Ring Medicals Case Analysis
| Case Analysis Ring Medicals | | | | |
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Major Issues
Paul Ruggieri; President and CEO of Ring Group strongly believed that the HCS-100 product could well represent the single major opportunity for the company to turn profit however this is with some major issues faced by the firm which includes, * An average of two to three units a month are expected to sold which would yield a total revenue of $150,000 per month at average gross margin of nearly 50%. As of April 1988, only 5 systems where sold versus a budgeted sales of over 30 annually. Revenues totaled about 15% of the targeted annual amount of over $1.7 billion. * The company appointed 8 manufacturers rep with 20% commission on sales however the sales through them was only one system. The reason was highlighted as lack of consistency in the product policy, pricing and customer support in the region. * Scanvest Ring had spent an excess of $700,000 on the HCS-100 effort and the board of members are hesitant to invest any further in this as there is no good result with the investments made as of now. * The price of Ring ACD which was priced 50% - 80% above the US competition. * Management unwillingness to allow Ring Group to make revision in Scanvest Ring or to customize it. * Disagreement in the most appropriate distribution channel wherein three thoughts prevailed in them.
Actionable Recommendations
HCS-100 served to improve the cost and effectiveness and quality of communication in hospital operations. This is an high-end product for communication which doesn’t suit all hospitals however works best for large and medium sized hospitals. This should be supported with the calculations that support the effectiveness of its installation and the returns.
The distribution channel that will be effective for the HCS-100 will be through telecommunication distributors through Introlink who have experience in the Healthcare customers with reasonable clientele.
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Major Issues
Paul Ruggieri; President and CEO of Ring Group strongly believed that the HCS-100 product could well represent the single major opportunity for the company to turn profit however this is with some major issues faced by the firm which includes, * An average of two to three units a month are expected to sold which would yield a total revenue of $150,000 per month at average gross margin of nearly 50%. As of April 1988, only 5 systems where sold versus a budgeted sales of over 30 annually. Revenues totaled about 15% of the targeted annual amount of over $1.7 billion. * The company appointed 8 manufacturers rep with 20% commission on sales however the sales through them was only one system. The reason was highlighted as lack of consistency in the product policy, pricing and customer support in the region. * Scanvest Ring had spent an excess of $700,000 on the HCS-100 effort and the board of members are hesitant to invest any further in this as there is no good result with the investments made as of now. * The price of Ring ACD which was priced 50% - 80% above the US competition. * Management unwillingness to allow Ring Group to make revision in Scanvest Ring or to customize it. * Disagreement in the most appropriate distribution channel wherein three thoughts prevailed in them.
Actionable Recommendations
HCS-100 served to improve the cost and effectiveness and quality of communication in hospital operations. This is an high-end product for communication which doesn’t suit all hospitals however works best for large and medium sized hospitals. This should be supported with the calculations that support the effectiveness of its installation and the returns.
The distribution channel that will be effective for the HCS-100 will be through telecommunication distributors through Introlink who have experience in the Healthcare customers with reasonable clientele.