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Medium Market Entry Profitability

Diabetes Testing Meter

#Pharma #Healthcare
ProHub Comment

This is a well-structured market entry case that tests candidate ability to build a financial model and recognize that market size constraints make profitability impossible. The case forces candidates to identify cannibalization risks and think creatively about alternative strategies when the primary market is unfeasible.

Estimated Time 15 minutes
Difficulty Medium
Source UCLA
50 / 100
Our client is a laboratory that provides diabetes testing services to hospitals in the UK. They have developed a self-diagnosis meter that patients can use to do testing on their own. They have hired us to determine if we should take this product to market.

Clarifying Information

  1. UK Population is ~60M
  2. 30% of people have diabetes
  3. 5% > 65 have diabetes
  4. 20% population is > 65
  5. No growth in % or population
  6. 4 competitors
  7. Market share 25%, 25%, 15%, 15%
  8. Client has 20% share
  9. Growth was 20% until two years ago
  10. Growth since is flat
  11. Fixed cost is $25M
  12. Marginal Cost is $20
  13. Per Unit Revenue is $25
  14. Patients could opt to use both methods
  15. Product could be promoted as a prevention device (low cost option for testing diabetes)