Augustine Medical, Inc. - 1044 Words

Augustine Medical, Inc. The Bair Hugger ® Patient Warming System Problem: August Medical, Inc. was incorporated as a Minnesota corporation to develop and market products for hospital operating rooms and postoperative recovery rooms. And the main problem of Bair Hugger patient Warming System is how to price this system and how to compete to other competitors. SWOT Analysis: Strength | weakness | 1. The system has a good structure design.2. Warm air makes patients feel warm and stop shivering.3. The system cannot cause burns and water leaks around electrical equipment are not a problem, as they are with water-circulating blankets.4. The disposable blankets eliminate the potential for cross-contamination among patients.5. The system†¦show more content†¦We assume the price of heater/blower is P1; the price of blanket is P2. V1 stands for volume of heater/blower; V2 stands for volume of blanket. So the minimum revenues= $500,000 + (0.3P+380)*V1 + (0.4P1+0.85)*V2 Breakeven = fixed cost/margin = total dollar fixed costs/ unit selling price –unit variable costs So Breakeven = 500000/ (0.7P-380) + (0.6P1-0.85) EXHBIT 1: Break-even analysis for postoperative patients who need blankets: Surgical operations are performed annually | $21000000 | More than seven beds hospital needed | 1-20% =80% | Percentage of postoperative is hypothermic | 60-80% | Patients who need blanketsFrom 60%-80 | 21,000,000*80%*60%=10,080,000 | | 21,000,000*80%*80%=13,440,000 | Exhibit 2 An estimated breakdown of the number of postoperative hospital beds and the percentage of surgical operations is shown below: Number of postoperative | Number of hospitals | Estimated percentage of surgical operations | 0 | 1,608 | 0% | 1-6 | 3,602 | 20 | 7-11 | 1,281 | 40 | 12-17 | 391 | 20 | 18-22 | 135 | 10 | 23-28 | 47 | 6 | 29-33 | 17 | 2 | gt;33 | 17 | 2 | AH1: We can assume the blanket price is $26, because the list from $20 to $26, and we don’t charge the heater/blower. Due to the good facility, we can set the market share at 15%, so the blanket unit =31,365*60%*15%/8=352. Breakeven for blankets= (352*380 + 500,000) / (0.6*$26-0.85) = 42,966Show MoreRelatedAugustine Medical, Inc.1961 Words   |  8 PagesIntroduction ( Background and Situation) Augustine Medical, Inc. was founded by Dr. Scott Augustine, an anesthesiologist from Minnesota, in 1987. The company was created to develop and market products for hospital operating rooms and postoperative recovery rooms. The company provides innovative solutions to combat postoperative conditions such as hypothermia. Medical research indicates that 60 to 80 percent of all postoperative recovery room patients are clinically hypothermic. Hypothermia isRead More Augustine Medical, Inc. Essay1891 Words   |  8 PagesAugustine Medical, Inc. Introduction ( Background and Situation) Augustine Medical, Inc. was founded by Dr. Scott Augustine, an anesthesiologist from Minnesota, in 1987. The company was created to develop and market products for hospital operating rooms and postoperative recovery rooms. The company provides innovative solutions to combat postoperative conditions such as hypothermia. Medical research indicates that 60 to 80 percent of all postoperative recovery room patients are clinicallyRead MoreAugustines Medical Case Analysis Essay1761 Words   |  8 PagesAUGUSTINE MEDICAL, INC. CASE ANALYSIS THE BAIR HUGGER PATIENT WARMING SYSTEM I. Factual Summary: * The United States does not currently have an established warm-air technology blanket market. * The Bair Hugger Patient Warming System product is not a consumer device. The main users of this product consist of businesses and hospitals. * Hospitals will always be provided funding necessary to prevent hypothermia and other diseases; as a result a demand will consistently be commonRead MoreAugustine Medical Case Study1763 Words   |  8 Pagesheater/blower unit and disposable warming covers. The ultimate problem facing Augustine Medical, Inc. is how to price theses two components of the product and how to position it compared to its competitors. There are many substitutes available for hospitals to treat and prevent hypothermia. However, there are many disadvantages to the variety of other devices which virtually treat the same condition. Augustine Medical believes that their product is superior to their competitors’ products. S.WRead More Marketing Research For Augustine Medical Essay2527 Words   |  11 PagesMarketing Research For Augustine Medical This report references exhibits and appendices not included within the document Executive summary By early 1988, Augustine Medical executives were actively engaged in finalizing and marketing the program for the patient warming system named Bair Hugger Patient Warming System. The principal question yet to be resolved was how to price this system. 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