Skim Pricing and

Penetration Pricing

Mital Patel

Medical Equipment

September 6, 2008Toshiba Medical Equipment

• ST. ELIZABETH MEDICAL CENTER IS FIRST COMMUNITY HOSPITAL TO INSTALL THE Aquilion ONE DYNAMIC VOLUME CT IN EMERGENCY ROOM SETTING

• 320 Slice CT scanner• Typical is a 4 or 16 or 64 Slice scanner• The Aquilion ONE, the world's first dynamic volume CT

system, can help doctors diagnose stroke and heart disease in mere minutes, rather than in hours or days. St. Elizabeth, which serves more than 300 stroke patients annually, is the first community hospital in the U.S. to install this revolutionary technology in an ER setting.

• Article Link

Toshiba's High-Powered CT Scanner Could Save Your Life in a Heartbeat

Aquilion 1

• It can scan a Heart in one rotation.• Scan a whole Organ in less than 10 seconds.• Pediatric patients take ¼ of the dose they take at

current time.• Clear and detailed images.• The only machine of its kind.• You can do a CT and a Perfusion study at the same

time.

Price and Technology Comparison between Vendors

Product Purchase Price

Annual Service

Hitachi 16 Slice CT $500,000 $80,000

GE 64 Slice Hybrid CT

$850,000 $100,000

Siemens 128 Slice CT $997,000 $112,000

Phillips 256 Slice CT $1,400,000 $192,000

Toshiba 320 Slice CT $2,400,000 $230,000

Skim Compared to Penetration

Toshiba Other Competitors

Skim PricingToshiba

More appropriate when the firm is more focused on profitability, rather than unit volume.

Most likely to occur at early stages and late stages of the PLC.

Favorable conditions:• Considerable differentiation. (Latest and

Greatest)• Quality-sensitive customers. (High volume,

Quality care) • Sustainable advantage. (Only one in the market)• Few competitors. (NONE)• Few substitutes. (Give the patient more dose,

exams done on two separate units)• Difficult competitor entry.

Penetration PricingCompetitorsMore appropriate when business is focused on building unit volume.Most likely to occur at the early stages of the PLC.

Favorable conditions:• No/Limited differentiation. (Same Technology)• Price-sensitive customers. (One facility low

volume)• No sustainable advantage.• Many competitors. (All but Hitachi )• Many substitutes. • Easy competitor entry. (Old Technology)

Breakeven on purchase

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