Augustine Medical Case Study

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The Bair Hugger Patient Warming System is marketed to hospitals in the United States. It is a device that has been designed specifically to treat hypothermia which many patients suffer from after operations. The Warming system is composed of two elements; there is a heater/blower unit and disposable warming covers. The ultimate problem facing Augustine Medical, Inc. is how to price theses two components of the product and how to position it compared to its competitors. There are many substitutes available for hospitals to treat and prevent hypothermia. However, there are many disadvantages to the variety of other devices which virtually treat the same condition. Augustine Medical believes that their product is superior to their competitors’ products.

S.W.O.T analysis of The Blair Hugger Patient Warming System

Medical research indicates that between 60 -80% of recovery room patients suffer from hypothermia. Although this is unfortunate for the patients it is a strength for the company as they have a target market. The product has been designed to allow nurses and doctors to have easy access to the disposable warming covers which are placed in the top of the blower unit. Also the unit is easy to transport as it can be moved easily as it is on wheels. Hospital staff see this product one that will make the patient feel comfortable and will speed up the patients recovery process. The product also does not burn the patient and water leaks are not an issue. As well as this the product reduces the risk of cross contamination as the blankets are disposable.

The warming covers needed in order to use the product will need to be restocked a lot of the time. The warming time per patient is about two hours this could pose a problem for patients because the results of the use of the device is not seen until two hours later and patients hypothermia may have gotten worse.Also this product is the only product the company have and thus demand is vital for success.

Augustine Medical incorporated sees the opportunity to market their product to hospitals and the company believe that their product had superior advantages over competing products. If the decide to sell the unit for free to the hospitals and the hospitals would purchase the blankets they could create a monopoly.

There is much competition available for hospital to use. Many cheaper alternatives exist. There are several surface warming technologies that are already on the market such as water circulating blanket and the simplest form of treatment for hypothermia is warmed hospital blankets. A main competitor that may exist in the future for the company is the Hosworth-Climator who produce a similar product in England and they could be distirbuting their product in the U.S. within the next year. However if the company price the unit and blankets too high they will be at risk of failing.

Market research:

Medical research indicates that 60 to 80% of all prospective recovery room patients are clinically hypothermic. There are several factors which contribute to postoperative hypothermia. These factors are:
1. Patients exposure to cold operating room temperatures
2. Heat loss due to evaporation of the fluids used to scrub patients
3. Evaporation from the exposed bowel
4. Breathing of dry anesthetic gases

Market size:

Research commissioned by Augustine Medical Inc. indicated that there are 31,365 postoperative recovery beds and 28,514 operating rooms in hospitals in the United States. Given the demand for the postoperative recovery room beds, the research indicates that hospitals with fewer than seven beds would not be highly receptive to the Bair Hugger Patient Warming System. The firm also projected that one system would be sold for every eight postoperative recovery room beds.

Target market:

The target market for this product is hospitals with seven or greater recovery room beds. Target market...
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