The Global Entrepreneur – medXLocal: Success in Europe?

The Global Entrepreneur – medXLocal: Success in Europe? Company and Product Background: MedXLocal Inc. is a small manufacturer of portable X-ray equipment based in Detroit, MI.  The company wa s founded by Dr. Jonathan Rubis, Dr. Judith Tomich, and Ricky Thompson.  Dr. Rubis is a ph ysician with specific expertise in diagnostic radiology.  Dr. Tomich holds a doctorate of veteri nary medicine.  Prior to forming MedXLocal both were practicing doctors – Jonathan in a local hospital and Judith in a private veterinarian practice. Ricky is an electrical engineer.  The company was founded in 2007 and manufacturers a line of portable X-ray equipment primarily used in ambul ances or other locations where portable X-ray equipment is needed. It was Judith that first had the idea for the produc ts that ultimately led to the formation of MedXLocal.  Her veterinarian practice specialized in large-animal health and she had used portable X-ray equipment when visiting farms, es pecially for bone fractures in horses.  Though quality of image was sometimes an issue, the portabi lity was critical.  Equipment costs were high, but the practice could justify the expense given its specialty with large-animals. During a chance discussion with her long-time fri end Dr. Rubis, she was surprised that Jonathan mentioned he continued to be frustrated at the quality of affordable, portable X-ray machines. Though such machines were widely available, he c ontinued to believe that further cost reductions could be achieved, yet still maintain important features such as ea sily storing images. The company may have never been started had the tw o not met Ricky Thompson.  Ricky was an electrical engineer with past experience in X- ray equipment.  In discussions with Jonathan and Judith, the three agreed there was untapped potent ial to further improve on existing portable X- ray equipment.  With Judith’s extensive fiel d experience, Jonathan’s diagnostic radiology experience, and Ricky’s electrical engineering ex perience, they soon deve loped prototypes.  By 2005 a patent was granted, and in 2007 sales began. Initial sales were slow due to strong competition and entranced brands including Kodak and Konica.  However, MedXLocal took a strategy to primarily focus on the ambulance market. Notwithstanding the challenging years of 2008-2 010 the company was able to grow sales from zero to $5,000,000 with an average per unit price of $50,000.  About 60% of the sales came from ambulance companies, with the remaining sales to traditional markets (s ports arenas, cruise lines, nursing homes, etc.)  However, with the company’s strong focus on the emergency medical services (EMS) sector, it’s sales were also quit e regional.  Nearly 75% of their sales were to Midwest and East Coast buyers.  Sales were direct to the buyers. International Expansion :  MedXLocal had very little international sales prior to 2009.  It had made a couple of sales into Canada, but otherw ise no exports.  This primarily reflected Jonathan’s perspective that the U.S. market was the company’s only priority.  With sales mainly focused regionally, he felt the rest of the U.S. market was untapped.  He was convinced their focus-strategy in the EMS sector was a winning st rategy that simply needed to be duplicated in other states.  He also felt direct sales was the only profitable way to grow.  His long term goal was to grow the firm to at least $25,000,000 and then se ll-out to a larger medical products company. Judith disagreed.  She felt they needed a more balanced approach.  She had travelled extensively internationally and knew the market should be strong for their products.  However, given the early success of the firm, she trus ted Jonathan’s instincts and dropped the matter. The Global Entrepreneur – MedXLocal: Success in Europe? 1-    What should Jonathan and Judith from MedXLocal do? 2- what should Andreas do?