Analysis of Business Problem: The BioPasture Case

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Background

One of the key fundamentals to analyzing a business problem is identifying the business objective. The objective which stems from the problem statement begins the logical process of finding the solution. An erroneous objective leads to a faulty conclusion and subsequently a wrong, misleading business decision. As one of my classmates would say, you can simply identify the objective by answering a question; what would success look like? Closely linked to the objective of a case are the criteria. They become the factor by which the business objective is evaluated.

In this case, BioPasture an accidental pharmaceutical firm, which was founded by two friends and their lecturer while undergoing a Ph.D. program in Biology Engineering, discovered a cheaper technology for manufacturing certain drugs based on rapidly growing micro-organisms.  Jeff, one of the principal partners, was responsible for the general management of the firm, while Arnold and Amy were more into science and production. After a couple of failed attempts, the first successful drug was Liboloprin; a medication for the treatment of high blood pressure. The drug took the industry by surprise because of its efficacy and negligible side effects. The dug gained popularity and became a huge success in a short while. Biopasture built an incredible reputation on the safety of Liboloprin.

Case Brief

Most recently, the team at BioPasture made a second discovery, a drug for the treatment of diabetes called Diastop. The target market for this new drug is aged 45 to 70 years.  This drug came at a critical moment when the patent for their core technology (the rapidly growing micro-organism) was expiring in a few years. This patent has shielded BioPasture from the competition.

Unfortunately, this time there was a snag. A rival of one of BioPasture’s co-founders; Prof Amy Waitz delivered a paper alleging that a compound similar to that found in Diastop was fatal to humans. His experiment, however, was conducted on non-human species that were also non-diabetic. The principal partner at BioPasture who naturally is risk aversed developed cold feet about the launch of the product: Diastop despite an FDA’s approval. At his request further evaluation was carried out by BioPasture’s Lab supervisor. The result showed some possible complications for the target market’s age bracket, but the ratio wasn’t alarming.  What decision should BioPasture make considering the possibility that Prof. Amy’s rival could be right? This could lead to the recall of Diastop by FDA (this has happened to a similar drug in the past) and has the potential of crippling BioPasture completely.

So, what would you consider the objective of BioPasture at this material time? To launch or not to launch Diastop? If you are like me, you would say yes. Unfortunately, that isn’t correct. The objective is to launch a safe product with a minimal side effects for users. Making the wrong judgment about the objective led me to evaluate the wrong criteria and consequently the wrong conclusion or decision. For example, one of my criteria now became the drug’s safety and another was the brand image.