Case Notes/Answers
Bergerac Systems The Challenge of Backward
Integration By David A. Garvin, Sunru Yong
Discussion Questions:
1. Describe the business and operational challenges facing Bergerac Systems.
2. Should Bergerac Systems integrate backwards into the manufacture of injection-molded parts for
its cartridges? If so, how?
a. What are the advantages and disadvantages of acquisition vs. developing in-house capabilities?
b. What quantitative evidence supports your recommendation?
3. What other advice would you offer Ian Wyckoff about his manufacturing operation?
, 4382
DECEMBER 14, 2011
TEACHING NOTE
DAVID A. GARVIN
SUNRU YONG
Bergerac Systems:
The Challenge of Backward Integration
Note: The “Bergerac Systems” case has two additional supplements in Excel format, both
available free of charge from HBP.
Product 4383 is a Student Spreadsheet that Harvard Business Publishing makes widely available. It
contains the data-based exhibits in the case.
Product 4385 is restricted to Instructors Only. It contains data from the case and from this
Teaching Note, including the “model solution” to the basic quantitative assignment that students
are expected to complete as part of case analysis.
Introduction
The Bergerac Systems case provides the opportunity to analyze the business case for backward
integration. It features a manufacturer of diagnostic instruments for the veterinary market and asks
students to evaluate a proposal for backward integration and determine what the analysis may have
overlooked. It also asks students to consider the broader topic of sourcing strategy and how it
applies to a small company competing in a growing industry.
Synopsis
Bergerac Systems is a small, rapidly growing manufacturer of diagnostic instruments used in
veterinary practices. In 2007, the company launched its OmniVue chemistry analyzer, which has
been successful, particularly among small and medium-sized veterinary clinics. To conduct a
diagnostic test, veterinarians place blood or serum samples from the pet into a proprietary cartridge,
which is inserted into the OmniVue for analysis. The sale of consumable cartridges for the installed
Bergerac Systems The Challenge of Backward
Integration By David A. Garvin, Sunru Yong
Discussion Questions:
1. Describe the business and operational challenges facing Bergerac Systems.
2. Should Bergerac Systems integrate backwards into the manufacture of injection-molded parts for
its cartridges? If so, how?
a. What are the advantages and disadvantages of acquisition vs. developing in-house capabilities?
b. What quantitative evidence supports your recommendation?
3. What other advice would you offer Ian Wyckoff about his manufacturing operation?
, 4382
DECEMBER 14, 2011
TEACHING NOTE
DAVID A. GARVIN
SUNRU YONG
Bergerac Systems:
The Challenge of Backward Integration
Note: The “Bergerac Systems” case has two additional supplements in Excel format, both
available free of charge from HBP.
Product 4383 is a Student Spreadsheet that Harvard Business Publishing makes widely available. It
contains the data-based exhibits in the case.
Product 4385 is restricted to Instructors Only. It contains data from the case and from this
Teaching Note, including the “model solution” to the basic quantitative assignment that students
are expected to complete as part of case analysis.
Introduction
The Bergerac Systems case provides the opportunity to analyze the business case for backward
integration. It features a manufacturer of diagnostic instruments for the veterinary market and asks
students to evaluate a proposal for backward integration and determine what the analysis may have
overlooked. It also asks students to consider the broader topic of sourcing strategy and how it
applies to a small company competing in a growing industry.
Synopsis
Bergerac Systems is a small, rapidly growing manufacturer of diagnostic instruments used in
veterinary practices. In 2007, the company launched its OmniVue chemistry analyzer, which has
been successful, particularly among small and medium-sized veterinary clinics. To conduct a
diagnostic test, veterinarians place blood or serum samples from the pet into a proprietary cartridge,
which is inserted into the OmniVue for analysis. The sale of consumable cartridges for the installed
