Bergerac Case Study
Introduction
Bergerac System is a company that produces diagnostic instruments for animal care. In July 2010, Ian Wyckoff, CEO of Bergerac System, got feedback from a group of veterinarians. The feedback reminded him that Bob McCarthy, the director of Bergerac’s Planning Department, had provided him an analysis report about OmniVue. The report discussed whether Bergerac should build a cartridge fabrication on their own or via external acquisition. Because Bergerac had a growing trend for demand, but limited resource would delay the production in present competitive market, Wyckoff had to make a decision immediately.
External Analysis
In 2010, veterinary spending was expected to be $13 billion in the United States, and there was an uptrend of 7% - 8% per year during the past decade. Three reasons contributed to this growth. First, pet ownership had increased steadily from 56% to 62% of American households. Approximately 73 million families in the U.S. had one or more pets. Second, pet humanization had become a factor for people to be willing to spend money on it. The third one was an increase in the sophistication and availability of veterinary care. Therefore, the veterinary service market has a good prospect.
The significant change in veterinary service affected the in – house lab equipment. Technology development boosted in-house lab equipments to provide immediate diagnostic test result. In general, veterinarians recommended taking diagnostic tests two or three times every day. The equipment led to the high volume of testing to let customers get results as soon as possible. Based on the case, industry analysts predicted 8% to 10% annual increase for the in – house diagnostic market in North America in the next five years. In addition, there were approximately 30,000 veterinary practices in the United States, and only 40% had adopted in – house equipment. Due to market growth, Bergerac System has an opportunity to expand business.
There are three major
Bergerac System is a company that produces diagnostic instruments for animal care. In July 2010, Ian Wyckoff, CEO of Bergerac System, got feedback from a group of veterinarians. The feedback reminded him that Bob McCarthy, the director of Bergerac’s Planning Department, had provided him an analysis report about OmniVue. The report discussed whether Bergerac should build a cartridge fabrication on their own or via external acquisition. Because Bergerac had a growing trend for demand, but limited resource would delay the production in present competitive market, Wyckoff had to make a decision immediately.
External Analysis
In 2010, veterinary spending was expected to be $13 billion in the United States, and there was an uptrend of 7% - 8% per year during the past decade. Three reasons contributed to this growth. First, pet ownership had increased steadily from 56% to 62% of American households. Approximately 73 million families in the U.S. had one or more pets. Second, pet humanization had become a factor for people to be willing to spend money on it. The third one was an increase in the sophistication and availability of veterinary care. Therefore, the veterinary service market has a good prospect.
The significant change in veterinary service affected the in – house lab equipment. Technology development boosted in-house lab equipments to provide immediate diagnostic test result. In general, veterinarians recommended taking diagnostic tests two or three times every day. The equipment led to the high volume of testing to let customers get results as soon as possible. Based on the case, industry analysts predicted 8% to 10% annual increase for the in – house diagnostic market in North America in the next five years. In addition, there were approximately 30,000 veterinary practices in the United States, and only 40% had adopted in – house equipment. Due to market growth, Bergerac System has an opportunity to expand business.
There are three major
Cited: Garvin, David A., and Sunru Yong. "Bergerac Systems: The Challenge of Backward Integration." Harvard Business School Brief Case 114-381, December 2011.