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Executive Summary

Describe about the Marketing for Case study on Cyberdyne, A Leap to the Future.

Cyberdyne Inc. is a Japanese company that deals with robotics and technologies. The company is well known for its marketing and distribution of Hybrid Assistive Limb (HAL). HAL is useful for the physically challenged patients who are unable to have control in their limbs, which resulted from the malfunctioning of the nervous system. HAL has its other benefits such as rehabilitation and treating the patients ( 2016). In order to approve the use of HAL, Cyberdyne had applied to the Food and Drug Administration (FDA). However, after the approval of the HAL, the company faced problems related to the marketing plan that highlights the problems about selecting a target market, pricing, sales channel management and advertisement and promotion. The company has been unable to make a decision regarding, which audience to target and what pricing strategy to follow for the business. Moreover, the managers of the company fail to determine whether to build its sales force or outsource its sales to the medical-device representative sales firm. Another serious challenge of Cyberdyne is to decide the type of consumer promotion for HAL.

The aim of the project is to focus on the challenges faced by the robotics company Cyberdyne, Japan. The company launched a product named HAL in order to bring innovation in its products. However, as the company faces various issues after the approval of the HAL system, the managers are concerned about the further growth and development. The study deals with the problems encountered by the company and the solutions that can be used in order to minimize the challenges and the risk factors. The company focuses the US market where there is the huge number of medical cases every year relating to stroke, SCI, and other disorders. HAL is an active device that is a solution to the patients. The situation analysis is performed in the study to analyze the market of US and the scopes available for Cyberdyne. Based on the information obtained, the recommendation has been made that might help the company to achieve its strategic objective and increase profitability. Justification has been made on how the recommended strategies might be useful to the enterprise.

5 C’s framework:

The 5 C's framework helps the company to analyze the market of Cyberdyne and the marketing of HAL. In the opinion of Armstrong et al. (2012), a 5 C's framework is a tool that is used to evaluate the five vital areas of a market namely the Company, Customers, Competitors, Collaborators and Climate.

Situation Analysis and Evaluation of Options of Cyberdyne in US Market

Company- The position of Cyberdyne is analyzed in the market on its competitors. The SWOT analysis is used in order to investigate the internal as well as the external factors of the company (Gordon 2012). The study will help the company to evaluate the effectiveness of HAL. The company analysis allows Cyberdyne to analyse the US market that helps them to design the HAL product according to the need of the market.

Customers- Cyberdyne needs to have perfect knowledge of the customer's needs for which researches has to be carried out for market segmentation, the quantity of products and services required, retail channels and the perception of the customers. The customers are the backbone of Cyberdyne as the revenue collected depends on the customers. The customers as per this case are the patients suffering from stroke, SCI and other disorders.

Competitors- A detailed knowledge about the competitors, their products, and their strategies will help the company to retain their potential customers and gain competitive advantage. The top competitors of Cyberdyne in the robotics industries are KIPU system, Macro enterprises, Grey Orange, ReAbility Online. Improper knowledge or wrong information about these competitors can reduce the productivity of HAL business.

Collaborators- Cyberdyne will be able to successfully enter the US market if it identifies the efficient collaborators such as the suppliers, distributors. The collaborators are the medium through which the HAL device can be reached to the customers and thereby the objectives of the company can be met. The company collaborates with the government of the marketing nation that helps to provide mediclaim to the patients that increases the revenue of Cyberdyne in the HAL business.

Climate- The barriers and the limitations that Cyberdyne might be able to face while trying to enter the US market has to be determined that can be done through the PESTEL analysis. The huge number of cases related to stroke, SCI, nervous breakdown and other disorders helps the company to enter the market with lesser risk and barriers.

The 4 P’s framework is the marketing tool that will support Cyberdyne to know the ways in which the company can position its market offering of HAL medical device in US market.

Product- The product that Cyberdyne is mainly concerned about is HAL, which initially has been a non-medical device. However, in order to get HAL approved for the usage in the medical field, the clinical traits were launched in Japan and Europe (Morgan, Katsikeas and Vorhies 2012). The innovation in the product has been initiated in order to satisfy the customers by providing higher quality treatment.

5 C’s Framework

Price- The price of the HAL medical device had been set calculating the expenditures. The price set by for the product was 500 Euros for one 60 minute session. In order to increase the capacity of the users, the company offered packages of 20, 40 and 60 sessions at an affordable range. 

Place- The Company will be able to carry out the business of HAL efficiently if it carefully chooses the operating market. Cyberdyne intends to operate in the market that is economically stable such as the US that represents 38% of the global market share. 

Promotion- Promoting and advertising the product needs to be done effectively such tat a larger mass of customers are aware of the HAL medical device. The promotion process depends on the market structure in which Cyberdyne targets (Rahmani, Emamisaleh and Yadegari 2015). The promotion can be carried through TV, radio, newspaper, social media, and direct approach.

As per the case study, Cyberdyne targeted the US market where there was a huge opportunity for the HAL device as studies revealed that 795,000 people of US experiences strokes per year. This is a huge option for the company to operate in US market. The usage of HAL helped to survive some patients. However, there was a higher financial burden on the patients and the healthcare system of US. On the other hand, there were 12,500 cases of Spinal Cord Injury (SPI) in the US every year. Cyberdyne provided treatment in the acute and rehabilitative phase. 100 facilities offered SCI care in the US. Therefore, Cyberdyne had huge scope in the US market that can be used effectively to increase the revenue earning of the company.

