Crescordia Company Essay
Crescordia is at a crossroads, trying to decide whether or not to adopt the disposable fixation device. This question has come about due to their market share erosion, as the company currently does not offer a resorbable product line. Innostat offers a resorbable product (albeit, in the early stages of development) and gaining market share in both product lines. The decision of whether or not to enter the resorbables market now is a crucial question we should address. This decision will not only impact the current line of business but also the well being of the company as a whole in the future.
Crescordia needs to enter the resorbables market in order to stay afloat due to the fact that the current fixation device industry is shifting towards this new technology. The segment of the resorbables market that we should dive into should be the pediatrics sector. Typically, the pediatrics market has been viewed as a taboo market to experiment in, however the benefits of successfully operating with resorbables is valued very highly by the child patients, the doctors, and the industry as a whole. This market, if entered correctly, has a potential to have an extremely high return. To begin with, the customers of the resorbables are already demanding the products from the manufacturers. The doctors literally are asking the CEO when this product will be available to use in surgeries. The demand thus far has been unmet, and this creates a huge opportunity for Crescordia. Additionally, doctors would prefer to buy all of their products from one supplier; thereby having resorbables in the product offering will help Crescordia entice purchases.
On an ethical level, if children can avoid having two surgeries to correct one injury, this is also seen as an achievement and will be highly regarded by doctors (as well as patient’s parents). That being said, testing products on children opens Crescordia up for many potential lawsuits. This technology is untested and it is considered a moral issue to use untested products on children. However, Crescordia will not be able to help children without testing the product to begin with, moreover from a legal perspective the risk-benefit test demonstrates the benefits to society will outweigh the risk of using a new technology on children. This is a new market that demands high quality products that Crescordia will be able to deliver with the right implementation strategy (see exhibit 6 for our business model logic).
In order to implement the pediatric segment strategy, we need to analyze from both internal and external perspectives. Internally, we need to align the board members, managers, and other employers under “one vision, one goal”. This vision, defined as being open to a disruptive technology, which will change the existing culture of the Company. Once everyone is on board, the Company will need to staff a new R&D department that will be exclusively devoted to the resorbables as well as other supportive administrative personnel. In addition, a good percentage of the current R&D budget should be reallocated to support this new technology. Finally, in order to house this new branch of the Company, we will need to build a separate research facility. This will allow employees to “free think” without the risk of interfering management that is focusing on our current product line. Internally, there are big changes to be made and resources will need to be dedicated to this project, in order to lower the risk of implementation failure.
From an external point of view, both doctors and patients need to be aware of this technology offering. The initial objective should be to get the product into as many doctors’ hands as possible; university hospitals would be the best place to start, in our opinion. Training hospitals are more open to new technologies, and the feedback published by those specific hospitals could help build brand awareness. Additionally, university hospitals can be involved in the further development of the product. In the same manner we provided training to our existing doctor network, we will utilize those teaching techniques with the new product. Training seminars and educational classes will be offered by Crescordia to educate the customer (doctors). Ultimately, the “student” of these classes is our customer and therefore we can push the product through the existing channels.
* Loss of credibility if Innostat makes the better product from the start
* Financial expenses to get into market at this moment, net margins do not present a “WOW” factor
Potential Competitor Responses:
* Piggybacking off of our strategy
* Competing with the same level of price/sales channel/product line
* Enter different market segment