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Group 6 Fujiwara, Shisei Arosteguy, Maria Togni, Ana Paula Chai, Chia-Feng (Jay) Cho, Hyune Jik (Ken) PowerPoint Presentation
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Group 6 Fujiwara, Shisei Arosteguy, Maria Togni, Ana Paula Chai, Chia-Feng (Jay) Cho, Hyune Jik (Ken) - PowerPoint PPT Presentation


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Wheelchair Products. Group 6 Fujiwara, Shisei Arosteguy, Maria Togni, Ana Paula Chai, Chia-Feng (Jay) Cho, Hyune Jik (Ken) . Porter’s five force model Company History Companies Performance Company Structure Changes Current Product lines Competitors Updates Conclusions.

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slide1

Wheelchair Products

Group 6

Fujiwara, Shisei

Arosteguy, Maria

Togni, Ana Paula

Chai, Chia-Feng (Jay)

Cho, Hyune Jik (Ken)

slide2

Porter’s five force model

Company History

Companies Performance

Company Structure Changes

Current Product lines

Competitors Updates

Conclusions

slide3

Industry 5 forces analysis

Suppliers

  • The inputs are not differentiated and the switching cost of finding a new supplier is low.

Entry Barriers

Substitutes

  • Low capital requirements in machinery: 1 mil.
  • Low advertising costs: $100,000
  • FDA regulations
  • Fluid access to distribution channels.
  • No Significant Patents
  • It depends on the patient. Some can use crutches or scooters but many are unable to choose any other way of transportation.
  • Even the medicine has not found a cure for some disease.

Rivalry

  • The industry of wheelchair manufacturing has a high concentration
  • High prices rivalry and discounts for the distributors

Buyers

  • Distribution Channel
  • Consumers: high switching cost, some buyers cannot choose something else to mobilize.

LowBargaining power of suppliers

LowEntry Barriers

LowThreat of Substitutes

Moderate Bargaining power of buyers

Index

slide4

Distribution Channel

  • Specialized in ultralight, power and pediatric wheelchairs.
  • Close relationship with physical therapist: customers oriented.
  • Storefront operations for experienced users.
  • A dozen large chains accounted for 50% of the channel’s volume.
  • 20 major distributors to the nation’s hospitals and nursing homes.
  • The six largest accounted 80% of the revenues.

Rehab Suppliers:

General Home Medical Equipment dealers:

Medical / Surgical distributors:

Low Bargain Power

Moderate Bargain Power

High Bargain Power

slide5

Industry Concentration

Source Harvard’s case

slide6

Company History

1983 Company was founded by Richard Chandler

Starts Acquisitions – Guardian was acquired

International Business – European Market

Company goes public – Begins to trade in the Nasdaq

1986 Starts working with Wheelchairs

- Motion Designs is acquired by Sunrise and renamed to Quickie

1990 Quickie launched its first U.S. made power wheelchair

1993 Guardian introduced the lightweight standard wheelchair

Invacare matched Guardian’s price. The product failed

1999 Richard H. Chandler resigns

2000 Company became private by a $250million deal

Michael N. Hammes was appointed as new CEO

slide7

Sunrise Overview

Goal

Market

  • To improve the lives of the people who use our products.
  • Sunrise has manufacturing facilities in the US, Mexico, United Kingdom, Germany, and Spain and distribute products to suppliers in over 90 countries The company has about 4,400 employees.

Business

  • Sunrise Medical is one of the world’s largest Manufactures of homecare and extended care products.
slide8

Social Commitment

Winners on Wheel (WOW)

Foundation

Official Sponsor of

Paralympic Games

Chris Waddell is a top mono-skier

and wheelchairracer

* Sunrise sponsors 82 athletes in many sports

* Partnerships : National Sports Center for the Disabled

The Peter Alliss Masters Golf Charity

Index

slide9

Companies Performance (till 1993)

Invacare induced the

lightweight standard

Strong financial structure

Base of the M&A

slide10

Companies Performance (till 2000)