Although Cyberdyne has huge scope in the market of US, the company needs to develop certain strategies that will help them to operate smoothly in the market. As per the case study, it can be inferred that the pricing strategy of Cyberdyne for its products and specially HAL is not every effective. The price of the treatment is too high that imposes a burden on the users. This can cause the customers to switch to other alternative options of treatment available in the market (Huang and Sarigöllü 2014). 

As the company is facing issues regarding the high price for the treatments from its patients, Cyberdyne can plan effective pricing strategies that will help to reduce the price of the product without degrading the quality of treatment provided to the patients suffering from stroke and SCI in the US. The managers of Cyberdyne can adopt suitable pricing strategy that will help to set a perfect price for the treatment offered to the patients (Sussex, Towse and Devlin 2013). The current pricing structure of the company charged huge rate of the lifetime cost from the patients of stroke and SCI. The reduction of the cost will help the company to attract more customers and increase revenue since the treatment is effective and successful.

4 P’s (Product, Price , Place, Promotion)

The recommendation obtained from the case study is not very effective as the company, and HAL mainly focused on the SCI even though the size of the market facility for stroke is higher. The demand for the treatment in the stroke market is higher than the SCI market. Moreover, the healthcare centers of US provides Medicare for the stroke patients, which is unavailable for the SCI treatment (Groves et al. 2013). Thus, the patients suffering from the stroke can afford the treatment easily than the SCI patients. Cyberdyne thus needs to target both the stroke and the SCI market to become more efficient. Furthermore, as the direct sales force is costly for the company, it is advisable to choose the alternative method that will benefit the company.

If Cyberdyne tries to apply the recommended strategies in the business, it might result in ineffectiveness due to the obstacles that will follow during the implementation (Ferlie et al. 2016). As the stroke market has fluctuations resulting from the difference in the severity of the impairments, the price discrimination issue might occur. In order to deal with the situation, price structure based on the severity should be determined to avoid complexity. The other issue that the company is likely to face while reducing the price is the challenges in the cost reduction. Moses et al. (2015) mentioned that the market demand needs to be analyzed that will help to reach the optimum price level without creating the loss for the company. If the demand for the  HAL in the treatment is high, a lower price will increase the revenue collection of the company. In order to achieve the goal, the level of customer satisfaction has to be improved.

The effective pricing strategies that can help the company to achieve its objectives are premium pricing, penetration pricing, economic pricing, price skimming and psychological pricing. Cyberdyne can adopt the premium pricing strategy only when the company offers unique service to the customers. In such a case, the company can charge a higher price as the availability of substitutes is either absent or less. However, as stated by (Gobbi and Hsuan 2015), penetration pricing can be followed by the company in the US market, according to which, the price of the products has to be lowered so as to attract more customers. The price can be lowered only if the company minimizes the input cost through cost management.

Recommendation of Strategies

From the given data it can be stated that the stock price of Cyberdyne, Japan has not been changed much since the mid of 2014. In the first half of 2014, the stock price of the company had fallen adversely, which is undesirable. The sales of the company had increased that indicates the healthy financial position of the company. In spite of the positioning of the company and the strategies used by the company, there prevails a certain amount of uncertainty in the study of cost-benefits (Deif 2012). Therefore, the outcome of the strategies might differ from the expected outcome.

Cyberdyne can, therefore, apply the sensitivity analysis to measure the degree of uncertainty within the company for an efficient assumption. There are various methods of carrying out sensitive analysis such as the partial sensitive analysis, best-case and worst-case scenario, Monte Carlo analysis, breakeven analysis. The sensitivity analysis helps the managers of the company to understand the level of risk or uncertainty present in the decision and thereby allows deciding effectively (Chandra, Holmes and Skinner 2013). The partial sensitivity analysis will help the company to determine the amount of benefit the company can enjoy by reducing the price of HAL usage at different level. The company can accept the reduction level that provides the maximum benefit with less risk. The breakeven analysis is also an effective method for efficient assumptions. The analysis will help to determine the impact level of the strategies required in order to equalise the costs and the benefits (Gal and Greenberg 2012).

From the given data of the Cyberdyne, it can be analysed with the help of the sensitivity analysis that change in the number of employees causes the sales to increase. Over the past five years, the number of employees has increased from 60 to 104 since March 2010 to March 2015. Simultaneously, the sales of the company increased from 107,462 (thousands of Yen) to 588,631 (thousands of Yen). Therefore, it can be concluded that increased number of employees increases the productivity of the company. The sensitivity analysis infers that the company is highly sensitive and a small change in the number of employees causes huge impact on the productivity of the company. Furthermore, the increased in the sales helps to reduce the incurred loss of Cyberdyne. The greater sensitivity highlights that more the sales more will be the reduction in the incurred loss and the net loss of the company.

Justification for the Developed Recommendation

After studying the case of Cyberdyne and HAL, it can be stated the introduction of HAL in the medical field by the company has been useful in providing support and cure to the patients in Japan, Europe, and the US. However, the strategies followed by the company are not much effective as they charged a high price that decreased the affordability power of the patient because of increased financial burden. As the product is effective, lowering the price would increase the revenue earned by the company.

The effective strategies that have been recommended to the company to develop its marketing process are the implementation of the price strategies such as the premium pricing and the penetrating pricing strategies that will help to reduce the price of HAL. The promotion of the product had not been given priority as the company aimed to target the medical community. However, promotional campaigns to promote the HAL through online and offline methods can be an effective measure to grow and develop the business further in future in US market. 


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