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The Lean LaunchPad


Presentation examplesused in
Class 5 - Distribution Channels




                                  07/02/12
Book Publishing
Channel Example
Example: Book Publishing
             National
Publisher                 Printer   Wholesaler   Retailer   Customer
            Distributor




                                                                 2
Book Publishing
                             National
               Publisher                 Distributor   Retailer   Customer
                            Wholesaler

•Percent of      35%          15%           10%         40%
     Retail
                 $7.00        $3.00        $2.00       $8.00       $20.00



  • You get
     -35% of retail
     - the distributor gets 10%
     - the wholesaler gets 15%
     - the retailer gets 40%
          -less any discount they offer the customer


                                                                       3
Book Publishing Economics
                    National
Publisher                                   Wholesaler            Retailer            Customer
                   Distributor

        Allowances

                  Wholesale costs

                                    Bills
                                                                             Markup
                                                       Credit
                                                     guarantees
                               Payment
                              guarantees
         Payment
        guarantees

                             Return rights

                                 Credits

            Payments
                                                                                           4
Book Publishing Delivery
                   National
Publisher                          Printer       Wholesaler          Retailer
                  Distributor


 Prepare film
                                Receive
  (content)
                                 Schedules
                                 Print orders    Determine       Merchandise
                                 Bundle          allocations        titles
                                  counts
                                 Film

                                                                     Sell
                                                 Deliver orders
                                                                   magazines

 Establish        Prepare
                   galleys      Print and ship
  identity
                                 magazines
 Create
  demand

                                                  Dispose of      Acknowledge
                                                   returns          returns

                                                                           5
Medical Device
Channel Example
Product flow/Channel

Electronic                                                Partners/
  Health                   Fluid Synchrony
                                                           OEMS
 Records

             Electronic   Support Pump +        Bundled
              Records     Services Controller     Kits




                              Hospitals
                          (Anesthesiologists
Patients                   Neurosurgeons)


                             Pain Clinic
                          (Anesthesiologists
                           Neurosurgeons)
Hospitals

Pain Clinics
                         Channels (Direct)

               • Direct to institutions
                  • Some formularies involved in purchase decisions
                  • Some doctors make purchase decision directly
               • Device company/Doctor relationship is key
               • Heavily influenced by :
                  • Clinical study results
                  • Regulatory approval
                  • Reimbursement
Farm Sensor Industry
  Channel Example
Channel Model: Service Provider

                                            Product
                                             Money

            OEM                             Nutrient
                                             Data
                         Large farm




Us




                         Small farm




          USDA/EPA                     Licensing/sales
Channel Model: Service Provider

                                            Product
                                             Money

            OEM                             Nutrient
                                             Data
                         Large farm
                                       Product



Us




                         Small farm    Service



          USDA/EPA                     Licensing/sales
Dental Product
Channel Example
COST / PROFIT ANALYSIS

  Licensing Revenue Model


Per unit cost and profit estimation
          Our revenue 4-8% revenues                                      List price




                                                                                      End user
                      Univ.                Manufacturing
       Maintaining              Raw                        License
R&D                  License                    &                    Distribution
           IP          fee     materials                     fee
                                            Packaging




                                                                                          13
Licensing of Technology Ecosystem

             University           Insurance
                                   Agencies
 2-4% license fee
                                          $$$
             DMX
               R&D
             Products
            Procedures
                                 Health-Care
                IPs
                                  Providers:     $$   End
4-8% royalty                      Hospitals           User
                          ~$40   Practitioners
            Customer                Clinics
         segment: Large
           corporations
          J&J, GSK, 3M



                                                             14
Medical Device
Channel Example 2
•
•
•




•
•
•
Dental Product 2
Channel Example
Channels



   Direct Sales        Big Distributors




Private Practice   Institutional   Purchasing
    Dentist           Dentist      Department
Channels



   Direct Sales        Big Distributors

                                                80% Market Share
                                                30% Margin




Private Practice   Institutional   Purchasing
    Dentist           Dentist      Department
Channels
                                                Continuing
                                                Education    Magazines   Trade
                                                 Courses      & Email    Shows




