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Biopure Corporation Case Solution

Solution Id Length Case Author Case Publisher
544 1319 Words (4 Pages) John T. Gourville Harvard Business School : 598150
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Biopure is the company associated with research and development of substitute blood in the medical market. Oxyglobin and Hemopure are the two products of the company under discussion. Oxyglobin is a substitute product for animals, and Hemoglobin is made for the human market. The motive of Biopure is to enter the human market with an evolutionary substitute for blood, helping in the transfusion process worldwide. Oxyglobin has been approved by FDA; whereas, the company has to wait for the approval of Hemopure by FDA, a primary requirement before the launch of every medical product. Oxyglobin and Hemopure possess the same physical characteristics and look similar to each other. The launch of Oxyglobin at a low price would result in a lower price expectation for Hemopure, resulting in loss of the potential profitability of the company. The timing and pricing of Oxyglobin should be designed in such a way that the potential of Hemopure is not jeopardized in the market.

Following questions are answered in this case study solution:

  1. How do you assess BioPure’s potential in the human market, the animal market?

  2. What are the biggest obstacles to Biopure’s success in the human market, the animal market?

  3. How might Oxyglobin be a threat to Hemopure? How might it be an asset to Hemopure?

  4. What should Biopure do regarding the commercial release of Oxyglobin? If they release, what price should they set? How should it be distributed?

Biopure Corporation Case Analysis

1. How do you assess BioPure’s potential in the human market, the animal market?

According to the market analysis, the potential of Biopure in the human market is about 14 million units per year on average. This can be broken down to the categories of units required in the field of surgery, serving anemic patients and the blood that is not transfused. The products of Hemopure are not contaminated. It has a shelf life of 2 years and exhibits universal attributes due to the fact of less rejection. All the characteristics mentioned above are enlarging the potential market of Biopure. In addition to this, Biopure has a competitive advantage over its competitors due to its large supply of Hemopure; whereas, its competitors lag in the supply along with the high percentage of rejected units. The characteristics of the competitors’ products are not up to the mark and so this lapse can be fulfilled by Biopure.

Animal market analysis resulted into the conclusion that the potential of Biopure in it is about 350.000 units per year on average. This can be broken down into the categories of units required in the field of veterinary practices, primary care and emergency care. In comparison to its competitors, Biopure has a competitive advantage over its competitors for the reason that the entry of the new arrivals in the animal market requires FDA’s approval, which is a time taking process and the company can take full advantage of the absence of the competitors in this segment. The increased effectiveness of Oxyglobin is one of the reasons of its popularity that seems to increase potential in the market for the product. The success of the Biopure’s products has a great potential because there is a need in the market to have blood substitutes in cases when blood is not available.

2. What are the biggest obstacles to Biopure’s success in the human market, the animal market?

The obstacles of Biopure’s success in the human market include its acceptance by the medical specialists to use it in human cases as a blood substitute. The final approval by the FDA might remove this obstacle, but the approval from the FDA itself is another obstacle. FDA consumes a lot of time in the process of approval. Biopure, in order to be successful in the human market, needs to keep its competitors at bay in order to hold a strong position in the market in the near future. Another obstacle is the proposed price of the Hemopure, which is very high for consumers as compared to the donated blood. In addition to that, the negative perception associated with the blood substitute as of coming from the blood of “cow” might not be easily digestible for them. The customers and/or the consumers might show a high degree of resistance for getting transfused with a blood substitute rather than the blood itself.

In case of the animal market, the vets, responsible for the blood transfusion might be resistant to use blood substitutes like Oxyglobin in the animals. The reason behind this might be the perception that the blood substitute has a source from a “dog” or an animal. Other obstacles may include maintaining and managing the production capacity at Biopure when Oxyglobin would be introduced. The company’s production facility might constrain the supply of Hemopure, and this will create an effect on the prices of both the products of Biopure. The first launch of any of the product in the market would be responsible to shape the perception of the latter product in the market positively or negatively with its success and usage among the masses.

3. How might Oxyglobin be a threat to Hemopure? How might it be an asset to Hemopure?

The biggest threat that Oxyglobin is imposing on Hemopure is change and deficit in the price of the Hemopure after the introduction and production of Oxyglobin. This price change in both the products of Biopure is due to the limited production facilities available at the company. Oxyglobin would be a threat to Hemopure as it would create an impression of Hemopure being the same as Oxyglobin that is a source of blood from a “dog”. This could lead to a negative perception among the customers and would need to be worked on. The failure of Oxyglobin at its launch might also have detrimental effects at the launch of the Hemopure putting it in a weak position in the market.

Oxyglobin can be considered as an asset to Hemopure since it will help in test marketing of the product in terms of production, distribution and sales. This would also be a source of revenue generation in the company that could be utilized in other areas of the company to give it a boost as a whole. Oxyglobin can help create a good impression in the market about the company and the product itself which will set the stage for the entry of Hemopure with ease and it would take less effort to establish Hemopure as a brand.

4. What should Biopure do regarding the commercial release of Oxyglobin? If they release, what price should they set? How should it be distributed?

Biopure should go with the launch of Oxyglobin first as it will help create a smooth base for Hemopure launch in the market. This would enable the company to make a reputation in the market that will help promote the second product of the company i.e. Hemopure. The profit created from the sale of Oxyglobin could be utilized to help launch Hemopure and ease the production capacity of Biopure to generate profits from both the products in totality.

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