Biopure Corporation

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to spend on the product due to relatively higher costs and lack of pet insurance.

SWOT Analysis

Launching Oxyglobin before Hemopure

Strengths

• Earning revenue earlier on

• No competition in this field

• Entry price can be free from comparison of similar products

• Pet owners are willing to spend the extra amount if they are educated about the product Weaknesses

• Will create issues for Hemopure pricing

• The veterinary market is not very big

• Many pet owners don’t have insurance to cover the costs of treatment

Opportunities

• Majority of the vets and pet owners are willing to try out Oxyglobin when it is sold at a reasonable price

• Educating vets about the products through fairs and conferences Threats

• Lower earnings will impact Biopure’s stock prices when it goes public

• Of lesser interest to investors than its counterpart, Hemopure

Launching Oxyglobin after Hemopure

Strengths

• Will increase the overall revenue potential of Biopure

• Won’t create backlash from doctors and insurance companies regarding the price difference of Hemopure and Oxyglobin Weaknesses

• There is a chance where competitors can make breakthroughs and launch their products before Biopure and get the advantage

• Delays in FDA’s approvals for Hemopure end up delaying both the products

Opportunities

• It will increase the revenue earned by Biopure significantly

• Will increase the stock prices of the company when they go public

• Would make the investors happier to see a better performance by the company Threats

• Competitors managing to launch their products before Biopure and dominating the market share

• Failing to pass FDA’s requirements

4: In 1 or 2 concluding paragraphs summarize why your recommended course of action is better than the other. Your recommendation should represent the best “solution” to the main question facing Biopure at this time. (30 points)

Answer

I would recommend Biopure to proceed with a calculated risk of delaying the launch of Oxyglobin until Hemopure is launched 2 years later.

The risk calculation factors in that none of our competitors have the ability to research a better product within 2 years and neither have the potential to grab market share due to their choice of raw material which limits their production capacity. Our product on the other hand is a patented intellectual property, therefore safeguarding it from losing the competitive edge. The abundant supply to cattle blood ensures ample of raw material is available to meet demands and scale up production in the future for a sustainable market domination by following the ‘economy of scale’ model. This approach will ensure Biopure can recover its investments and won’t face backlash for its pricing models.

Potential sales at max capacity calculation:

300,000 units of Oxyglobin will bring in $30M/year priced at $100/unit, therefore in 2 years can generate $60M.

150,000 units of Hemopure will bring in $120M/year priced at $800/unit.

Therefore, launching Hemopure can generate 2 years’ worth of Oxyglobin income in just 6 months, while preventing the company form getting involved in pricing issues.