Ring Medical

Business to Business (B2B) Case Analysis Note

PRESENTED TO

Prof. Joffi Thomas IIM Kozhikode

IN PARTIAL FULFILLMENT OF THE COURSE ON

ePGP-03 on March2012

06th

By Group Aravind Venkatesh Senthil Natesan Sukhdeep Singh ePGP-03-015 ePGP-03-080 ePGP-03-238

Content
Ring Medical: Case Executive Summary
Positioning options, Strategy recommendation for HCS-100. Best case scenario: Channels HCS 100 be sold through Organizational Issues: Ring Medicals

Ring Medical: Case Executive Summary

Paul Ruggieri (CEO & President Ring Group), a wholly owned subsidiary of Scanvest Ring, Norway (one of Scandinavias largest IT companies). Ring group was the lone surviving foreign subsidiary. HCS-100 product was housed in Ring Medical (a div of Ring Group). Ring Medical, since inception (ie July 1986) had operated autonomously, located in Massachusetts. HCS-100, single major opportunity for Ring Group to turn a profit for 1st time since 1984 and would enable Ring Group (HQ in NY) to break dependence on mature products & markets and position the company for future growth. HCS-100's positioning be a source-efficiency (ie cost reduction) or source-effectiveness (ie quality enhancement) system. Channels of distribution - deployment of manufacturing reps as opposed to direct sales force. Board members to (i) resolve how the organizational responsibilities for the HCS-100 product should be divided, and (ii) approve a marketing plan. -------This Case Analysis Note (CAN) covers/analyzes the following points: (a) The position options analyzing and a positioning strategy recommendation for HCS-100. (b) Should HCS-100 be sold through a direct sales force, manufacturers representatives or telecommunication distributors? (c) What are the organizational issues at Ring Medicals / Scanvest Ring which may affect the implementation of the proposed marketing plan?

Positioning options, Strategy recommendation for HCS-100.

The positioning options that can be adopted for HCS100 would be either: Source effectiveness (quality enhancement) or a Source efficiency (cost reduction). Ring medicals chose hospitals as a target market for HCS-100 basis fundamental facts and characteristics about hospital business. As per their preliminary strategy they were to target large & medium hospitals. HCS-100 TAS was both superior to competing product and preferable to alternative solutions, largely because of its flexibility in screen design. HCS-100 TAS allows for efficient handling of physicians calls dialled to their private offices during the hours when office was not attended.

Bubble basket:
HCS-100 components of a positioning statement
1. Target Audience: Large / medium hospitals, other institutions too.

It being a high end dependable hardware offers the highest number of modules at a competitive price.
For hospitals, HCS 100 is the most sophisticated communication system that improves communication efficiency between various participants in hospital ops.

3.Point of difference: Improves communication between various participants in hospital operations.

2. Category/ Frame: HCS 100 is a high end communication tool for hospital mgt.
4.Product is high end & offers large modules

It makes sense for Ring Medical to choose Source efficiency (cost reductions) as its positioning strategy. As by reducing costs they would be able to capture market and sell their add-ons convincingly for high gross margins.

Best case scenario: Channels HCS 100 be sold through:

Recommended

Direct Sales force

HCS 100 can be sold through a direct sales force. This way company can train them well to be seasoned professionals on their high value offering, have controlled direct liability, have direct reporting to Sales director. Would save direct cost for product dev. With good control of HR. Periodic trainings, attractive incentives , they can work under pressure . Current Situation: 4 systems sold as on Apr88, but cost of each Sales person would be around $60k-$75k.

HCS 100 Sales

Choosing the best Business Model

Tele communication distributors

Sales through this channel (being a new channel for the company to explore. There are many aspects of this the company should first understand before finalizing this channel as major sales partner. Eg. Introlink is mentioned in the case

Manufacturers representative

Current Situation: Product sold through 8 MRs who were offered a 20% commission rate on sales of each installed system . As on Apr88 In 6-8 months that MRs network had been operational only one system had been sold by any rep. Budgeted annual sales vol being 30 and revenue totalled about 15% of the targeted $1.7 million. Through this channel trainings cannot be controlled as its on discretion of the manufacturer and they lack stickiness.

Organizational Issues: Ring Medicals

Wanted Direct sales Reporting to sales director at Billerica office Didnt want to dilute entrepreneurial culture of his office.

Owen

Wanted decentralization to continue

Organizational issues

It was clear that heads of ring Group and Ring medicals believed in two different ways. >> Mr. Owen (Head, Ring medicals) wanted sales team to be reporting to the office in Billerica, as the office had strong design and service teams. He didnt want to dilute the entrepreneurial culture of the office by centralizing operations with HO. >> Mr. Ruggieri (Head, Ring Group) wanted to set-up a full fledged service centre, ware house etc at NY as he felt that costs would be reduced to a large extent if centralized. He felt that product launch of HCS-100 would be much smoother if done from New York.

Ruggieri

Disagreement with regards to reporting of the sales and service.

Disagreement about selection of appropriate distribution channel

Tapping of other industry besides hospitals .

Thanks !!