Corporate strategy

Project 5 &6: Fresenius Medical Care AG & Co. KGaA (Corporate, Business, and Functional Level Analysis)

Amilia Lachica


BMGT 495

Professor Stone Logan

April, 5, 2020

Fresenius Medical Care AG & Co. KGAA is a multinational corporation (MNC) that provides kidney dialysis services, products, and care coordination in more than 150 counties under the following major segments; North America, Europe Middle East, Africa, Latin America, and the Asia Pacific. The company utilizes a global strategy whereby it primarily provides the same products with minor modifications. According to chapter 7, a company can engage in various strategies when entering the international market. From this background, Fresenius Medical Care AG & Co. utilizes a combination of strategies in the global market. The company has, over the years, acquired more than  1000 subsidiaries across the world (Forbes, 2019). The company also has the Fresenius Medical Care Ventures unit that focusses on investing in startups in the health care sector. Some notable joint ventures include the Memorial Care Health System in California and the 70% equity interest in Kunming Wuhua Health Hospital in China. Lastly, the company is also involved in exporting products to its subsidiaries and clinics in the segments mentioned above.

Furthermore, Fresenius Medical Care AG & Co. KGAA uses a combination of the following concentration strategies; market penetration, market development, and product development to enter new markets. Market penetration involves using one’s position to position oneself in the market further.  Market development involves selling existing products into a new market (Chapter8, Saylor Org 2014, 243). Initially, the focus of Fresenius Medical Care AG & Co. KGAA was in selling products developed in its German market to the overseas subsidiary. However, with time, the company also developed products for the new markets. For example, care coordination services are limited to the North America segment and Asian market segment. The company has continued to further develop products within care coordination to include endovascular and cardiovascular services, health plan services, hospital-related physician services, and so on  (Fresenius Medical Care AG & Co. KGAA).

Further, Fresenius Medical Care AG & Co. KGAA is involved in vertical integration, backward integration, where it is engaged in supplying products for sale as well as to its clinics. Goldsmith  (n.d.) notes that vertical integration has several benefits, including the ability to offer lower processes, control of the supply chain, and increased power of the market.

Figure 1: Partial SWOT Analysis

INTERNAL under your control  build on STRENGTHS International Strategy source of a large market baseGlobal Strategy: Enables the Co. to enjoy economies of scale because of minor modifications in the final products/services.Acquisition of subsidiaries; Enables the Co. to enjoy a larger market share Joint Ventures: Co. reduced market risks through operating through well-established brands, the company can also work with startups Vertical Integration: Economies of scale, cost savings, and consistent quality.Export; Ensures product reaches a broader market.  minimize WEAKNESSES   Operating in international markets brings a myriad of risks, including market risks, financial risks, political risks, and so on.For example, According to the company’s annual report, there is a lot of uncertainty  regarding “possible future changes in health care regulation, including the regulation of reimbursement for dialysis services in the USA market.”[1]Joint Ventures may be a source of future conflicts.Exporting is expensive, especially if manufacturers do not adhere to export control policies.

Based on the above, the company can reduce the exposure that comes through operating in foreign markets by utilizing strategic partnerships and alliances. Operating under joint ventures, rather than subsidiaries, minimizes the market risks and also other regulatory risks and uncertainties, albeit decreased profits.

The IEF matrix

After listing a; the identifies strength and weakness factors that are derived from the SWOT analysis, a weight ranging from 0.00 to 1.00 is assigned to each indicator. The ratings 1-4 represent the value of the response, where 1 is a major weakness, 2 minor weakness, 3 minor strength, and 4 major strength. The weighted scores are then multiplied by the ratings to arrive at the weighted score. The weighted scores are then summed together to arrive at the total weighted score, which is 2.05, as shown in the table below.

