Sunrise Medical's Wheelchair Products

1. The average return on gross revenue (ROS) in the US wheelchair industry is mingled with 1-2% in 1993. What are the most historic structural conditions that make the industry homely? Evaluating the industry found on Porters Five Forces framework, the following stand erupt as the most import conditions making the industry unattractive: ?Bargaining Power of Customers: About seventy-five percent of wheelchair sales in the US were covered by insurance. Medicare was the primary insurance program, and other insurers often followed Medicares lead. Medicare limited reimbursements, which kept a lid on the price of standard and lightweight standard chairs. more(prenominal) than expensive chairs were not fully covered, which could dampen demand for those products. ? rivalry Among Existing Competitors: The American market for wheelchairs was dominated by collar firms ? Sunrise Medical, Invacare, and Everest & Jennings. With perhaps the exception of some hi-tech indicator models, wheelchairs are essentially commodity products, so there is dwarfish room for differentiation. And since manufacturers set prices to conform to Medicare standards, it doesnt cost relatively more to switch from one manufacturers brand to anothers.

This beingness true, sales and sales growth were more dependent on how competitors got their products through the channel, and profitability was a slave to cost structure. In Sunrises case, its competitor Invacare had gained significant market share in every category other than ultralight (case Exhibit 2), and as low-priced producer, Invacares margins at year-end 1992 were the highest in the business (case Exhibit 3). ? flagellum of Substitutes: It costs essentially nothing to switch from one wheelchair to the next, and man there may be some minor differences between manufacturers chairs, there is no real distinguishing factor. On average, wheelchair users dismay new-sprung(prenominal) chairs every two to five years, and without anyway to lock customers in or build significant brand loyalty, users could... If you want to get a full essay, order it on our website: Orderessay

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