FormPrint Ortho500 Case Analysis Submitted ByGroup 15 BBMK Sec-2 Date: 9th September 2015 . direct email campaign. Also. These principles mainly involved producing tangible. FormPrint predicted that out of $235 million of the global 3D printing market $176 million was to be coming from US market which contributed to 75% of the total market in healthcare. Prices for these devices varied from as low as $10000 or less to as high as $700000 for large complex systems. The company had sales of $42. Well trained salesmen b) 4 P’s: Product Price Target Market (Place) Promotion Ortho500 $68000 Large non-hospital orthopaedic clinics Conference Sponsorship/ quarter at 4 orthopaedic conferences. Early entrant in the market b. Another observation was that non-hospital market and lowpriced medical items would be of prime importance in the days to come. FormPrint was an early entrant into the 3D printing industry. Technology advancement in prototype manufacturing process c.25 Billion in 2012 and would reach $3 Billion within one year with a y-o-y growth of 33%. FormPrint was known for selling products with high quality and with technical sophistication at premium prices. #D printing industry had a worldwide market of about $2. 80% of the Ortho sales to Large customers (more than 200 beds) f. It primarily focused on healthcare industry with products for Dental. High product quality d. product related info on the company’s website . Problem Statement: In what ways can Willis weigh options between ISR approach and direct sales approach for the sale of Ortho500 which would result in favourable sales results and hence profitability for FormPrint in the short-run.9 million by the year 2013.Overview The company FormPrint was founded in the year 1998 by an engineer who constructed prototypes from three dimensional designs using additive manufacturing principles. Auditory and Orthopaedic usage. three dimensional forms and later transformed into physical products through a printing device. Wide product range e. Situation Analysis: a) Company a. The Company has been basing its value proposition and approach on selling best-in-class product performance at premium prices. a PR campaign. 2016 the details aren’t yet known.c) Competition: For Ortho500 Company Ashokal DragonBend LoganSatr PrintFlex FormPrint Market Share 25% 17% 12% 20% 22% Growth Rate 73% 43% 42% 85% 74% Price Range <$100k $100k-$300K $100k-$300K <$100K $68000 It is observed that with PrintFlex at 85% growth year on year and Ashokal growing at 73% under the price ranges similar to that of FormPrint. Plus there are two PC manufacturers scheduled to be entering the industry by 2015. d) Buying Process of 3D printers: Ortho Surgeon Requests Hospital Services Hospital Board grants approval Purchasing department evaluates vendor quotes Price Negotaition e) Timeline of Events: 1998 FormPrint was founded 2002 Focused on healthcare apps 2013 •FormPrint had sales of $42.9 million • Plans to step into low priced products 2014 Scheduled to launch Ortho500 . $120000 Medical Device Tax – 2.30% of salary .3% ($1564) Number of salesmen currently Selling Price/Ortho500 Total cost of salesmen/ortho product Total cost to company for salesmen Devices sold/salesman Number of units to be sold to breakeven 6 $68000 $100000 $600000 (One ortho500/salesman) Ortho1700. Ortho2000. Sell through Direct Sales Force Pros Cons with Invaluable relationship hospitals Take less time to demonstrate due to prior knowledge Follow-up training to the users Loyalty is the utmost priority An opportunity to develop selling skills for the non-hospital market Not much experience with the financial negotiations Not motivating for the price it is getting sold . Ortho1300. Ortho500 9 ($600000/$68000) 2.$400000 o o Salary – 70% of salary . Sell through Independent Sales Representatives (ISRs) Pros Cons Sales and negotiation experience Direct product demonstrations Shorter sales cycle of 2 months. Hence limited risk Lots of experience with lease and other financing arrangements Hiring freeze and hence there is a need of creating a fragmented outpatient market through ISR Breakeven Analysis: Cost of training ISR is high Less technical expertise Short term sales culture Shallow product knowledge Annual cost to company/salesperson .$280000 Commission.Alternatives and Evaluation of alternatives: 1. the market data substantiates a.Breakeven Analysis: Number of ISRs currently 10 ( Assuming) Selling Price/Ortho500 $68000 Normal Cost 23% sales =68000+15640= $83640 If a manager is included 37% of sales = 68000+ 0. may still need some technical expertise for the sales to happen.25 million which could be seen as a very fast growing market.5 million to $176. From the analysis above it is clear that the company will have to sell more number of units compared to that direct sales force. recommend FormPrint to pursue its sales via its direct Salesforce considering the potential that the industry has in the coming days for the small printers. The product in the industry being sold. This will also be an opportunity for the company to groom their salesmen to sell these less technically complicated 3D devices to the smaller hospitals and outpatient clinics. Increased use of Direct sales force for the sale of Ortho500 Hence we. . Low use of ISR given the product complexity b. as a group. Also there is some amount of risk involved given the shallow product knowledge and short term sales culture of Independent Sales Representatives. though not that technically complicated one.37*68000= $93160 Assuming atleast 10 ISRs the company has = $93160 * 10 = $931600 Number of units to be sold to breakeven= 931600/68000=14 Recommendation: The US healthcare market had grown by 78% in the year 2013 from $98.