1751 words 8 pagesThe BOC Group: Ohmeda (A)
Ohmeda, a wholly owned subsidiary of the BOC Group, operated historically in three key areas: medical equipment, gases, and supplies. In 1985, Ohmeda’s president, W. Dekle Rountree, was planning to exit gases and supplies in order to focus solely on high-tech medical equipment. Through this shift in strategy, Rountree was hoping to grow equipment revenues from $95M in 1985 to $158.5M in 1990.
In order to execute successfully on his growth plan, Rountree would need to re-assess Ohmeda’s marketing channel strategy. In 1985, 43% of equipment sales ($41M out of $95M) were booked through dealers. Dealers provided increased coverage, but also carried significant …show more content…
Ohmeda’s competitors varied based on product. In the anesthesia segment, Ohmeda was the clear historical leader, but its market share had declined at an alarming rate from 65% to 45% in recent years. Meanwhile, N.A. Drager, who entered the market in 1976, had grown to 35% market share by 1985. Drager’s equipment was sold through 20 exclusive full-service dealers.
In the infant care segment, Ohmeda possessed 13-39% market share and competed primarily with Healthdyne/Air Shields (H/AS). H/AS was the clear market leader with 34-61% market share and sold its products primarily through ‘exclusive’ dealers (in practice). 90% of these dealers also serviced H/AS machines. In addition to its 100 dealer reps, H/AS also had a small 15 person direct sales force.
In the respiratory therapy segment, Ohmeda possessed just 10-15% market share and competed with four major companies, all of whom had larger market share. Two of these companies, Baxter-Travenol and Siemens, relied solely on their large direct sales force, while the other two used a combination of dealer sales and direct sales.
In the patient monitors segment, Ohmeda’s market share was just 4%, significantly lower than its two largest competitors, Hewlett-Packard and Siemens. Both of these competitors possessed 25%+ market share and relied solely on their large direct sales force.