1) Which of the following are true about Bergerac\'s competitors? (select all th
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1) 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
2) Which of the following statements are true of Bergerac's cartridge sourcing and production processes? (select all that apply) A) It was difficult for cartridge suppliers to respond to unexpected spikes in demand B) Despite dependencies on petrochemical prices, plastics suppliers enjoyed a market with very high margins C) Bergerac sourced the plastic parts for its cartridges from only one supplier--GenieTech D) Bergerac had to carry more inventory than they would like
3) Which of the following statements are true of the build vs. buy decision? (select all that apply) A) Bergerac's business already accounted for more than 90% of GenieTech's revenue B) McCarthy's analysis assumed a ~8% annual growth in production demand in the years ahead C) McCarthy calculated more annual savings with the in-house option at current rates of production D) In the "build" option, the machinery Bergerac would use would be less efficient than what GenieTech uses For the exclusive use of Y. Sherhan, 2018. HARVARD? BUS". E S S 1 SCHOOL BRIEF CASES 4381 Bergerac Systems: The Challenge of Backward Integration Introduction In July 2010, lan Wyckoff, CEO of Bergerac Systems, scribbled a few notes about his latest meeting with a group of veterinarians. These were his customers, and they provided direct feedback on their latest experiences with Bergerac's diagnostic instruments for animal care. The feedback was always valuable, although on this visit it was not entirely positive. The customer feedback was fresh in Wyckolf's mind as he returned to the proposal he had started reviewing that morning. It summarized the "make vs. buy" analysis for Oemni Vue 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 development and exdernal acquisition was critially important. Bergerac was growing fast-averaging 17% annually since 2017-bul 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 Furthermore, 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 to8%per year overthe prior decade (see Exhibit 1 for data on US vetrinary drove this growth First pet ownershi more than 62% of households. Nearly 73 million US households had one or more pets and the average p had increased steadily since the late 1980s, rising 6 points to David A
Explanation / Answer
A) False OmniVue prices were slightly below
B) False Idexx Labs was the industry leader
c) True and also the strongest brand name
D) True Due to shift to In clinic laboratories by small and medium players and cost effectiveness of their product
2A) True
2B) False. They had low margins and lacked capital to be able to take advantage of input prices.
2C) False Genie tech and Elsinore Plastics
2D) False. They faced shortage due to stock out at genietech forcing consideration of manufacturing
3A) False. 50% rest was from contractual supplies to other players.
3B) True. Fuelled by increased pet ownership and demand for adequate healthcare.
3C) True Refer Exhibit 4
3D) False. Being the latest it would be faster and more efficient and cost effective
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