biopure final
TRANSCRIPT
BIOPURE – STRATEGIC BIOPURE – STRATEGIC MARKETINGMARKETING
BA 160 – MarketingBA 160 – Marketing
Berkeley, 07-17-2002Berkeley, 07-17-2002 Lars Eiermann, Eric Hirschberger, Alexander Lars Eiermann, Eric Hirschberger, Alexander Mantzsch, Mantzsch, Carsten Müller, Kristian Radic, Carsten Müller, Kristian Radic,
Malte von RedenMalte von Reden
07-17-2002 2Biopure Marketing Strategy
AGENDAAGENDA
I. I. IntroductionIntroductiona.a. Product comparisonProduct comparison
b.b. Key issuesKey issues
II.II. Qualitative points of viewQualitative points of viewa.a. SWOT analysisSWOT analysis
b.b. Value benefit analysisValue benefit analysis
III.III. Quantitative points of viewQuantitative points of view
a.a. Break even analysisBreak even analysis
IV.IV. Strategic recommendationStrategic recommendation
07-17-2002 3Biopure Marketing Strategy
INTRODUCTIONINTRODUCTION
To February 1998 Biopure had spent over $ 200 million on To February 1998 Biopure had spent over $ 200 million on developing Hemopuredeveloping Hemopure
During the development process Oxyglobin was discoveredDuring the development process Oxyglobin was discovered
Biopure has not brought a product to market yetBiopure has not brought a product to market yet
Funds are sufficient to operate for two more yearsFunds are sufficient to operate for two more years
Hemopure will probably receive approval during 1999 Hemopure will probably receive approval during 1999 while Oxyglobin is approved and ready to launchwhile Oxyglobin is approved and ready to launch
07-17-2002 4Biopure Marketing Strategy
GENERAL BENEFITS OF BLOOD SUBSTITUTESGENERAL BENEFITS OF BLOOD SUBSTITUTES
Blood substitutes are universalBlood substitutes are universal
Free of threads like AIDSFree of threads like AIDS
Storable for up to 2 yearsStorable for up to 2 years
Immediately 100% efficient at transporting oxygenImmediately 100% efficient at transporting oxygen
Further benefits due to smaller moleculesFurther benefits due to smaller molecules
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PRODUCT COMPARISON - HEMOPUREPRODUCT COMPARISON - HEMOPURE
mediummedium lowlowhighhighmediummediumprocuremeprocurement costs of nt costs of
basisbasis
Seasonal Seasonal variationsvariations NoneNoneOutdated blood Outdated blood
containerscontainersOutdated blood Outdated blood
containerscontainers
potential potential bottleneckbottleneck
ss
human bloodhuman blood cattle cattle bloodblood
Outdated Outdated human bloodhuman blood
Outdated Outdated human bloodhuman bloodOriginOrigin
2 - 4° C2 - 4° C 2 - 30° C2 - 30° C< 4° C < 4° C < 4° C < 4° C storage storage
temperaturtemperaturee
REGULAR REGULAR BLOODBLOOD
BIOPUREBIOPURE
HemopureHemopure
NORTHFIELNORTHFIELDD
PolyHemePolyHeme
BAXTERBAXTER
HemAssistHemAssistCriterionCriterion
$ 125 - 425$ 125 - 425 $ 600 - 800$ 600 - 800$ 600 - 800$ 600 - 800$ 600 - 800$ 600 - 800PricePrice
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PRODUCT COMPARISON - OXYGLOBINPRODUCT COMPARISON - OXYGLOBIN
CriterionCriterion Regular BloodRegular Blood OxyglobinOxyglobin
Storage Storage temperaturetemperature
2 - 4° C2 - 4° C 2 - 30° C2 - 30° C
OriginOrigin Donator animalsDonator animals Cattle bloodCattle blood
PricePrice $ 50 - 100$ 50 - 100 $ 100 - 200$ 100 - 200
Many advantages of Oxyglobin compared to regular blood
Oxyglobin is ready to launch
07-17-2002 7Biopure Marketing Strategy
KEY ISSUES IKEY ISSUES I
Should BIOPURE introduce Oxyglobin at all?Should BIOPURE introduce Oxyglobin at all?
Opportunitiesin market
RevenuesExperience /Best practice
Ability tospread risk
Reasons for the introduction of products in general
Oxyglobin should be introduced!Conclusion
07-17-2002 8Biopure Marketing Strategy
KEY ISSUES IIKEY ISSUES II
When would be the best point of time to introduce When would be the best point of time to introduce Oxyglobin?Oxyglobin?
