delivery of innovative infection prevention equipment and products and services to caregivers, patients, as well as other healthcare providers with the intention of improving the health outcomes and help in saving lives (Cantel Medical, 2012). The company uses an expansive portfolio of water purification and filtration, endoscopy, and other healthcare disposable. The company has continually provided the market with high-quality solutions and unsurpassed services that touch millions of lives across the globe every year. The company as well expects expansive growth for the next five years (Cantel, 2018). Cantel Medical supplies its products to a very diverse stable market that is ever-growing in the medical end. Importantly, the company has been able to gain a strong record in organic growth. Additionally, the company has demonstrated its ability to grow inorganically through acquisitions. The company’s main operations are guided by their mission statement which state:
“Cantel Medical is dedicated to delivering innovative infection prevention (“IP”) products and services for patients, caregivers, and other healthcare providers, which improve outcomes and help save lives”
Cantel Medical hospital’s business strategy involves the application of extreme discipline in the process of identification of small businesses targeted for acquisition primarily in the healthcare niche (Cantel Medical Corp, 2014). Since 2000, the company has been able to complete 33 acquisition by the end of 2018. Based in their cash flow statement, the company has spent over $600 million in acquisition of small businesses in healthcare (Cantel, 2018). However, it has not issued a significant number of stock to the market. The cash flow statement implies that the company spends an average of $20 million for acquisition of a small business.
According to Cantel Medical, their concentration is a disciplined one that focuses on acquiring new opportunities in the market niche of infection prevention (Orelli, 2017). The prime focus is on building and expanding their core platforms: healthcare disposable products, water purification and filtration, and reprocessing systems. The company also focuses on acquiring key strategic alliances complementary to their existing business, or even independent of their current business. The company always does not provide an ultimatum or guarantee of any acquisition that has not been completed yet. Further, it also does not guarantee that it can grow at rates that abnormally surpass the industry growth averages.
While a person willing to invest with Cantel Medical may be skeptical of the company as it heavily relies on acquisition to fuel its growth, it’s clear that this strategy is a sound one. First. The company looks for attractive businesses whose long-term growth prospects are solid. In fact, about two-thirds of the company’s revenue growth is organic and mainly through these acquisitions (William, 2017). The second element is that while previous research indicates that large acquisitions and mergers are precarious, recent research indicates that companies that acquire smaller businesses have a higher likelihood of being more successful than companies that rely on large mergers in driving shareholder value (Orelli, 2017). Finally, the company is focusing its investment deals in strategic areas in core sectors with a key theme of sanitation and infection prevention. Further, every acquisition that the company ventures is significantly accretive, mission-driven, and highly synergistic to the current business assets.
Additionally, the company has been able to build a portfolio that basically proves niche leadership through acquisition. Any investor willing to join their venture should view the company as the higher versions of Constellation Software, Danaher Corp, or TransDigm. However, though a company such as Danaher is capped at $70 billion in the market, Cantel Medical is still in its early stage of its long-term strategy for growth and can be capped at $4 billion (Cantel Medical, 2017).
Cantel Medical New Mission Statement
Based on Cantel’s aggressive operations in the market, the current mission statement does not fully suffice in propelling the company’s ambitious endeavors. Therefore, there is a need to reconsider changing the current mission statement and include a more ambitious mission statement. The proposed mission statement is:
“To advance the quality of lives through innovative (4) and profitable production, manufacturing, and delivery of value-driven healthcare products (2) that meet the level of quality, integrity, and every aspect (6) of our customers and patients (1) expectations while simultaneously providing ever-growing opportunities to our employees (9) and consequently optimizing the shareholder value and gain a global respect (5) in the healthcare industry (3).
The proposed mission statement is a deeply-thought-out statement that tries to cover almost every element of an outstanding mission statement. First, the mission statement focuses on the target customers who are medical clinics and patients who are in need of their medical products. The second element includes the products and services that the company will be providing to its customers. Since the company deals with infection prevention products, the mission statement incorporates that elements in a manner that depicts the quality and integrity of their products and services. The third component is the target market which is mainly the global healthcare market. Another element that the mission statement addresses is the willingness of the company to incorporate innovative technology to provide better solutions to the healthcare industry.
The fifth element in the proposed mission statement is the company’s concern for survival. Mainly, this element touches on how the company is willing to optimize its shareholders value while at the same time gaining a better global position. Another vital element is the company’s philosophy; how the company is willing to distinguish itself in the global market through its strong belief in delivery of quality products and services while at the same time observing integrity in how it meets the market needs. The final element is the concern for its employees. The mission statement focuses on providing new opportunities to its employees through its expansive growth across the healthcare niche.
