Ohmeda Boc Essay

2011 Words9 Pages
Executive Summary With the transition to exclusively selling medical equipment, Ohmeda must incorporate more direct and specialized selling into its channel mix. Given the aggressive revenue growth targets, the best channeling mix for Ohmeda is 75% direct sales / 25% dealer sales and 75% specialization / 25% geographical. This optimal strategy will allow Ohmeda to increase revenue, meet target customer needs, challenge competition, and capitalize on the strengths of the Ohmeda products. Business Strategy Ohmeda's business strategy is to no longer carry medical supplies and gas products, yet to increase equipment sales revenues by an average of 11% each year for 5 years. The current channeling structure consists of 50% Dealers and…show more content…
In urban areas, the decision to purchase this high tech equipment is controlled by medical specialists (Exhibit 3). An in-depth understanding of the equipment, technical capabilities, and safety requirements are required for sales personnel to effectively communicate with these decision-makers. An increase in the specialized, direct sales force will allow Ohmeda to be more competitive. For example, in the anesthesia market, Drager has 35% of the total market including 42% of the urban hospitals and teaching institutions. Drager has quickly emerged as an aggressive competitor due to their structure of 20 exclusive dealers that also service their equipment. Since dealers also service the equipment, they must be well informed if equipment intricacies. Further illustrating the need for sales-force specialization is Ohmeda's main competitor for its CPU-1 ventilator--Seimens. The German company has successfully managed to sell its foreign produced ventilators while Ohmeda has virtually no market penetration of its equivalent product, despite its lower prices. It is evident Seimen's direct, specialized sales force has led the way. Ohmeda claims the growth of demand for ventilators will blossom to 17% over the next three years, making it imperative to move the sales force to a more specialized model in order to capture the increasing need for state-of-the-art ventilators. Likewise, Ohmeda's new incubator sales are floundering. The information

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