ANALYSES OF BUSINESS PROBLEM-PRACTICAL APPLICATION OF MODELS TO REAL LIFE BUSINESS CHALLENGE- PART TWO

THE FUTURE OF BIOPASTEUR AS A CASE STUDY

 Sequel to my post last week on leaning experience gained from the ongoing Lagos Business School, EMBA 28 program on one of my courses; ANALYSIS OF BUSINESS PROBLEM. I will be continuing with the application of models to analyse a real-life business issue, on the business case named THE FUTURE OF BIOPASTEUR AS A CASE STUDY

OBJECTIVE

The objective of this report is as follow:

1. Reviewing the fact of the case within the context of this scenario
2. Analyse whether to continue, stop or take DIASTOP back to the lab
3. Highlight interests, value, fear, concerns and aspiration
4. Then make recommendation for decision making.

GENERATE THE ALTERNATIVES

In generating the alternatives to the main question of whether Thompson & Co should introduce DIASTOP.

1. Stop the production of DIASTOP immediately
2. As advised by Anderson head of BioPasteur research, take DIASTOP back to the lab for further development from 2011 to 2015.

CONSEQUENCES

This is done by analysing each alternative:

Option A

Thompson & Co should introduce DIASTOP immediately:

Sequel to the approval given by the FDA, the company can go ahead to introduce the unimproved version of the DIASTOP drug, as there is currently expectation that the medical community knew about DIASTOP and were looking forward to its introduction especially in New England. The expected projection is to generate a profit of $70million per year (14,000 boxes @ $5,000.00 profit). Hence, profit from 2011 to 2019 if accrued evenly would have amounted to total profit of $603million, in addition to the expected profit of $50million which is expected to grow at 10% annually on the existing LOBLOPRIN product. This would have significantly improve the viability of BioPasteur if DIASTOP perform well.

BioPasteur management has already outsources production to a 3^rd party company GFT, with an advanced sum of $5m to cover initial operating cost and signed production agreement for the first 2 years guaranteeing GFT $10m independent of the quantity of DIASTOP sold during the first 6months of production. Hence, if this contract is stopped abruptly could lead to a litigation.

Professor River thesis

However, the objection raised by Professor River, on the possibility that the drugs was dangerous for patients between the ages 50 and 70 who are the critical target group for DIASTOP could portend a great danger if it holds, although this has been widely criticized by some participants, that the thesis and protocol that the compound he used was not identical to DIASTOP and he used it with healthy (non-diabetic) non-human subjects.

Thompson Concerns

Other consideration was the concern raised by Thompson that DIASTOP was a dangerous proposition as per the thesis of River. Also, Anderson analysis suggested that there might be an effect of age on complications-as shown by the graph, the target age bracket of 45 to 70 has a high tendency of the complication which shows higher potential for complication between 3 to 6 complication range, then moral issues.

The fear that some of the patients could suffer long term negative consequences. The fact that, if DIASTOP caused even a few severe episodes of heart problems, the drugs might be recalled. A recall could jeopardize LOBLOPRIN sales.

I will continue with the application of the model in my next post. Watch out!