Healthymagination: GE Healthcare
Case Study: Healthymagination: GE Healthcare
1.
Tom Gentile should give in my opinion the green light to two product concepts only (Hepecho and UltraLipo).
Even though some of the product concepts may not meet the healthymagination criteria of 15% improvement across cost, quality and access perfectly, all targeted segments and markets have significant organic growth potential. See details/justifications below. The symbols represent the whether the healthymagination criteria can be met or not based on the justifications.
HepEcho Justification Product Economics | | * Japanese market is estimated to be at $400M, which equates to about 2666 units ($400M/$150K). **Assumption: Average price of ultrasound for mid-tier general imaging customer = $150K * The $36M investment can be recovered by selling 343 units within a 2 year period ($36M/$120K-$15K = 343 units). **Cost is based on a multiplier of 8 then mc*8 = $120K, therefore, mc = $15K * Selling 343 units within a year or two represents a market share between 6.4%-12.8% (172 units/2666 and/or 343 units/2666) which is not unrealistic based on the fact that Japan has 11% of the global market. | Cost | | * The Hepcho design will be based on the LOGIQ-E9 which average price is $200K, therefore projected price of $120K (40% price reduction) will definitely meet the 15% cost reduction to customers. | Quality | | * Even though it is difficult to quantify whether HepEcho will be able to improve imaging quality by at least 15%, GEHS is confident that basing the new design on the LOGIQ-E9 architecture and bundle navigation, will allow HepEcho to offer more accurate biopsies and more optimized imaging. | Access | | * Having a more reliable and less expensive product will allow customers to generate higher margins which can result in lowering costs and premiums for individuals who needs access to healthcare. * Although it’s hard to quantify from the case whether the 15% increase in care
1.
Tom Gentile should give in my opinion the green light to two product concepts only (Hepecho and UltraLipo).
Even though some of the product concepts may not meet the healthymagination criteria of 15% improvement across cost, quality and access perfectly, all targeted segments and markets have significant organic growth potential. See details/justifications below. The symbols represent the whether the healthymagination criteria can be met or not based on the justifications.
HepEcho Justification Product Economics | | * Japanese market is estimated to be at $400M, which equates to about 2666 units ($400M/$150K). **Assumption: Average price of ultrasound for mid-tier general imaging customer = $150K * The $36M investment can be recovered by selling 343 units within a 2 year period ($36M/$120K-$15K = 343 units). **Cost is based on a multiplier of 8 then mc*8 = $120K, therefore, mc = $15K * Selling 343 units within a year or two represents a market share between 6.4%-12.8% (172 units/2666 and/or 343 units/2666) which is not unrealistic based on the fact that Japan has 11% of the global market. | Cost | | * The Hepcho design will be based on the LOGIQ-E9 which average price is $200K, therefore projected price of $120K (40% price reduction) will definitely meet the 15% cost reduction to customers. | Quality | | * Even though it is difficult to quantify whether HepEcho will be able to improve imaging quality by at least 15%, GEHS is confident that basing the new design on the LOGIQ-E9 architecture and bundle navigation, will allow HepEcho to offer more accurate biopsies and more optimized imaging. | Access | | * Having a more reliable and less expensive product will allow customers to generate higher margins which can result in lowering costs and premiums for individuals who needs access to healthcare. * Although it’s hard to quantify from the case whether the 15% increase in care