Biopure Marketing Analysis
Case analysis #1: Biopure Corporation
Submitted by MARCO TARANTA ID: 2013843468 SEMESTER: Fall 2013 1. What is the potential market size for each of Oxyglobin and Hemopure? The veterinary market is valued at $638,550,000. Since the expected market share for Biopure is 100% and assuming that the total U.S. veterinary practices (15,000) remains the same, we can state that the potential market size for Oxyglobin is $638.550.000. The main segments in the veterinary market are “Primary Care” and “Emergency Care”. The veterinary practices are approximately 15,000, 95% of which …show more content…
Reading the case, we can easily identify several reasons why Biopure Corporation should immediately launch Oxyglobin.
First and foremost, time and development advance on the veterinary market. Biopure is the only company engaged in the development of a blood substitute for the veterinary blood market.
Even if a competitor wanted to penetrate the market, it would take 2 to 5 years to bring a product to market because of the FDA-approval process.
Secondly, Oxyglobine would generate the first revenues which could be used for the subsequent launch of Hemopure. Based on the case data, the company can sell 300,000 units per year (full capacity) for $150 (not a fixed price but open to variation) and pays $1.5 per unit as variable cost and $15Million as fixed expense. Hemopure is still two years away from final government approval. Therefore, after two years, the profit will be approximately $59Million. On the other hand, the immediate launch of Oxyglobin would reduce the cost of producing Hemopure in the future; consequently, Biopure might earn more profits.
Furthermore, the launching of Oxyglobin must be considered as a trial through which the company may gather experience and learn how to launch Hemopure avoiding mistakes. That is because the veterinary market is much smaller than the human market. Consequently, the entity of a possible loss in the first market is certainly lower than a