CALIFORNIA STATE UNIVERSITY, SACRAMENTO

College of Business Administration

MGMT 170 – Fundamentals of Business Strategy

CASE STUDY QUESTIONS

(Case: Haemonetics Corporation)

1. Please state in (bullet-point format) what the numbers tell us in this case.

VISION
Numbers	Implication
Current HC has only 9.6% of the world market ($14.4/150 million).

INTERNAL
Numbers	Implication
Total sales are $14 million ($10 mm domestic, 4 mm international).
$2 million in cash on the balance sheet.
Only 4% of HC’s sales are spent on R & D.
HC earns profits of $910 per unit, on units sold through its own international subsidiary, and $274 per unit on U.S. sales.
$800,000 per year is required to fund HC’s global strategy.
Breakeven for international is 879 units ($800k/910 = 879) or $2..9 million.
Projected international sales for coming year are $6.1 million.

EXTERNAL
Numbers	Implication
Competition is weak and fragmented in the U.S. and abroad.
U.S. is one-third of the world market ($100 million non-U.S.).
U.S. market is not well penetrated.
HC has a 20% share of U.S.

2. Create a thoughtful list of pros and cons of a “go global” strategy for Haemonetics in 1980 and then, taking into account the “three legs” (Vision, Internal Assessment, and External Assessment), decide which strategy Haemonetics should take in the next five year:

a. Seek first and foremost to become a global company (with the U.S. market being just one of the countries in the global portfolio)?

b. Seek to remain primarily a United States domestic company with an international arm, and thereby solidify your position in the still emerging and somewhat undeveloped U.S. market?

c. Seek some other option?

3. As Peterson, what precisely will you recommend at the upcoming board meeting? Will your recommendation be different from the strategy you developed in the prior question? Why or why not?

4. Outline a crisp set of bullet points of how Haemonetics should seek to implement the strategy you recommend in the above questions.

336 MGMT 170 HAEMONETICS CASE