Thursday, December 03, 2009
its been a very very long week, but instead of complaining about it i thought perhaps ill talk about something more interesting :D
ie. The Economics of Research Laboratories.
a normal lab like mine takes about at least a million dollars a year to run. there are at least 4 labs per floor in imcb alone. there are about 8? buildings in biopolis. so think about all the money floating around! majority of the money goes right into buying things: chemicals/media, disposable equipment (usually things that are required to be sterile, like pipette tips, an astonishingly wide range of containers/ tubes), non-disposable equipment (micropipettes, stands) etc.
which means theres a lot of money to be a making in the market of scientific equipment.
i met my first sales agent on my 2nd day. she spent an hour trying to convince my mentor (who, incidentally, is in charge of ordering stuff) that her pipettes were better then those of the other 10 companies vying to sell the almost same product. if you ask me, classic case of monopolistic competition. as expected, the attempt at product differentiation fails (because like i said, essentially the same product; the differences were too insignificant) and she moves right into price discrimination, except her pipettes were MORE expensive. case in point? market for pipettes very price elastic, usually my lab orders whatever that is cheapest.
these companies have also resorted to freebies to hopefully gain some customer loyalty or cut into the markets of the other competitors. gradually, my lab has accumulated in calenders of all sizes. there are other kinds of freebies too, but those are better left unsaid.
as in all markets based on science and technology, there are also many monopolies and those can pretty much charge whatever they like, since their products HAVE to be used for that certain experiment. also, many companies have exploited patents to their fullest advantage in order to keep the barriers to entry as high as possible.
as we all know, biopolis itself is a classic case of external economies of concentration. the biopolis shared facility is a textbook example of how all the labs in biopolis get to have combined glassware washing, media preparation, product ordering sites which cut costs and makes everything more accessible for everyone.
so yeah, its pretty interesting to see how the market works, even in the field of science. this internship has been more enlightening then i hoped (:
Escaped
{3:17 pm}
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