Biopure Case Study Analysis DRAFT 3

Topics: Blood transfusion, Blood, Marketing Pages: 5 (1208 words) Published: December 5, 2014
I: Analysis

Oxyglobin’s Immediate Launch
It is our recommendation that Biopure should immediately launch Oxyglobin. The reasons for this decision are as followed:

Obtaining the Monopoly on blood substitutes - If Biopure waits to launch Oxyglobin they will miss a prime opportunity to control the blood substitute market, especially the animal market. As mentioned in the case, Biopure’s competitors have yet to launch their products. Furthermore, Baxter International and Northfield Laboratories do not have an animal substitute for Biopure to compete with1. This allows Oxyglobin to set the stage for Biopure to introduce their company as a leading producer of a successful blood substitute. This can form a level a trust and reliability among medical professionals, which can be significant once Hemopure is released.

Revenue built up for Hemopure - Immediately releasing Oxyglobin would benefit Hemopure’s launch and both products production in the coming years. Both Hemopure and Oxyglobin are in need of their separate manufacturing facilities. As of now, they are produced in the same manufacturing facility and only one substitute can be made at a time due to the limited supplies Biopure owns.2 The revenue from Oxyglobin can help Biopure procure a site solely for Hemopure’s production, which will increase the amount of each product made every year. If both products were to launch at the same time and were equally successful, Biopure would lack the capacity to make enough volume of each substitute in a timely manner. This issue could eventually affect our sales and market share. The income from Oxyglobin can also benefit in the advertising, promotion and the sales force needed to sell Hemopure once it is ready to be released. Since Hemopure’s blood substitute will be targeting a much larger market, the advertising and education of the product will be more extensive and more expensive. In terms of the sales force, Biopure will need highly educated and skilled people to advocate for Hemopure. They will also need to hire a large sales force to cover each region of the U.S. This requires money, which can be obtained from Oxyglobin’s success.  

Of course, all of these reasons why Oxyglobin should be launched immediately are contingent on the success of the product. It is assumed that Oxyglobin will be in high demand from veterinarians and pet owners and if our marketing strategy we have proposed is successful the demand will grow rapidly.

Market potential of Oxyglobin and Hemopure
In 1995, the total demand in dog blood transfusion market was 354,750 units of red blood cells (RBCs).3 Although only about 2.5% of dogs suffering from acute blood loss received a transfusion, about 30% of these dogs would have benefited significantly from this procedure. That is to say, the dog blood transfusion market could be 12 times larger than it was at that time. In spite of the fact that dogs only represented roughly 50% of patient volume, the animal blood transfusion market was still attractive to Biopure. Oxyglobin could be a competing product in the market because there was high level of dissatisfaction with the previous blood transfusion alternatives caused by a long recovery time of the animal patient.   As for the human blood transfusion market, there were 11.3 million units of RBCs were transfused into 4 million patients in 1995. The demand for the RBCs was expected to rise with the aging U.S. population. With the maximum capability of producing 150,000 units of Hemopure annually, Biopure was supposed to easily find a niche market with around 1.3% market shares in this lucrative battlefield. Additionally, the unique strength that Hemopure is shelf-stable at room temperature would consolidate Biopure’s position in the human blood transfusion market.

Impact of Oxyglobin’s pricing on Hemopure
The impact of Oxyglobin’s pricing on Hemopure might not be as serious as the vice president of Human Clinical Trials predicted. First, the...
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