Figure 2: IEF Matrix

StrengthsWeightRatingsWeighted Score
Access to Wide Market0.2040.8
Diversification of Products0.0530.15
strategic Partners0.1040.4
Positive Image and Reputation0.1030.3
Established Brand Name0.0540.2
Vertical Integration0.2040.8
Weakness  0
Exposure to Risks0.2010.2
Potential conflicts from venture partners0.1020.2
Where 1 is Major weakness, 2 is Minor weakness, 3 is Minor strength,  4 is Major strength


Fresenius Medical Care AG & Co. KGAA should continue to acquire strategic partners to diversify its operations. This approach will help minimize exposure to risks. The company should put in place stringent measures, including comprehensive strategic agreements to foster cordial venture relationships. Similarly, the company should ensure compliance with regulatory bodies to prevent regulatory risks.

Grand Strategy Matrix

This tool provides additional alternatives for a firm. Firms fall under four quadrants based on two dimensions; competitive position and market growth. Each quadrant provides a set of possible strategies that the company falls into. Quadrant 1: Strong competitive position and fast market growth; Quadrant two; Weak competitive position and market growth, Quadrant three; Weak competitive position and slow market growth and quadrant four strong competitive position and slow market growth. The quadrants also contain a set of strategies that a company falling into either of the following quadrants should adopt to remain competitive or exit the market.

Analysis of corporate strategies reveals that Fresenius Medical Care AG & Co. KGAA utilizes several strategies that place it within the first quadrant. For instance, market penetration, market development, and product development. The firm also acquires new subsidiaries with the same assortment. Through market development, the company can increase and product development to create a range of products and services.

Additionally, the company utilizes backward integration taking over the activities of suppliers and also related integration by taking actions from fellow companies in the industry. The graph below was plotted based on the factors listed on the IFE matrix above.                                                                                                                                                            

Figure 3: Grand Strategy Matrix                                                                                Implications

The idea behind the above is that Fresenius Medical Care AG & Co. KGAA will not only identify its strategies but also focus on its operations and competitive basis. The company should vertically acquire more firms in the supply chain to earn more profits and control costs. The good thing about the integration is that it is within the line of business; therefore the company can still maintain its core business.

The Company’s Product Line, Target Market

Fresenius Medical Care AG & Co. KGAA is a Kidney dialysis company that provides dialysis care and related services to patients suffering from end-stage renal disease (“ESRD”) plus other health care services. According to the company’s website, the company has been working over several initiates to “promote home dialysis, improve access to transplants, and develop new, value-based care models for chronic kidney disease patients” (Fresenius Medical Care, 2019). The company manufactures and develops a variety of health care products that comprise of dialysis and non-dialysis products. Dialysis products comprise of hemodialysis machines, dialyzers, peritoneal solutions and granulates, bloodlines, renal pharmaceuticals, and systems for water treatment Non-dialysis products include apheresis and acute cardiopulmonary. In addition, the company also provides care coordination in the Asia Pacific and North America segments (Fresenius Medical Care, 2019). Care coordination comprises of delivery of pharmacy care, cardiovascular, vascular specialty services, ambulatory surgical services, health plan services and physician nephrology and cardiology services

Business-Level Strategies

According to Porter, a company can pursue three major business-level strategies to attain a competitive advantage; cost leadership, differentiation, and the focus strategy. In this context, Fresenius Medical Care AG & Co. KGAA utilizes a combination of the above strategies in the market. To begin with, the focus of the company is only in providing dialysis and cardiovascular products and services. Secondly, the company also operates on differentiation, whereby it produces a variety of products and services within the two categories of focus. Lastly, the company differentiates its prices relative to the market it operates in.

