1.
Biosonics Incorporated has a few notable internal strengths. First, Biosonics seems to have capable people operating and working for them. The text claims the few employees they have can “wear many hats” although they are inexperienced at running a business. The three people that developed the idea and brought the company together seem to have more than enough experience in business, biophysics and medical research. Second, the company is starting to experience profit after two years of losses. Their growth even required them to move to a larger facility. Third, they seem to have a good product. Their product is superior and offers a better ease of use than their competitor.
Even with the strengths Biosonics brought to the table, they seem to be weighted down by many internal weaknesses. They don’t have the credit or extra cash flow needed for research and development. They only have one product available that they are currently working on. This lends to problems due to the medical field rapid changes, someone else could be developing a product that could make theirs irrelevant. The have little marketing strength needed to reach all of the physicians and hospitals in the country or globally. The product they are developing also requires many regulatory guidelines and issues that can be very expensive to adhere too.
Biosonics is developing new applications of their product to improve the uses and making it more versatile. This requires more research and more money. They could focus on the original product a plan which would grow and generate profit. However the downside is having all of your money tied into one product.
2.
Threats in the industry and competitive situations include hundreds of other companies providing a wide range of medical products. The rivalry among the firms is very high. Biosonics is a very small company competing with larger companies that can afford to research and develop better products long-term. Their competitors offer “like” or substitute like products, however they are not the same quality as Biosonics. Related technology is rapidly changing and product life usually is only a few years. They compete with an American Company that can do a better job marketing and distributing, which is a huge threat to their success. They also have to defend their patents from competitors who might try and take advantage of them because they are the “little guy”. Due to the high cost related to product and development, potential entry of new competitors is probably very low.
Biosonics does have a couple of industry and competitive opportunities. The text states that in the US medical equipment reached sales of 60 billion. This leaves many opportunities for Biosonics to grab. Their current product might be able to be redesigned to capture more of this market as well.
3.
New legislation or guidelines developed by the government, including the FDA can have a great impact on the success in the medical field. Changes in this area could cost more money to developed and test products.
A few economic trends might have an impact on Biosonic’s business. Interest rates, inflation, and disposable income are some. The economic environment of Biosonic’s buyers is a factor that can affect their business environment. With this new technology this medical part is not something I would call a necessity. So the economy could have a lot to do with generating money from loans and credit ratings. Existing technology is maturing at a rapid rate in the medical industry. Changes in the technological environment could have some dramatic effects on Biosonics that can pose both opportunities and threats for them. The medical industry is constantly changing and updating products, making product life short-lived. Biosonics seems to be committed to a particular type of technology, and has major investments in equipment and training. If new, more innovative and cost-effective technology emerges, depending on what it is; it can harm or help their business. The key to beneficial technological advancement lies in Biosonics to accurately predict future technological capabilities and their probable impacts so that they can use it in their favor.
4
The primary potential customers of Biosonics are hospitals, urgent cares, doctors and specialist. This trickles down to patients being the secondary customers. Their needs include having quality medical equipment, accurate, safe, cost effective, and time efficient are also important factors. The spending power of Biosonics customer base depends on the area they are doing business with. Areas where the economy is better could afford better and more expensive medical equipment. Poverty stricken areas and countries that don’t offer medical care to their citizens, probably will not be interested or can afford sophisticated medical equipment.
5.
• Partner with a larger company to obtain resources to expand in other medical areas -This would give Biosonics the money they need to continue with their research.
• Sell company/patents -This would offer money for their investments and possibly a profit, without the threat of losing all of their investment later on.
• Try and secure a loan of their own- This seems doubtful because of amount of debt they currently carry. But probably is worth a shot before any other decisions are made.
• Focus only on their current product, which forecast modest gains- Peters believes if they focus on their current product he provide a good return. This option does not guarantee a return.
6.
Given the internal and external conditions, the management team’s preferences, and the financial projections, I would recommend trying to partner with a larger company. Biosonics current product encompasses a lot of strengths. It is a quality product that can change the way doctors test patients and can even cut cost and time on surgeries. There seems to be something here that is worth continuing.
Most of their weaknesses involve lack of money and resources. Partnering with a larger company that can offer those resources would be very beneficial. If they sale their business and patents they are losing a major opportunity with being a part of what this product can potentially be capable of.
A partnership with a larger financial stable company is also a good idea if the current partners are not emotionally ready to part with the business they started.