BIOPURE CORP.

INTRODUCTION
In the case of Biopure, the issue is to decide whether to launch Oxyglobin and how to launch it without jeopardizing the potential of Hemopure. Oxyglobin is a substitute to animal blood while Hemopure is a substitute to human blood. The CEO need to identify the influence of the launch of Oxyglobin bring to Hemopure. If the company is launching Oxyglobin, the CEO need to decide the price, identify the target client, choose distributing method and consider the production capacity. The CEO need to take actions to minimize the negative effect and maximize the positive effect of launching.
RECOMMENDATION
The company should launch Oxyglobin as soon as possible. The price should be $150. The company should focus on 10% to 15% veterinary practice which are surgery or trauma cases. For distributing, the company should choose manufacturer direct and build up its own training team.
BASIS OF RECOMMENDATION
Biopure should launch Oxyglobin for the following reasons. 1) Oxyglobin was the first new “blood substitutes” for the veterinary market, and other companies would take 2 to 5 years to bring an animal blood substitutes product to market, which will help Biopure to dominate the market. 2) Biopure had spent over $200 million in the development of Oxyglobin and Hemopure and in the construction of a state-of-the-art manufacturing facility. Oxyglobin would generate the instant revenues that Biopure could use to launch Hemopure. 3) The launch can fill the scarcity of animal blood supply, which will help Biopure to maximize the market share in the veterinary market, and then the proven success with Oxyglobin might have a greater impact on an IPO than the promise of success with Hemopure. 4) The launch of Oxyglobin will also help Biopure to gather experience for the future launch of Hemopure. The next step is to decide the price of Oxyglobin. The price of Oxyglobin should be $150 per unit to veterinarian for the following reasons. 1) According to data in the case, we can calculate market potential for each prospected price to veterinarian and to owner of pets. Table A provides the result of the calculation. By a glance of the market potential for each price, we found that if we set the price to veterinarian at $100 we have highest market potential at 1.73 billion. However, actually we cannot have that high market potential. When the price to veterinarian is $100, the price to pet owner is $200 because of the “doubling rule”, in which the market potential is 1.05 billion. Thus, we should pull out the lower market potential from each pair of the price. The lower price is highlighted and we pick the one with highest market potential among them. When we set the price to veterinarian at $100 and $150, we have high market potential over 1 billion with close results. However, $150 is $50 more than $100, which is a significant difference. We should set the price relatively high because 1) buyers would be willing to pay a high price in critical cases in which the blood transfusion is mainly used; 2) there is no such product in the market; 3) to recoup all costs; 4) the price of Oxyglobin will set a baseline for the launch of Hemopure. Finally, the company should focus on 10% - 15% main veterinary practices because 15% of veterinary practices handling 65% of all canine surgeries and 10% of practices handing 55% of all canine trauma cases. The company should also build up its own team because there was no such product in veterinary market. The company should choose manufacturer direct to sell the product because 1) distributors should be fully committed to Oxyglobin; 2) the target clients are limited since we only focus on 10% to 15% of total veterinary practice; 3) the cost of direct sales is less than the distributor.