   Direct Sales        Big Distributors

                                                 80% Market Share
                                                 30% Margin




Private Practice   Institutional   Purchasing
    Dentist           Dentist      Department
Online Rental
Channel Example
PM Tools
                                                                                               Rentpost.com
                                                             Listings                                  Rentjuice.com
                                                             Provider                          Buildium.com
                                                             Craigslist                              Rentingsmart.co
                        Potential                              Padmapper.com
                                                                                            Propertyware.com
                        Landlords                           Rent.com
                                                               Apartment.com                   propertymanagemnt360
              Show, Advise, Valuate
                                                           Forrent.com
                                                                 Rentjuice.com
       Realtors
                                                         Propertyware.co
                                                                   Trulia.com
         Sell, Advise
                                                                      Credit Checks
                        Landlords
                                                                    Safetenantcheck.c
                                                                              Erenter.com
                                                                      Buildium.com
      Property              Listings,
      Managers              Checks                       Payment Facilitator                               Maintenance
                            Rent Payment
         Listings,                                        Rentpayment.com                                    Ratings
         Checks                                                  Clearnow.com
         Rent Payment                                                                                         Yelp.com
                         Tenants                            Online Cheque
                                                                                                                   Angie’s List
                                                                 Rentingsmart.co
Maintenance
Furnishing      Moving                Find information           Maintenance Finding
       Service                                                         Zoospi.com
      Providers                                                              Redbeacon.com
                                                                     Taskrabbit.com
                                                                            Servicemagic.com             Schedule Tools
                                                                                                          Setster.com
                        Web Info                                                                                  Zoospi.com
                                                                                                                         23
Dental Product 3
Channel Example
COST / PROFIT ANALYSIS
   Direct Sales Revenue Model
                                               Our revenue   $27     List price   $40 *
 Per unit cost and profit estimation                                %32 cut




                                                                                      End user
     Raw active    Manufacturing &     Profit + R&D + License
                                                                   Distributor
     ingredient      Packaging                   fee


         $6            ? ($5)                ~$11                    ~$13



* Competition
• NuProprophy paste (Novamin$50)
• NuPro desensitizer (Novamin$93)
• MI varnish (Recaldent$100)
• Gluma desensitizer (Glutaraldehyde$130)
• Health-Dent desensitizer (Fluoride $49)
                                                                                                 25
Direct Sales Ecosystem
   R&D &                 University           Insurance
  Regulation
                                               Agencies
                           $?
                                                    $$??
 Raw Materials
 Manufacturing
                 $6/pk   DMX
                            R&D
                          Products
                                                Customer
                 $5/pk   Procedures
                                               Segments;
 Formulations                IPs
                                              Health-Care $$?? End
 &Packaging
                            -32%($27)          Providers:      User
                                               - Hospitals
                          Product            - Practitioners
                          Sales &     $40/pk     - Clinics
                         Distribution




                                                                      26
Channel Example
• F-dopa iodonium intermediate
              • F-dopamine iodonium intermediate       Precursor Synthesis
Reagents


              • ABX          • Siemens Explora
   GMP        • Eckert & Ziegler                       Precursor in Cassette
 Cassette     • GE MX module for TracerLab
Components


              • Eckert & Ziegler      • Synthra
   GMP        • Siemens Explora                        Cassette (device)
 Compliant    • Neoprobe      • TracerLab/ GE
Synthesizer

            •   Siemens PETNet
            •   GE Amersham
 PET Drug •     Cardinal Health                        Finished product
Distributor •   AAA • Iason


                                                  28
  I-Corps Final Presentation 12/14/11
Channel Example
Travel Industry
Channel Example
Travel Services:
Impact of Changing Technology
The Advent of GDS Systems (1980 -1995)
Turning the Screen Around
 Online Travel (1995-2010)

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Lean LaunchPad Class 5 Distribution Channels Examples