Existing business model
Cantel Medical Corporation operate as a medical device company that also supplies disposable equipment within the industry of healthcare. Mainly, it supplies the healthcare market with products that are necessary in the prevention of infections as well as in purification of water. Its core segments of operations include the Water and Filtration segment, Endoscopy, Dialysis, and Healthcare Disposables. Each of these segments is touched in details below.
Water Purification and Filtration
The segment that solely deals with water purification and filtration is renowned for selling medical equipment suited for medical, biotech, beverage industry, and pharmaceutical markets (Cantel Medical, 2017). The company provides purification products that are FDA-approved and also considered to be medical grade in production of ultrapure water. Additionally, the company also ventures in selling filters that are used in medical environments to remove impurities such as bacteria, endotoxins, as well as other contaminants to ensure that patients are ultimately protected before they can undergo a treatment procedure that uses ultrapure water.
The water purification and filtration segment is chiefly built around supplying and selling top-notch water solutions within the renal dialysis market, both in bedsides at hospitals and in clinics. The niche is fast growing due to the ever-increasing demand for renal disease treatment. Worldwide, the condition is growing at a rate of 3-4 percent and similarly, the number of hospitals and clinics is growing at a rate of 5 percent. According to the Cantel Medical Report (2018), the company’s business is fueled by both replacement of equipment in old clinics, as well as new clinics that are fast emerging. Currently, in the United States there are around 6500 clinics where 85 percent of these clinics have their water system supplied or made by Cantel Medical.
Cantel Medical Endoscopy segment is hailed for supplying disposable equipped that are very essential in the Endoscopy procedures. The procedure is non-surgical and it involves the examination of a patient’s digestive tract through use of an endoscope which is a flexible tube that is fitted with a camera and light allowing a doctor to view pictures of the digestive tract on a monitor (Cantel, 2018). The company makes irrigation tubing and single-use valves used in endoscopy procedures. Further, the company is also renowned for selling specialized cleaning products and equipment such as detergents and disinfectants that are important in cleaning non-disposable equipment.
Globally, there are over 80 million endoscopy procedures that are conducted annually and the volume continues to grow at a constant rate of 7 percent. Importantly, the endoscopy procedure is vital in identification of different medical issues. These include problems associated with the digestive track as well as colorectal cancer (Cantel Medical, 2017). Currently, in every one out of four endoscopy procedures, there is a Cantel equipment being used globally.
Cantel Medical dialysis segment is known for selling sterilants for dialyzers and equipment use in dialysis. The company is also renewed for selling dialysate concentrates as well as other supplies which are essential for performing renal dialysis (Cantel Medical, 2017). The only limitation in this segment is that the market is solely confined to dialysis centers that are known for reusing dialyzers. The market is a shrinking one and with time the company might be forced to abandon the same.
The fourth segment that Cantel Medical has delved in is the healthcare disposable where the company sells single-use towels, plastic cups, face masks, bibs, and other preventative products mostly used in dentistry. Across the U.S, there are approximately 210,000 dentists and this market is highly fragmented. Further, the annual visits to the dentists are as (Orelli, 2017) well growing at an average rate of 2-3 percent. Importantly, dentists have become extra cautious to use infection prevention products on every patient per visit.
Cantel. (2018). 2018 Annual Report. Cantel.
Cantel Medical. (2012). Cantel Medical 2012 Annual Report.
Cantel Medical. (2017). Investor Presentation November 2017. Cantel Medical.
Cantel Medical Corp. (2014). www.jefferies.com. Retrieved from Infection Prevention and Control Matters: http://www.jefferies.com/CMSFiles/Jefferies.com/files/Conferences/060214/Presentations/Cantel%20Medical%20Corp.pdf
Orelli, B. (2017, June 8). Cantel Medical Corp. Gives the Bottom Line a Boost. Retrieved from The Motley Fool: https://www.fool.com/investing/2017/06/08/cantel-medical-corp-gives-the-bottom-line-a-boost.aspx
Orelli, B. (2017, December 8). Cantel Medical Corp. Keeps Pace on Its Goal. Retrieved from Madison.com: https://madison.com/business/investment/markets-and-stocks/cantel-medical-corp-keeps-pace-on-its-goal/article_2804893c-2af4-5fbd-952d-45c47b98e05a.html
William, J. (2017). Medivators.com. Retrieved from Cantel Medical to Expand Direct Sales Operations in Australia: http://www.medivators.com/sites/default/files/minntech/documents/CR_Kennedy_Press_Release.pdf