Biopure HBS case write up

What price and Why? To assess what price Oxyglobin should be set at, we must analyze the 4 C's. Firstly, in evaluating the company, we determine that the cost of production is $15 Million per year independent of volume, plus $1.50 per unit variable cost. The current capacity for Oxyglobin is 300,000 units. In exhibits 4 and 5 we determine their break-even cost. Next, we must determine who the customer is and what their potential is. To do this, we begin …showed first 75 words of 568 total…

…showed last 75 words of 568 total…Biopure to recruit and maintain a sales force of approximately 10 employees (at an estimate total cost of $100,000 per) and carries a $10-$15 distribution cost per unit. With 750 emergency practices, each sales person would be assigned 75 practices. At 300,000 units the distribution cost is $4,500,000 on the high end and our staff costs and administration costs an additional $1,000,000. Therefore, our $5,500,000 cost is more favorable to the $9-13.5 Million for an independent distributor and is built into our $200 price.