Download Dr. John*s Products, Ltd. Case Study

Dr. John’s Products,
Ltd. Case Study
Lauren Katz
4/26/2016
Qualitative Analysis
Customer Value Proposition
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SpinBrush: low-cost, high-quality, and simple
electronic toothbrush
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Low-cost gives it a huge competitive advantage in
the electronic toothbrush space($6 vs. $50)
Shortcomings: water damage, wear out of brushes
“try-me” packaging and unique power/movement
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Interviews with potential customers reveals highcost objection and desire to maintain traditional
way
Meijers sells significantly more than
competition
NACDS2 Trade shows
Competitors:
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Other electronic toothbrushes are too expensive
Competing with major brands such as Colgate and
Crest that could easily enter this market for lowcost electronic toothbrushes  risky
Go-to-Market Plan
• Global market: $3.3bil, US market: $800mil
• Plan for direct distribution with large retailers
avoid unnecessary costs, have credibility
Potential partnership with Crest to gain brand
awareness would reduce risk of competition
from other big brands
Used some guerilla-marketing
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Testing / MVP
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Handed out free toothbrushes giving people
the product was effective
“try-me” packaging feature
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Innovative and effective for sales
Technology and Operations Management
• Patents on the power and packaging
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Outsource
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Patent will not prevent other companies from
developing similar tooth brushes since the
patent is specific to angles and motions
Chinese manufacturing partner reliable
Seeking computer system to track information
Team
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Small and extremely qualified have credibility
Osher not specialized in oral care or big
businesses but innovative and successful. Came
up with small businesses and selling them
Profit Formula
• $6 through FDM , $5 through retail giants
Quantitative Analysis
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Revenues= 6000units * $5.50(average of
$6 and $5) =
$33,000/day$12,045,000/yr
Profit margins are attractive and high
growth rates are sustainable
– Reports from testing show that
SpinBrush sales were 7/day per store
while typical toothbrushes sell 1/week
per store
– In 2000 they were selling 6,000 units
per day
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Global market size: $3.3 billion; US
market size: $800million  if they can
scale internationally, they would have a
huge target market
Procter & Gamble
– Highest stock prices of selected
consumer goods companies
– Market share: 8.4 low compared to
other companies
Economy/stock market is booming
– $9,274 billion GDP  people are more
likely to spend money right now 
good for sales  will it be this good
later?
•
• Merger and Acquisition Transactions
increased from $831.9billion to
$1,480.7billion in just two years
– Huge jump if they want to sell the
company now is a great time
• VC return/investments  huge increase
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Assets and Investments:
– 1998: raised $1 million, invested his
own $400,000, other managers
invested total of $300,000
– 1999: raise additional $500,000
Recommendations:
Sell company:
• Sell company to Procter & Gamble  have an upcoming meeting with them
– The extremely high economy/stock market and merger and acquisition transaction make
it a perfect time to sell the company for a great return
– Osher has no experience running a big business or in the oral care industry the huge
companies he is hold great market share and have the technology to reproduce his
weakly patented toothbrush  too risky
– Osher has been successful in the past building companies and selling them for a high
profit
– Appeal to the fact that P&G needs SpinBrush since they are not in the electronic
toothbrush market yet, and this will advance their comparatively low market share
Other Recommendations (Especially if P&G sale does not work):
• Fix the water damage issue increase consumer retention rate
• Patent any and all new features keep competition out for as long as possible
Alternative options are less promising:
• Build a new company known for innovative products
–  Unlike his experience with baby toys, there is little innovation potential in the
toothbrush industry and bigger companies would continue to keep up with their new
innovations.