Biopure Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem

Biopure Corporation, a small firm in the bio pharmaceutical industry is facing challenges regarding the decision of launching a new product Oxyglobin in the veterinary market. The company has gained FDA approval for this product and wants to launch it immediately, but the decision has to encounter some other related issues that are also important to address in order to take this decision.

Sub-Issues

There are a few sub-issues that the company needsto address in order to take the above mentioned decision. The company is in the process of gaining approval for Hemopure, an identical product of Oxyglobin in the human market. However, launching Oxyglobin and Hemopure in a sequence is posing a threat of product cannibalization as Hemopure is considered as a high-margin product, but the launch of Oxyglobin will reduce its worth and the consumers may perceive it as a low-price product. Secondly, the decision regarding the timing of the release of Oxyglobin is also an issue that the company needs to address.

Causes & Complications

To identify the causes and complications of the issues or the decision, it is important to analyze the market of both the products.

Launching product in the veterinary market is an opportunity that needs to be evolved as it has no significant competition and the market is open to exploit. The competition is low and is expected to stay low in the near future as well, which gives this opportunity a relative strength.

However, the current processes are not efficient in the market and have created lots of dissatisfaction amongst the veterinarians who are demanding a new and reliable product or an effective blood substitute. However, the price sensitivity in the market is very high as insurance is not a common phenomenon is the market for pets. On the other hand, the human market is very attractive as far as margins are concerned and is big in size as well. The blood substitutes offer more advantages in this market, which is a clear indication of the demand of the product which is also subject to increase rapidly in the coming years.

However, completion is present in the market, but there is a limited number of computers in the industry. The demand is increasing because the donors are decreasing while the recipients are growing. Thus, this is also a concerning factor regarding the decision as to launch the product now or should delay the decision. The company is desperately aiming to launch a new product in the market to increase its presence and achieve high-margins.

The reasons are clear as the company has failed to generate profits at regular intervals for the past ten years. The revenue stream is in very poor shape but the company has funds availablethat are around $50 million that are enough to support operations for a period of two years. However, the company needs to get into the market to increase its prominence, but lack of experience is also a concerning factor.

Analysis

The company possesses the approval of FDA for Oxyglobin which is the major advantage for the company and the reason to launch the product immediately. Secondly, the strength lies in the aspect that it is the first blood substitute in the veterinary market that will allow the product to gain first mover advantage. On the other hand, the shelf-life of the product is also strong as it can survive for two years at room temperature. Furthermore, there is a strong willingness from the veterinarians and the customers to test this new product as dissatisfaction with the current products is very high.

The company is not having the complete utilization of the production capacity, which is not completely utilized. Secondly, the company is also restricted due to the size of its production capacity as it cannot manufacture both the products, Hemopure and Oxyglobin at the same time. On the other hand, it is uncertain to say that what will be the social acceptance of the product as it is the first product of its kind that is why the uncertainty lies in its social acceptance. Furthermore, the price expectation for Hemopure is to some extent unrealistic that can be accounted as a weakness and the company lacks experience in terms of market which is also a major weakness of the company.

No blood substitutes in the veterinary market are currently present that provides the company with an opportunity to explore and exploit as Oxyglobin is the first product of its kind that the company has manufactured. The success of Oxyglobin will help the company in establishing a strong brand name for itself and create a customer base and strong presence in the market. This will allow the company to leverage its brand image and launch Hemopure in the human market and decrease the risk of failure to some extent....................

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