Invacare Wheelchair Strategy Case

1412 Words Aug 22nd, 2013 6 Pages
The wheelchair industry is currently (1992-1993) composed of three companies controlling 72% of the wheelchair market (including parts). Even though together they are a dominating force, the overall profitability of the industry is comparable to that of a not a very attractive one, with the top two players averaging a meager 5.7% Net Income and the third one (the former market leader) losing considerable money (see Exhibit A).

Player | Revenue | Net Income | Market Share | Invacare | $ 146.9 | 5.8% | 37% | Sunrise Medical | $ 79.4 | 5.7% | 20% | Everest & Jennings | $ 59.6 | (17.7%) | 15% | Others | $ 111.2 | N/A | 28% |

Player | Revenue | Net Income | Market Share | Invacare | $
…show more content…
If this happens and more sales are driven through the Rehab Suppliers for example, then it would be safe to say profitability will increase, since that channel does not have deep discounts compared to HME. (2% price decrease in 1992 vs HEM’s -15%)

Quickie’s main advantage relies on being a pioneer in the industry, while Invacare’s been a follower. Quickie released many product innovations and could be credited as the creator of lightweight and ultralight segments in the category (see Exhibit 6 in the case). Part of the benefits that being the first hitter in the category is the market share yield on those innovative segments (Quickie holds a remarkable 49% market share on the ultralight segment)
Quickie also has multiple other advantages (as a part of Sunrise) such as the manufacturing and logistics philosophies like Just-in-Time, lean manufacturing, etc. A factor that accounts for decreasing quality issues and manufacturing costs is using fewer parts versus Invacare’s Action wheelchairs (50-100% less parts in Quickie’s model), this approach also benefits Hospitals and Nursing Homes’ ability to hold inventory in contrast to Invacare’s strategy. Quickie’s COGS for
Open Document