  • 1. The Lean LaunchPad Presentation examplesused in Class 5 - Distribution Channels 07/02/12
  • 3. Example: Book Publishing National Publisher Printer Wholesaler Retailer Customer Distributor 2
  • 4. Book Publishing National Publisher Distributor Retailer Customer Wholesaler •Percent of 35% 15% 10% 40% Retail $7.00 $3.00 $2.00 $8.00 $20.00 • You get -35% of retail - the distributor gets 10% - the wholesaler gets 15% - the retailer gets 40% -less any discount they offer the customer 3
  • 5. Book Publishing Economics National Publisher Wholesaler Retailer Customer Distributor Allowances Wholesale costs Bills Markup Credit guarantees Payment guarantees Payment guarantees Return rights Credits Payments 4
  • 6. Book Publishing Delivery National Publisher Printer Wholesaler Retailer Distributor Prepare film Receive (content)  Schedules  Print orders Determine Merchandise  Bundle allocations titles counts  Film Sell Deliver orders magazines  Establish Prepare galleys Print and ship identity magazines  Create demand Dispose of Acknowledge returns returns 5
  • 8. Product flow/Channel Electronic Partners/ Health Fluid Synchrony OEMS Records Electronic Support Pump + Bundled Records Services Controller Kits Hospitals (Anesthesiologists Patients Neurosurgeons) Pain Clinic (Anesthesiologists Neurosurgeons)
  • 9. Hospitals Pain Clinics Channels (Direct) • Direct to institutions • Some formularies involved in purchase decisions • Some doctors make purchase decision directly • Device company/Doctor relationship is key • Heavily influenced by : • Clinical study results • Regulatory approval • Reimbursement
  • 10. Farm Sensor Industry Channel Example
  • 11. Channel Model: Service Provider Product Money OEM Nutrient Data Large farm Us Small farm USDA/EPA Licensing/sales
  • 12. Channel Model: Service Provider Product Money OEM Nutrient Data Large farm Product Us Small farm Service USDA/EPA Licensing/sales
  • 14. COST / PROFIT ANALYSIS Licensing Revenue Model Per unit cost and profit estimation Our revenue 4-8% revenues List price End user Univ. Manufacturing Maintaining Raw License R&D License & Distribution IP fee materials fee Packaging 13
  • 15. Licensing of Technology Ecosystem University Insurance Agencies 2-4% license fee $$$ DMX R&D Products Procedures Health-Care IPs Providers: $$ End 4-8% royalty Hospitals User ~$40 Practitioners Customer Clinics segment: Large corporations J&J, GSK, 3M 14
  • 18.
  • 20. Channels Direct Sales Big Distributors Private Practice Institutional Purchasing Dentist Dentist Department
  • 21. Channels Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department
  • 22. Channels Continuing Education Magazines Trade Courses & Email Shows Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department
  • 24. PM Tools Rentpost.com Listings Rentjuice.com Provider Buildium.com Craigslist Rentingsmart.co Potential Padmapper.com Propertyware.com Landlords Rent.com Apartment.com propertymanagemnt360 Show, Advise, Valuate Forrent.com Rentjuice.com Realtors Propertyware.co Trulia.com Sell, Advise Credit Checks Landlords Safetenantcheck.c Erenter.com Buildium.com Property Listings, Managers Checks Payment Facilitator Maintenance Rent Payment Listings, Rentpayment.com Ratings Checks Clearnow.com Rent Payment Yelp.com Tenants Online Cheque Angie’s List Rentingsmart.co Maintenance Furnishing Moving Find information Maintenance Finding Service Zoospi.com Providers Redbeacon.com Taskrabbit.com Servicemagic.com Schedule Tools Setster.com Web Info Zoospi.com 23
  • 26. COST / PROFIT ANALYSIS Direct Sales Revenue Model Our revenue $27 List price $40 * Per unit cost and profit estimation %32 cut End user Raw active Manufacturing & Profit + R&D + License Distributor ingredient Packaging fee $6 ? ($5) ~$11 ~$13 * Competition • NuProprophy paste (Novamin$50) • NuPro desensitizer (Novamin$93) • MI varnish (Recaldent$100) • Gluma desensitizer (Glutaraldehyde$130) • Health-Dent desensitizer (Fluoride $49) 25
  • 27. Direct Sales Ecosystem R&D & University Insurance Regulation Agencies $? $$?? Raw Materials Manufacturing $6/pk DMX R&D Products Customer $5/pk Procedures Segments; Formulations IPs Health-Care $$?? End &Packaging -32%($27) Providers: User - Hospitals Product - Practitioners Sales & $40/pk - Clinics Distribution 26
  • 29. • F-dopa iodonium intermediate • F-dopamine iodonium intermediate Precursor Synthesis Reagents • ABX • Siemens Explora GMP • Eckert & Ziegler Precursor in Cassette Cassette • GE MX module for TracerLab Components • Eckert & Ziegler • Synthra GMP • Siemens Explora Cassette (device) Compliant • Neoprobe • TracerLab/ GE Synthesizer • Siemens PETNet • GE Amersham PET Drug • Cardinal Health Finished product Distributor • AAA • Iason 28 I-Corps Final Presentation 12/14/11
  • 32. Travel Services: Impact of Changing Technology
  • 33. The Advent of GDS Systems (1980 -1995)
  • 34. Turning the Screen Around Online Travel (1995-2010)