1) Which of the following are true about Bergerac\'s competitors? (select all th
ID: 326058 • Letter: 1
Question
1) Which of the following are true about Bergerac's competitors? (select all that apply) A) Bergerac's OmniVue product was at a higher price point than the comparable system offered by Abaxis B) Bergerac was the market share leader in the veterinary diagnostics instruments market C) Idexx had the largest product line and the best-established distribution network and sales force D) Bergerac saw an opportunity for itself to capture market share in small- and medium-sized veterinary practices
2) Which of the following statements are true of Bergerac's cartridge sourcing and production processes? (select all that apply) A) It was difficult for cartridge suppliers to respond to unexpected spikes in demand B) Despite dependencies on petrochemical prices, plastics suppliers enjoyed a market with very high margins C) Bergerac sourced the plastic parts for its cartridges from only one supplier--GenieTech D) Bergerac had to carry more inventory than they would like
3) Which of the following statements are true of the build vs. buy decision? (select all that apply) A) Bergerac's business already accounted for more than 90% of GenieTech's revenue B) McCarthy's analysis assumed a ~8% annual growth in production demand in the years ahead C) McCarthy calculated more annual savings with the in-house option at current rates of production D) In the "build" option, the machinery Bergerac would use would be less efficient than what GenieTech uses For the exclusive use of Y. Sherhan, 2018. HARVARD BUSINES S SC HOOL BRIEF CASES 4381 Bergerac Systems: The Challenge of Backward Integration Introduction In July 2010, lan Wyckof, CEO of Bergerac Systems, with scribbled a few notes about his latest meeting a group of veterinarians. his latest experiences valuable, although on this visit it was not entirely positive These were his customers, and they provided direct feedhack on their with Bergerac's diagnostic instruments for animal care. The feedhuck was always The customer feedback was fresh in reviewing that morning. It summarized the"make vs. buy" analysis for OmniVue cartridges conducted by his dinector of planning, Bob McCarthy. McCarthy recommended that Bergerac build a cartridge fabrication unit within its own plant rather than acquire GenicTech, one of the company's two current cartridge suppliers Wyckolrs mind as he returned to the proposal he had started The decision between in-house development and external acquisition was critically important Bergerac was growing fast-averaging 17% annually sine 2007-but it remained a small player with limited He had to make a decision quickly, as the supply of OmniVue cartridges had been inconsistent in recent months. Indend, the veterinary practice that Wyckoff had just visited had recently been frustrated by a temporary stock-out at their distributor. To maintain Bergerac's growth trajectory, it was imperative for potential customers to have full confidence in the company's ability to deliver on its promises. Furthermore, the contract with the other cartridge supplier, Elsinore Plastics, would come up for renegotiation in August 2010-a mere three weeks away resources in a very competitive market, and Wyckoff was determined to avoid a costly mistake. Market Overview: Evolution of Pet Diagnostics In 2010, veterinary spending in the United States was expechd to be $15 billion, having grown 7% to 8% per year over the prior decade (see Exhibit 1 for data on US veterinary sponding) Several factors drove this growth. First pet ownership had increased steadily since the late 1980s, rising 6 points to more than 62% of households. Nearly 73 million US households had one or more pete and the average we Harvand Busins Pulishing oon, MA 0216 r go to hapi/www.hbop harvand eds. This publistis nay mot be duglied This decurment is authorianed for use only by Youset Sherhan in Service Operations Managenent MGT 3121)ught by Cory Labenow, CUNY-Banuch Colnge from January 2018 to Man 2018
Explanation / Answer
1. The correct option is (c) - Idexx had the largest product line and the best-established distribution network and sales force.
2. The correct option is (a) - It was difficult for cartridge suppliers to respond to unexpected spikes in demand, thus casuing delay.
3. The correct option is (b) - McCarthy's analysis assumed a ~8% annual growth in production demand in the years ahead
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