The BOC Group: Ohmeda (A)
Marketing Management

Company Analysis:

Ohmeda, a wholly owned subsidiary of the BOC Group, operated historically in three key areas: medical equipment, gases, and supplies. In 1985, Ohmeda’s president, W. Dekle Rountree, was planning to exit gases and supplies in order to focus solely on high-tech medical equipment. Through this shift in strategy, Rountree was hoping to grow equipment revenues from $95M in 1985 to $158.5M in 1990.

In order to execute successfully on his growth plan, Rountree would need to re-assess Ohmeda’s marketing channel strategy. In 1985, 43% of equipment sales ($41M out of $95M) were booked through dealers. Dealers provided increased coverage, but also carried significant …show more content…

Competitor Analysis:

Ohmeda’s competitors varied based on product. In the anesthesia segment, Ohmeda was the clear historical leader, but its market share had declined at an alarming rate from 65% to 45% in recent years. Meanwhile, N.A. Drager, who entered the market in 1976, had grown to 35% market share by 1985. Drager’s equipment was sold through 20 exclusive full-service dealers.

In the infant care segment, Ohmeda possessed 13-39% market share and competed primarily with Healthdyne/Air Shields (H/AS). H/AS was the clear market leader with 34-61% market share and sold its products primarily through ‘exclusive’ dealers (in practice). 90% of these dealers also serviced H/AS machines. In addition to its 100 dealer reps, H/AS also had a small 15 person direct sales force.

In the respiratory therapy segment, Ohmeda possessed just 10-15% market share and competed with four major companies, all of whom had larger market share. Two of these companies, Baxter-Travenol and Siemens, relied solely on their large direct sales force, while the other two used a combination of dealer sales and direct sales.

In the patient monitors segment, Ohmeda’s market share was just 4%, significantly lower than its two largest competitors, Hewlett-Packard and Siemens. Both of these competitors possessed 25%+ market share and relied solely on their large direct sales force.

In the