Functional  Strategy Analysis

Fresenius Medical Care AG & Co. KGAA is a group of company whose headed by the parent company, which operates under the supervisory Board which oversees the Management Board which consists of eight competent members as follows, the chairman controls all the other operations, the Finance Management, Global Chief of Medical Services, Europe, Middle East, and Africa manager, the North America manager, Research and Development Manager,  Asia Pacific Manager, Global Manufacturer, and Quality and supply. Employees are further grouped into divisional and functional units with people also organized depending on the divisional products and projects. The company has a dedicated team of specialized employees. According to the company’s has outsourced its HR activities to manage recruitment.   The company’s culture is based on the provision of innovative products to promote patient-centered care. Developing innovative products is an inherent part of the company’s strategy of sustainable and profitable growth and also attaining technology leadership in dialysis. The company can develop innovative products because of has partnered with a competent team that is involved in R&D, as well as has in place the  Fresenius Medical Care Ventures fund for identification of startup ventures (Fresenius Medical Care AG & Co. KGAA, 2019).

Some of its operations include manufacturing, which involves the assembly of raw materials into final products, packing, assembling, testing as well as repair and maintenance, which is part of after-sale services. The company has in place arrangements with suppliers to see that the components meet quality and sustainable standards. The company is a market leader and thus enjoys significant income, albeit existing competition. All marketing activities are managed, from individual segments to enable the company to customize its operations in line with the unique needs and preferences of the market. Marketing activities comprise product transportation, sales activities, and pricing of the products. Finance is responsible for billing invoices to various clients. All finance and accounting information is collected in a central database from different clinical locations. This is paramount to acquiring efficiency in line with the company’s mission and vision which is “to provide holistic care and improve outcomes for patients as well as payers and at the same time sustainably increase the company value of Fresenius Medical Care.”


Baxter Renal Care. (n.d.). Retrieved March 22, 2020, from    professionals/renal-care

Corporate culture. (n.d.). Retrieved March 7, 2020, from

Fresenius Corporate Culture. (n.d.). Retrieved March 7, 2020, from   

Fresenius Medical Care Competitors. (n.d.). Retrieved March 7, 2020, from   

Fresenius Medical Care Holdings, Inc. (2019, December 30). Fresenius Medical Care North          America Continues to Support National Kidney Foundation with Record Fundraising. Retrieved March 22, 2020, from          medical-care-north-america-continues-to-support-national-kidney-foundation-with-      record-fundraising-300978591.html

Fresenius Medical Care North America and NKF Announce National Partnership. (n.d.). Retrieved March 7, 2020, from  north-america-and-national-kidney-foundation-announce-national

Genetic Information and the Workplace Report. (n.d.). Retrieved October 16, 2016, from   

Goldsmith, D. (n.d.). Rethinking the Company’s Competitive Advantage. Retrieved March 22,    2020, from      7380/Rethinking the Company’s Competitive    Advantage.pdf?_&d2lSessionVal=RnPCaiaQZZnjGXLraIYLXrvud

Kidney Dialysis Centers Market 2020 Competitors Analysis By Baxter, B. Braun Melsungen        AG, BD, Cantel Medical, DaVita Inc., Diaverum, Dialife SA , Fresenius Medical Care         AG & Co. KGaA. (2020, March 21). Retrieved March 22, 2020, from            competitors-analysis

Kidney Transplant. (n.d.). Retrieved March 7, 2020, from

Mastering Strategic Management. (2014). Chapter 7 Competing in International Markets. Retrieved from

Mastering Strategic Management. (2014). Chapter 8:  Selecting Corporate-Level Strategies. Retrieved from  

Mergent, Inc. (n.d.). Fresenius company details: Synopsis. Retrieved March 7, 2020, from             https://www-mergentonline-  

Medtronic Integrated, Innovative, Value-Based Healthcare. (n.d.). Retrieved March 22, 2020, f   from

National Kidney Foundation. (2019). Fresenius Medical Care North America and NKF    Announce National Partnership. Retrieved March 7, 2020 from   foundation-announce-national

 US Renal Data System 2019 Annual Data Report: Epidemiology of Kidney Disease in the          United States. (n.d.). Retrieved March 7, 2020, from  


All Rights Reserved,