1) Analyses mentioned in the case suggested that the market for in-house diagnos
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Question
1) Analyses mentioned in the case suggested that the market for in-house diagnostics would grow in the next five years. A) True B) False
2) 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
3) Veterinary clinics found that having diagnostic equipment in-house led to a lower volume of testing. A) True B) False
4) Which of the following are true about Bergerac's competitors? (select all that apply) A) Idexx had the largest product line and the best-established distribution network and sales force B) Bergerac's OmniVue product was at a higher price point than the comparable system offered by Abaxis C) Bergerac was the market share leader in the veterinary diagnostics instruments market D) Bergerac saw an opportunity for itself to capture market share in small- and medium-sized veterinary practices For the exclusive use of Y. Sherhan, 2018. HARVARD?BUS'NESS!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. yckoff's mind as he returned to the proposal he had started iVue cartridges conducted recommended that Bergerac build a cartridge The customer feedback was fresh in W reviewing that morning. It summarized the "make vs. buy" analysis for Omni by his director of planning, Bob McCarthy. McCarthy fabrication unit within its own plant rather than acquire GenieTech, one of the company's two cartridge suppliers. The decision between in-house development and external acquisition was critically important Bergerac was growing fast-averaging 17% annually since 2007-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 bya temporary stock-out at their distributor. To maintain for potential customers to have full confidence in the company's ability to deliver on its p Furthermore, the contract with the other cartridge supplier, Elsinore Plastics, would come up for renegotiation in August 2010-a mere three weeks away Bergerac's growth trajectory, it was imperative 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 (see Exhibit 1 for data on US veterinary spending. Several factors drove this growth. First, pet ownership had increased steadily since the late 1980s, rising 6 points to Nearly 73 million US. HRS Professor David A. Garvin and wnterSunna Yor% propared as abatis fordas resemiblance to actual psons or entities is coincsdental. There are oxcasional refeeveces to actual companies in the narration Copyright 0 201 President and Felloes of Harvand College. To onder copios or ogusest permission to mproduce materials, call 1-800-545-7685, this case solely as a basis for class discussion and not as an enudonement, a source data, or an ustration of eflective or ineffective managrment This case, though based on real evenls, is fictionalined, and any Business Pubilishing, Boslon, MA 02163 or go to http//www.hbsp harvard.edu. This publication may not be digitized, or transmittnd, without the permission of Harvard Business School. wrile Harvard or othervise reproduced posled, a authorized for use only by Y ouset Shorhan in Service Operations Management (MGT 3121) taught by Cory Labanow, CUNY-Baruch College trom January 2018 to 2018.
Explanation / Answer
1) Analyses mentioned in the case suggested that the market for in-house diagnostics would grow in the next five years.
A) True
B) False
A) True. The Industry analysts had projected 8 to 10% annual growth for the in-house diagnostics market in North America over the next 5 years.
2) 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
A) True. The decision between in house development and external acquisition was to be made quickly as the supply of OmniVue cartridges was observed to be inconsistent in the recent months. Many customers were facing a stock-out of the cartridges by the distributors.
3) Veterinary clinics found that having diagnostic equipment in-house led to a lower volume of testing.
A) True
B) False
B) False. The veterinary clinics were adopting in-house equipment development, as that would facilitate the testing and consumer service. In house analyzers will facilitate the veterinarians to conduct several kinds of tests like test for preventive care, geriatric testing, general screening, etc.
4) Which of the following are true about Bergerac's competitors? (select all that apply)
A) Idexx had the largest product line and the best-established distribution network and sales force
B) Bergerac's OmniVue product was at a higher price point than the comparable system offered by Abaxis
C) Bergerac was the market share leader in the veterinary diagnostics instruments market
D) Bergerac saw an opportunity for itself to capture market share in small- and medium-sized veterinary practices
Idexx was one of the major competitor of Bergerac. It was the industry leader and had the largest production line, best distribution network and sales force. Also it had an established brand name. Hence Statement A is True.
Bergerac’s OmniVue was priced below the pricing offered by Abaxis and that was the main reason that it was popular among veterinarians. Hence Statement B is False.
Idexx was the market leader in the veterinary diagnostics instruments market and not Bergerac. Hence Statement C is False.
Bergerac believed that as penetration of market increases, they can capture shares, particulary with products and pricing that work well for small and medium practices. Hence Statement D is True.
So, Statements A and D are true and applicable in this case.
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