Traditional Sales Model Markets PDF

SWIFT Assignment II
Submitted To: Submitted By:
Prof. Banikanta Mishra Ritika Khurana (027)
Prerna Lall (025)
Akanshya Mohanty (039)
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What has to be true about the market, competitors, and company’s operating performance
for each to be successful?
1. Traditional Sales Model
Markets - The market's financial stability would be essential. Except for the most well-funded
research organisations, sequencers were prohibitively expensive, costing hundreds of thousands
of dollars on average. Grants and government support, even for well-funded research
organisations, can be unpredictable.
Competitors - The incumbents are directly challenged by this model. Genapsys' sequencers are
already identical to Life Technologies'. Apart from the four advantages described in the instance,
the corporation would need a more long-term competitive advantage.
Company’s Operating Performance - In order to compete with Genapsys' low-cost pricing,
competitors are likely to lower their rates. Genapsys will have to optimise its manufacturing and
distribution in this situation to allow for even further price decreases if necessary.
2. Razor & Razor Blade Model
Markets - Small businesses should not outsource this necessity because of management's
projection regarding pent-up demand for affordable sequencers.
Competitors - Because Genapsys intends to grow the pie rather than take a piece from its
competitors, there should be little cause for concern unless competitors follow suit.
Company’s Operating Performance - For such a scenario, a significant amount of capital is
already necessary. Before Genapysys to attain substantial sales volumes, the company needs to
have enough working cash to meet daily operational expenses.
3. Data Analytics
For Markets - The market is ready for tremendous potential; hospitals and government
institutions are excellent sources of high LTV consumers, and with the correct technology, retail
sales will be conceivable as well. The Network Effect will open up even more possibilities for
growth.
Competitors - In this space, having first mover advantage is really important. There is a lot of
room for profit and expansion; competitors should not take advantage of their advantages and
enter before us.
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For the Company's Operating Performance - Throughout the project, operating costs are 5%
higher than the other models, with a significant drop in FCF after the fifth year. Genapsys should
have a well-armed and well-funded partner by his side at all times.
What are the major risks of each?
Traditional Strategy
● Strategic Tension
○ GenapSys' conventional strategy is to undercut the market's major players in
terms of pricing and target the same consumer segment as them. In order to
maintain market share, competitors will most likely lower their own rates, as they
did previously in a similar situation.
○ Given that Genap Sys is a young company with limited resources compared to
established competitors, it may be forced to declare bankruptcy if it is unable to
obtain sufficient market share and maintain profits.
○ Many of their customers rely on grants and donations to help them make such
purchases. In terms of estimating demand, these sources of funds are
untrustworthy.
○ Genap Sys is mostly reliant on one-time machine purchases and regular cartridge
purchases by a small set of customers. It does not have a consistent and regular
customer base who are loyal to them.
● Financial Tension
○ It has a lower NPV than Data analytics model but slightly higher NPV than Razor
and Razorblade strategy
○ The model has a lower terminal value as compared to the other models
○ If the anticipated demand falls short then the company will struggle to scale
Razor and Razor Blade Strategy
● Strategic Tension
○ While this strategy seeks to target clients that are not in the same category as its
competitors, competitors may perceive it as a threat and retaliate. The corporation
will not be financially capable of dealing with such a situation.
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