Case Type: New Product
Case Style: Interviewer Led
Industry: Healthcare
Case Type: New Product
Industry: Healthcare
Case by Boston Consulting (BCG)
Our client, Hospital Equipments Co. (HEC) manufactures medical equipments used in surgical procedures. Their flagship product BloodCoagulator is used for catalyzing the clotting process in blood after a medical surgery. Currently the product is sold in liquid vials and applied on wounds using sponge.
R&D team at HEC has recently come up with a new product idea of combining the sponge with a dry BloodCoagulator tablet to form a single product, thus making the final offering independent & ready to use. HEC is considering a deal with sponge manufacturer wherein they are planning to manufacture tablets inhouse & source them to Goodwill sponges (a sponge manufacturer) for manufacturing, marketing & distribution of the final hybrid product. Client has hired us to access this deal & evaluate if it makes sense for them. If so, what terms should they negotiate?
Additional information (To be provided only on request)
- BloodCoagulator is based on a patented formula. It is one of its kind drug and currently enjoys monopoly in its category
- Benefits of the hybrid product –
- Increases operational efficiency in the surgical rooms
- Preferred by customers as there is no need to separately buy the glass vials and the sponges
- No proven improved medical benefit
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THE CASE CONSULTANTS
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This is an interviewer led strategy case where the candidate is required to help HEC in devising the manufacturing & marketing strategy for one of its flagship product. The case has three main components:
- Determine the potential price of the new hybrid product
- Determine how the cost structure for the hybrid product would change from the original products
- Analyze new margin on hybrid product v/s old margins of individual products
- Brainstorm on how the final deal should be structured
The final recommendation must include facts derived using appropriate quantitative & qualitative analysis.