Resmed Case Essay
Reseed did file a suit claiming that Reconciles Infringed on their patent. However, Responsive convincingly argue that their devices did not infringe on Resume’s proprietary device and the court ruled in their favor. Reseed failed to bar Respiration’ entry into the CAP/OSHA market as well as prevent imitation and substitution of their CAP device. Reseed was aggressive in their R&D (spent heavily), but brought products to market late. They often pursued several simultaneous projects through 3 departments (Mechanical design, electronic development and software development).
Examples of Hess were APP to provide therapy to a larger group of OSHA sufferers and to expand into other areas of respiratory therapy. They consistently feel behind their Respiration in delivery products to the market. Market Selection Selected OSHA/SAD market as appear. 2% of population was possible candidates for CAP therapy. This was Resume’s initial target market. They started in Australia, but then expanded into other countries such as Germany and eventually to the US. The branched into emphysema, CHEF, stoke therapy and other pulmonary diseases. They focused on the faces market where they were very successful.
Also looked to revive an alternative treatment for Cheyenne-Stokes respiration. Market penetration and adaptation They established sales offices and partnerships with distributors as an entry strategy into the local markets. They eventually purchased the distributor when its sales were the majority of the distributors’ business. This was to help Reseed combat their smaller size. They also established an office In the US to have a local presence. Every country has a different health care system with differing “reimbursement systems, market structures and competitive Reseed approached each market with those differences in mind.
Main target market was the US. US market had MM people affected by sleep disorders according to the Congressional Sleep Disorders Commission. OSHA identified as the largest culprit and that many weren’t properly diagnosed. This study put OSHA related products in the spotlight and this market grew almost 500%. This Increase In market share would be a tremendous opportunity Tort tense companies won were positional to take advantage. Unfortunately, Respiration was the first mover in this market and took a commanding market share.
Barriers to entry were minimal as a new market entrant would only have to demonstrate to the FDA that the CAP device complied with guidelines. Reseed was second in the US to Respiration to provide SAD therapy equipment. Respiration holds the majority of the market share in the US. In most other countries, healthcare is usually controlled by a single source (e. G. Government) which was very motivated by cost. Germany being one of the exceptions as they were more concerned about the level of care provided and not the costs/reimbursements.
Reseed offered the “Sleepiest” which was a product to provide non-sleep specialists medical staff the tools for identifying a diagnosis and a treatment. This was ultimately designed to “increase the flow of patients into payer-dictated paths for CAP prescription. “ Competitive industry structure and competitive positioning Porters’ Five forces analysis will help to determine industry structure and competitive positioning Industry Competition Respiration major competitor in OSHA and breathing therapy market Respiration had more advanced and relevant technology. Two major competitors merged (Respiration and Healthy), but was distracted by integration and No real source of product differentiation amongst the restructuring process. Competitors with the exception of an “Outset” device which constantly monitors and adjusts air pressure. Source of product differentiation with the faces. Low levels of product differentiation and many competitors will put a downward pressure on the Caps prices. No competitors in the CHEF and stroke treatment markets. First mover advantage.
Supplier Power Raw materials and products needed to manufacture these devices and fastbacks would be very similar. Supplier power will be controlled by supplier competition and the demand of the product being sought. Suppliers can drive prices upwards by following the leader or creating a shortage in essential raw parts needed for the CAP/APP machines. Buyer Power Products which treat OSHA/SAD offer very little product differentiation. Because of number of competitors and lack of product differentiation, this will put pressure on the manufacturers to compete on pricing. Buyers have less power with fastbacks and Reseed is the industry leader. Has a greater level of product differentiation. Barriers to Entry Low barrier to entry with OSHA markets. FDA had a set standard spec for the CAP. If competitors met the standards of the design, the CAP machine would be allowable. A barrier to entry would be in partnering with a distributor that had injections with governments and/or the insurance companies. Another barrier to entry would be the specific regulations governing medical therapy devices. How loose or how strict these regulations would be would affect the barrier to entry.
Hall Drawler to entry would De Tort products wanly were Antennae to treat c Stroke patient market. This product required timely and costly clinical trials. There was also no compensation incentive for cardiologists/neurologists. In the CHEF and Stroke markets, high barrier to entry as these markets had well defined diagnostic and treatment methods. Threat of Substitutes High threat of substitutes in the OSHA/SAD markets from competitors’ products, surgical procedures and prescription medicines all meant to alleviate the symptoms of OSHA.
Interaction with regulatory bodies, other key organizations Had problems getting the commercial backing for development of the device and the medical community to accept CAP. Farrell had many publications on the topic of sleep medicine and established credibility in this medical community. FDA was responsible for the approval of therapeutic products treating OSHA/SAD. In Germany, doctors and not government had the greatest influence on which product was used. However, the German government also had very strict technical specifications and patients expected cutting edge technology.
Management, leadership and organization structure Flat organization structure focused on minimizing politics, being value driven, being innovative and doing tasks with a sense of urgency. CEO/leader with high standards and demanding targets. Relentless drive, attention to detail with intelligence. He was good at forming networks and assembled a medical advisory board of experts to advise the company on trends in medicine. Hired former graduate students who already had worked with Farrell and understood his demanding sense of urgency. Reseed geographically expanded as they went into new markets.
Farrell wanted to maintain the company’s culture often communicated with all levels of the organization as well as visited the Australian office. Changed organization and leadership in R&D, when they couldn’t deliver results and fell behind their competitors. Acquired MAP (a competitor in the German markets), which created synergies and economies of scale in its German operations. Map also had new products in the pipeline which would help to lower the R costs of the combined company. This brand recognition in Germany could service to strengthen the company’s competition as they expand into new markets.
In the US, they kept their sales force lean in order to keep their costs down and focused on the strategic repositioning of reimbursable products in new areas of treatment. Access to capital Partnered with Baxter International, invested in Resume’s product to improve patient comfort and reduce the noise produced by the machine. Almost failed when Baxter sold its respiratory care businesses, but Farrell funded Reseed privately. Distributor partnership with Monitored, they gave $1 MM for development of next generation of CAP evolves In exchange Tort a Malory Interest In ten Resume. 0 secure althorn funding, Reseed came out with an PIP in the US which raised $MM. What should Reseed do with regard to the CHEF (congestive heart failure) and Stroke market opportunities? Reseed should continue developing technologies to take advantage of the CHEF and Stroke markets. Reseed needs to expand on sicknesses that can be treated using the same types of therapy. This will offer the most synergies to their current infrastructure and will offer them large growth potential in the future. These markets had almost MOM people affected by CHEF or Strokes in the US.
There were no competitors in this market and the first to move could potentially capture the lion’s share of the market. This would be a huge capital investment and the rewards as well as the risks will be large. For the CHEF opportunity, there were studies which showed the link between SAD and hypertension, which was an accepted risk factor for CHEF. CHEF needed new technology to respond to CHEF patients breathing patterns. With the focus on prevention as opposed to treatment for many illnesses, pushing into this market and spending the capital on R&D could be lucrative.