Align Technology
Autor: 11108084waleed • June 4, 2015 • Case Study • 622 Words (3 Pages) • 2,428 Views
WACC on Align Technology, Inc.
Company’s Introduction:
Align technology was founded by Zia Chishti and Kelsey Wirth in 1997. They introduced new technology in the field of dentist by offering that they can straighten patient’s teeth without metal braces invisibly and effectively. They Introduced invisalign system in 1999 from which they operated and did clear removable orthodontic treatment option for straightening teeth.
Issues:
- The main issue of Align Technology was that the demand of its product becomes less than its manufacturing capacity so that company was not meeting its financial targets.
- Capacity was built to match the company’s aggressive sales forecasts (Strategy- Build it and they will come)
- Company was just marketing and providing training about its product to orthodontist not to the general practice dentist but many of the case were first go to them and stop there with traditional way because GPD does not know about the invisalign system.
- 200 million people had some form of malocclusion or misalignment of teeth, while, less than 1% per year actually began orthodontic treatment.
Analysis:
There are many reasons of their issues which the company was far from profitable, with average selling price of $1600 and at an average cost of $1800 per case, the company would never reach its financial target and its technology had not yet been widely accepted as the treatment of choice by orthodontic. The company also had maintaining at least 20 % excess production capacity to remove any delivery constraints.
Options:
The Align technology should produce according to their demand not according to their capacity. They need to reduce gap between supply and demand.
As written in the case that there were just one percent people began treatment of orthodontic so there are a lot of people left. Might be they don’t know about this technology. There is need to do proper advertisement or awareness campaign to which people may know about this treatment and also rates will be shown from which people can compare rates of orthodontic versus traditional treatment.
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