6.1 Operating Plan & Financial Model - Updates



Figure 6.15 in the textbook is labeled as a bottom up market model, the caption should read "A sample top down market model."


Device Makers Face Downward Pricing Pressure
According to the Wall Street Journal, “While hospitals grapple with the economic downturn and the potential effects of health-care reform, they are pushing their financial troubles onto big medical-device companies” (see “Hospitals Ramp Up Pressure On Medical-Device Prices,”  Wall Street Journal, October 21, 2009.) In the article, executives at Johnson & Johnson, Boston Scientific, and St. Jude Medical all reported that they were facing increasing downward pricing pressure in their device businesses.  Innovators should watch this trend carefully and make appropriate adjustments when developing and/or maintaining their market models as part of a company financial plan.

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