Orthoteks USA (A case study analysis)

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Sita Kasinath Jayaprakash Rajeesh

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Organisational Culture

Major Issues Faced By Hans Wyss

Orthoteks USA was supervised based on trust by the four doctors while they had no financial or operating control. The doctors believed that success rates were just due to their products and the sales team didn't matter much.

No sense of urgency despite serious marketing, organisational & financial problems. 7/20/12

Marketing

Threat from large competitors like Bristol-Myers, Pfizer etc having a large sales force. Competitors developing replicas of Orthoteks products. Competitors ability to invest huge money in product promotions. Competitors having a well paid sales force than that of Orthoteks. Competitors marketed a full line of orthopaedic products like bandages, Slings, braces and even Hip & Knee prostheses rather than just internal fixation there by generating more profits. Present and future market of Internal Fixation was quite unclear.
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resistance by orthopaedic surgeons

Manufacturing & Cost

High prices paid to Institut Hoffman & Frankl. Orthoteks USA had to pay a price based on Swiss List Price 2.5times the full cost of manufacturing. A product that cost Hoffman 1$ to make would have a Swiss List Price of $2.50 and cost Orthoteks USA $1.50. Also Orthoteks USA had to pay a 7% royalty to Orthoteks Chur thus increasing the cost price to 60% higher than the manufacturing cost.

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Finances

In early 1977 Orthoteks USA was close to bankruptcy. Unwilling to invest in US Operations. Large outstanding Loans. Huge payables due to weak Dollar against Swiss Francs. High cost paid to manufactures squeezed cash flow

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Actions To be Taken By Hans Wyss To Assure Success Of Orthoteks USA Marketing

Construct a detailed market plan. Decide on which segment to target. Number of sales force required and their compensation. Plan to overcome resistance of the American orthopaedics. Negotiate for a lower transfer price from Hoffman & Frankl. Negotiate the rights to build a US

Manufacturing

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Recommendations For Hans Wyss Organisational Culture

Decentralisation of Orthoteks USA and Hans Wyss should be fully responsible for its profits. The culture of supervision through trust should be avoided and should have better control of operations and finances. Workforce should be considered as vital resource with due recognition. Organisation should be driven by numbers rather than reputation. Everybody should be made to understand 7/20/12 goals and the vision of the company the

THANK YOU

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