The primary concern of all these people at HMC is reducing the budget deficit through price reduction and Joanne is charged with a specific task. She will make all efforts to reduce prices without considering other factors. The other divisions report rapport with end-users but the key persons at HMC are obviously Stan Delaney and Judy Koski who have the authority and capacity to look beyond mere prices and weigh the value of services offered by BD.
Ted Barber, of City Surgical, has worked at HMC and is today has a 'strong lock' on supplies to HMC, supplying 80% of their requirements of medical supplies. Though he is out of the organization he wields considerable influence on HMC. His concern, naturally, is the good of his own distribution company.
Becton Dickinson (BD) is faced with the threat of global competition and must change to meet it. Ed Haire was wrong; the competitor is no fly-by-night organization. Terumo products were being used earlier and the needles and syringes have also been approved. Terumo has a product portfolio of more than 1000 products and has 28% share of the overall world market and 33 % share of the market in syringes and needles. They have recently begun production in the US any misgivings the customers have will be allayed through a product manufactured in the US. BD shall also have to compete in the international market, especially once the Singapore plant commences production.
Driving this change has to be the CEO, Raymond Gilmartin. The chief of Supply Chain Management, Alfred Battaglia, is one of the few people in BD who has hands-on experience of the advantages of consolidation of marketing, sales and distribution and will be vital for forming new policy and help to convince other personnel of the advantages of multidivisional marketing. Any change in marketing structure has to involve Mark Thordahl who is charged corporate planning. Noah Gresham and his team of Deelo and Gormally who handle national and key customers will be the key players in change implementation. Bette Weber, Corporate Marketing Manager and Naz Bhimji shall also have important roles to play since they head the 'largest opportunity' areas.
The primary concern of this guiding team has to be the challenge BD faces in adapting to the changing market scenario. Smaller players will continue to emerge and compete against individual divisions through price reductions and other marketing efforts. The divisions will find these situations difficult to handle by themselves. HMC is just one case that reminds the management of the urgency of the situation.
Giving a price reduction to HMC is an exercise in fire fighting; BD must strategize its options to stay ahead of the competition. BD has correctly identified the path - multidivisional marketing. However, BD needs to retain HMC in its customer portfolio. BD must prepare an overall plan based on its range of products and advantages accruing from multi-division marketing where HMC has to be demonstrated the advantages of buying BD products. Given HMC's financial position the advantage has to be measurable in money terms and must be shown to be much more than the 15% discount offered by Terumo. Expertise for making such a presentation exists in the company and 10 days is adequate.
A tremendous marketing opportunity presents itself to BD. It can use this chance to improve its market share and profitability.