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In: Operations Management

BioSense Prosthetics Inc. is a market leader in prosthetics and earns very high profits. The company...

BioSense Prosthetics Inc. is a market leader in prosthetics and earns very high profits. The company has developed a computerized prosthetic arm and is trying to decide when to introduce it to the market. What options does it have?

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Expert Solution

BioSense Prosthetics is a market leader in prosthetics and is also earning very high profits. This bit of information clearly states that company's existing product line is very successful and highly acceptable in the current market.

Now company has gone one step ahead and developed a computerized prosthetic arm and the question arises is whether to introduce it to the market or not.

This computerized prosthetic arm will surely be more advanced, more feature rich and thus will be much more in demand compared to the existing product range of BioSense. Intoducing this product in the current market can lead to "Cannibalisation" thus hindering in current product portfolio sales figures of BioSense. It can lead to competition with own products of BioSense which will be counter productive.

So, company has two options:

1. Not to launch this computerized prosthetic arm right now and wait for the right time to prevent cannibalisation.

2. BioSense can launch this product with niche strategy wherein this product can be priced and advertised as a super premium product line which does not conflict with the existing product line's pricing and segmentation. Then this product will target and attract a very premium line of customers and will not eat away the current product's market base.


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