Anonymous
Guest
Anonymous
Guest
Exactly...now you get it you moron. It comes full circle now.....BIO started something it can't finish. Follow me here dumb dumb...BIO doesn't have the deep pockets to play the lower pricing game that MDT can. MDT will agressively engage in the pricing game at a level BIO can't afford to play. Therefore, as BIO attempts to compete, their reps start making less and less $ while MDT reps remain whole. MDT picks up more MS and hires more staff to cover while MDT reps remain whole. BIO loses MS trying to keep up while BIO reps work harder and make less $....do you follow the trend here? BIO is creating their own demise. Your business model doesn't work long term so enjoy it while it lasts.
Actually, you're really not making much sense here. You're stating (I'm paraphrasing) that MDT can aggressively engage in the pricing game at a level that BIO cannot afford to play. Where is your support?
MDT can't play the pricing game. Lower pricing affects net margins. Selling more at a lower price is the old "make it up in volume" game. Unfortunately, if MDT were to lower prices in an attempt to do this, net margins would decrease, COGS would go up as a percentage of sales, thereby decreasing profitability. Decreased profitability means upsetting Wall Street and lower stock prices.
On the other hand, BIO can afford to lower prices because it's not worried about Wall Street. Additionally, BIO isn't top heavy (yet). BIO can afford to lower prices without cutting many personnel. BIO doesn't have a large base of implanted devices. With a large established base, MDT has to have personnel to support that base. So, if MDT were to instigate a price war, the greatest impact would occur in the field force - headcount reductions in order to maintain healthy net margins.
An example of the future is in Europe where ICD systems sell for $5k-7.5k. In Europe reps make less than they do here (however, BIO reps still make more with equivalent books of business). The sales forces there are much leaner and rely upon physicians & hospitals to do most of their own checks.
The whole concept of MDT reps staying whole is also foreign. I have several friends at MDT who have large books of business, and are making less every year even with increased sales.