Product details

Endius Inc, a start-up company, had developed a prototype of a new and promising surgical instrument, a steerable surgical forceps, by the spring of 1996. Tom Davison, the company''s new President and Chief Executive Officer, recognized that, although the prototype had served its basic purposes - proving the concept was technically viable and that surgeons were eager to use such an instrument for minimally invasive surgery - the prototype design was too costly for a commercially successful product in an era of managed care and other initiatives aimed at controlling health care costs. Because of limited cash and external resources and the need to enter the market as soon as possible with a viable product, Endius outsourced product development to Product Genesis, a product design consultancy. Now, Davison has to establish a target cost to ensure that the final product will achieve the market acceptance necessary to not only provide needed cash flow but also to build Endius'' reputation and customer base for follow-on products.