Sunrise Medical Incs Wheelchair Products Essay

8853 Words Feb 24th, 2013 36 Pages
Harvard Business School

9-794-069
Rev. October 16, 1995

Sunrise Medical, Inc.’s Wheelchair Products
In mid-August of 1993, Richard H. Chandler, chief executive officer of Sunrise Medical, Inc., reviewed his firm’s strategic plan in his office at corporate headquarters in Torrance, California, a few miles south of Los Angeles. Sunrise sold wheelchairs, crutches and other products used in the rehabilitation and recovery phases of patient care. In the 1993 fiscal year, the ten-year-old firm posted returns of 5.7% on sales of $319 million, and made Financial World’s list of the top 200 American growth companies for the third year in a row. Sunrise’s social responsibility programs also had been featured in a 1993 book entitled
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Quickie had invented the category in
1987, although Invacare had since gained share (Exhibit 2). Retail prices ranged from $850 to $1,200.
Annual U.S. sales of $70 million in 1993 were forecast to grow at 15% annually, partly because
Medicare (a U.S. government insurance program) had recently recognized lightweight standard as a distinct category from standard. This meant that reimbursement for a lightweight standard chair would no longer be held to the $650 that applied to a standard wheelchair. Beginning in the fall of
1993, Medicare would reimburse up to $850 for a lightweight standard chair.
The third-largest segment, ultralight wheelchairs, had also been pioneered by Quickie. U.S. manufacturers’ sales were $72 million in 1993 and were expected to grow at 12% annually. Ultralight models were constructed of aluminum alloy with nylon upholstery, weighed less than 22 pounds, and came in bright colors. Most first-time users were between the ages of 18 and 30. Ultralights were often used to play wheelchair sports. Retail prices ranged from $1,100 to $3,150.
Manufacturers’ sales in the power and pediatric category were $125 million, and were forecast to grow at 15% annually. Pediatric wheelchairs included manual and power models with varying features. Power wheelchairs weighed over three times as much as standard models when loaded with batteries. Direction and speed were usually controlled by a joystick mounted close to

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