1) Bergerac needed to make a decision quickly about in-house development or exte
ID: 325932 • Letter: 1
Question
1) Bergerac needed to make a decision quickly about in-house development or external acquisition due to inconsistency in the supply of cartridges. A) True B) False 2) Veterinary clinics found that having diagnostic equipment in-house led to a lower volume of testing. A) True B) False3) Analyses mentioned in the case suggested that the market for in-house diagnostics would grow in the next five years. A) True B) False
4) Which of the following are true about Bergerac's competitors? (select all that apply) A) Bergerac's OmniVue product was at a higher price point than the comparable system offered by Abaxis B) Bergerac was the market share leader in the veterinary diagnostics instruments market C) Idexx had the largest product line and the best-established distribution network and sales force D) Bergerac saw an opportunity for itself to capture market share in small- and medium-sized veterinary practices For the exclusive use ot Y. Sherhan, 2018. MARVARD BUSINESS Sc H O OL BRIEF CASES 4381 Bergerac Systems: The Challenge of Backward Integration Introduction In July 2010, lan Wyckof, CEO of Bergerak Systems, scrilbled a few notes about his latest meeting with a group of veterinarians. These were his customers, and they provided direct feedback on thelr latest experiences with Bergerac's diagnostic instruments for animal care. valuable, although on this visit it was not entirely positive. The feedback was always The customer feedback was fresh in Wyckoffs mind as he returned to the proposal he had started reviewing that morning, It summarized the "make vs. buy" analysis for OmniVue cartridges conducted by his director of planning, Bob McCarthy. McCarthy recommended that Bergerac build a cartridge fabrication unit within its own plant rather than acquire GenieTech, one of the company's two current cartridge suppliers The decision between in-house and external acquisition was critically important. Bergerac was growing fast-averaging 17% annually since 20r-but it remained a small player with limited resources in a very competitive market and Wyckoff was determined to avoid a costly mistake. He had to make a decision quickly, as the supply of OmniVue cartridges had been inconsistent in recent months. Indeed, the veterinary practice that Wyckoff had just visited had recently been frustrated by a temporary stock-out at their distributor. To maintain Bergerac's growth trajectory, it was imperative for potential customers to have full confidence in the company's ability to deliver on its promises Purthermore, the contract with the other cartridge supplier, Elsinore Plastics, would come up for renegotiation in August 2010-a mere three weeks away Market Overview: Evolution of Pet Diagnostics In 2010, veterinary spending in the United States was expected to be $13 billion, having grown 7% to 8% per year over the prior decade (ses. Exhibit i ir data on US veterinary spending , Seeral actos drove this growth. First, pet ownership had increased steadily since the late 1980s, rising 6 points to more than 62% of households. Nearly 73 million US households had one or more pets, and the average esemblance to actual pesons or entities is coincidental There are accanional rederenes to actual companks in the narreltion Copigh o 3011 Presidest and Fellows of Harvand College. To onder copies or mquent perminion to eprodace materials call 1-4800-545-7685, wie Harvard Busines Puiblishing Soston, MA 0 or go to hitp//www.hbep hervard ode This pubication may not be digtined photocogpinl, or othenwise reproduced posted o teansmitied, without the pominicn of Harvard Business Schol oument is authorized or use only by Ybuset Sherhan in Service Operations Management (MGT 3121) taught by Cory Labanow, CUNY-Baruch College from Jenuary 2018 to May 2018
Explanation / Answer
Index has the largest product line and best established distribution network and sales force.bergerac saw an opportunity to grow.
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