February 1998 late 1999
07-17-2002 9Biopure Marketing Strategy
AGENDAAGENDA
I. I. IntroductionIntroductiona.a. Product comparisonProduct comparison
b.b. Key issuesKey issues
II.II. Qualitative points of viewQualitative points of viewa.a. SWOT analysisSWOT analysis
b.b. Value benefit analysisValue benefit analysis
III.III. Quantitative points of viewQuantitative points of view
a.a. Break even analysisBreak even analysis
IV.IV. Strategic recommendationStrategic recommendation
07-17-2002 10Biopure Marketing Strategy
SWOT ANALYSIS - BIOPURESWOT ANALYSIS - BIOPURE
Strengths Weaknesses
Opportunities Threads
07-17-2002 11Biopure Marketing Strategy
S
TO
W
STRENGTHSSTRENGTHS
+ Time & Time & development development advantage on advantage on animal animal marketmarket+ Both products are Both products are
nearly nearly identical in identical in terms of terms of
production production processesprocesses+ Funds are Funds are sufficient for sufficient for 2 2 yearsyears
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S
TO
W
WEAKNESSESWEAKNESSES
-Dissension within Dissension within BIOPURE’ s top BIOPURE’ s top managementmanagement
-No distribution networkNo distribution network
-No experience in going No experience in going to to marketmarket
-Stockholders with high Stockholders with high expectationsexpectations
-Enlargement of Enlargement of production production plant plant needed for expansionneeded for expansion
07-17-2002 13Biopure Marketing Strategy
S
TO
W
OPPORTUNITIESOPPORTUNITIES
+ Innovative productInnovative product+ Demand on blood Demand on blood that that cannot be cannot be satisfied due to satisfied due to
periodic shortage periodic shortage and and anemia anemia+ High benefits for High benefits for
autologous autologous donatorsdonators
07-17-2002 14Biopure Marketing Strategy
THREADSTHREADS
S
TO
W
- Uncertain market Uncertain market priceprice
- Hemopure’s market Hemopure’s market entry entry depends on the FDA depends on the FDA approval processapproval process
- Competitor with Competitor with production production capacity three times capacity three times larger, larger, established established distribution distribution network and additional network and additional
products in other products in other marketsmarkets
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VALUE BENEFIT ANALYSISVALUE BENEFIT ANALYSIS
129129
88
44
88
88
5050
2525
1 x 26 = 261 x 26 = 26
OxyglobinOxyglobin
laterlater
171171
44
88
1616
1616
2525
5050
2 x 26 = 522 x 26 = 52
OxyglobinOxyglobin
ASAPASAP
100100
44
44
88
88
2525
2525
2626
RatingRating
∑∑
Flexibility of production Flexibility of production plant & administrative effortplant & administrative effort
Usage of production capacityUsage of production capacity
Customer AwarenessCustomer Awareness
Position in MarketPosition in Market
Pricing of HemopurePricing of Hemopure
Generate revenues / profitGenerate revenues / profit
Gain of experienceGain of experience
CriterionCriterion
07-17-2002 16Biopure Marketing Strategy
AGENDAAGENDA
I. I. IntroductionIntroductiona.a. Product comparisonProduct comparison
b.b. Key issuesKey issues
II.II. Qualitative points of viewQualitative points of viewa.a. SWOT analysisSWOT analysis
b.b. Value of benefitValue of benefit
III.III. Quantitative points of viewQuantitative points of view
a.a. Break even analysisBreak even analysis
IV.IV. Strategic recommendationStrategic recommendation
07-17-2002 17Biopure Marketing Strategy
BREAK EVEN POINTS FOR DIFFERENT PRICESBREAK EVEN POINTS FOR DIFFERENT PRICES
Assumption : Marketing costs = 5% of max. revenue
0
5
10
15
20
25
0 30 60 90 120 150 180 210 240 270
Units [1000]
Cos
ts [M
]
Contribution $100
Fix Costs
Contribution $150
Fix Costs
Contribution $200
Fix Costs
07-17-2002 18Biopure Marketing Strategy
„„BREAK-EVEN PERCENTAGE“BREAK-EVEN PERCENTAGE“
0%
10%
20%
30%
40%
50%
60%
70%
100 150 200
Selling Price in $
Use
of
Cap
acit
y
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PRICING OF OXYGLOBINPRICING OF OXYGLOBIN
Oxyglobin should be introduced at a price of $ 200 Oxyglobin should be introduced at a price of $ 200 per unitper unit
Demand exceeds break-even pointDemand exceeds break-even point
Pet Owners are willing to pay even morePet Owners are willing to pay even more
Price Range of Oxyglobin - HemopurePrice Range of Oxyglobin - Hemopure
Assuming maximum sales, profit turns out to be $ Assuming maximum sales, profit turns out to be $ 37.050.000 p.a.37.050.000 p.a.
Influence of Oxyglobin’s price on Hemopure is questionable Influence of Oxyglobin’s price on Hemopure is questionable
07-17-2002 20Biopure Marketing Strategy
AGENDAAGENDA
I. I. IntroductionIntroductiona.a. Product comparisonProduct comparison
b.b. Key issuesKey issues
II.II. Qualitative points of viewQualitative points of viewa.a. SWOT analysisSWOT analysis
b.b. Aspects of different optionsAspects of different options
III.III. Quantitative points of viewQuantitative points of view
a.a. Break even analysisBreak even analysis
b.b. NutzwertanalyseNutzwertanalyse
IV.IV. Strategic recommendationStrategic recommendation
07-17-2002 21Biopure Marketing Strategy
STRATEGIC RECOMMENDATIONSSTRATEGIC RECOMMENDATIONS
Introduce Oxyglobin as soon as possible at $ 200Introduce Oxyglobin as soon as possible at $ 200
Launch a market research to receive more detailed Launch a market research to receive more detailed information on the Hemopure marketinformation on the Hemopure market
Marketing department should distinguish Oxyglobin and Marketing department should distinguish Oxyglobin and Hemopure as two independent productsHemopure as two independent products
Advertisement for Oxyglobin should consist of adds in Advertisement for Oxyglobin should consist of adds in veterinary journals and practices as well as of attendance veterinary journals and practices as well as of attendance at veterinary trade showsat veterinary trade shows