Reason

1-Merger with

Sentient system 2-Acquisition of three European-based division

Reason

1-Re-engineering

Net loss: 12M

Reason

1- pre-tax charge from unusual expense (65.2M)

2- severe pricing pressure

slide12

Financial Strategy (till 2000)

  • Expand market segments through M&A

- Strategy of CEO (Dick Chandler)

  • Use the interest rate exchange agreement

- As a policy, Sunrise does not use interest rate swap or any other derivatives

  • Use foreign-denominated borrowings from its multi-currency credit facility
  • 1999, went to the NYSE

Index

slide13

Organizational Structure Change

  • Restructuring in response to increasing costs

1996

1997

2000

Index

slide14

FY1996:

“Re-engineering Program” began

  • Consolidation of US sales forces
  • Integration of smaller divisions
  • Establishment of profit improvement program at all divisions
  • Sale of unprofitable business
  • Unusual expenses: $65M
slide15

FY 1996

FY 1997

Quickie Designs

  • Home Healthcare Group
  • Headquarters:

- Sales, Marketing, Finance, H/R, ...

  • R&D
  • - Mobility Products Division
  • - Personal Care Products Division
  • -Respiratory Products Division

Jay Medical

Guardian Products

DeVilbiss Health Care, Inc.

(Two other Groups in different businesses omitted)

(Other divisions in different businesses omitted)

FY1997:

Abandoned De-centralized Structure

  • Many divisions consolidated into one business unit to increase efficiency
slide16

FY 2000:

“Re-Alignment of Operations”

  • CEO Chandler resigned due to the red in 4Q99
  • Began another move to reduce costs

Home Healthcare Group

North American Operating Group - Sales & Mfg

Sunrise Medical Europe

European Operating Group

- Sales & Mfg

Continuing Care Group

Global Business Group

- Product development & management

slide17

Current Wheelchair Brand

  • Value-oriented products. For public use, aged people
  • Guardian ®-standard wheelchair
  • Hoyer series -economical choice
  • Offering the most innovative products in the marketplace.
  • New and younger user ,Active patients.
  • Quickie® - Lightweight, ultra light, power and sport wheelchairs, include Kit-Kart.
  • Zippie® -Pediatric Wheelchairs
  • Breezy ® - Lightweight wheelchair
  • Building only the most superior support surfaces.
  • Wheelchair seating products
slide18

Wheelchairs Product Line

Quickie

  • Adult Manual Folding $1,300 - 2,850
  • Power Wheelchairs $4,283 - 13,280
  • Adult Manual Rigid $1,395 - 3,400
  • Adult Manual Positioning $2,345 - 3,770
  • Sports Products $1,150 - 3,299

Zippie

  • Pediatric Wheelchairs $2,150 – 2,650

Guardian, Breezy

  • Standard Wheelchairs $340 – 1,150
slide19

Products Price Range Comparison

Sunrise

Invacare

E & J

Growth rate 10%

Commodity, growth rate 5%

Adult Manual Folding

Pediatric

Adult Manual Rigid

Adult Positioning

Sports Products

Standard Wheelchair

Power Wheelchairs

$0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000

Price

Data from Sunrise, Invacare and Everest & Jennings website

slide20

Competitors Update

  • Produce Standard, Lightweight standard, Power Wheelchairs.
  • 1996- merges with Graham-Field Health Products, Inc.
  • December 27, 1999- commenced a voluntary proceeding pursuant to the Bankruptcy Code
  • Compete in all products with Sunrise, plus 3 and 4 wheels scooters
  • Has lower per unit costs of most other rivals

Source: Forbes 1997

Whole industry growth rate 7%

Price decrease because of the reimbursement of medical care insurance reduce

slide21

Conclusions

  • Charisma Chandler set up the company to realize his dream
  • Rapid sales growth through diverse M&A strategy without finding enough profitability unlike its competitor Invacare.
  • Disappointing results led further restructuring and finally made the company private
  • Chandler is still pursuing his dream in another company Integration of smaller divisions