Pharmix is a new Biopharma solutions firm that promises to create medicines with lifespan and efficacy for all and make them available in difficult-to-reach regions. Pharmix's vision is to be a global brand for pharmaceutical and biotechnological solutions delivery through evidence-based research and innovation. Among its objectives are the creation of solutions that fill gaps in the pharmaceutical sector and the development of a framework for surpassing competitors through genuine replicable breakthroughs based on research findings. The proposed items must also be environmentally friendly. The core values for Pharmix are customer-centeredness, excellence, a culture of community service and a policy of continual improvement. Among its fiercest competitors globally are Novartis, Sinopharm and Johnson & Johnson. Strengths of Pharmix in the industry include the diversity of products it intends to offer as well as its target of minority markets. The opportunity to blend the business, information technology and biomedical skills boasted by the three partners is great for Pharmix as well. Pharmix does not have many weaknesses besides the fact that only one of its founding members has qualities akin to the pharmaceutical field. Pharmix intends to use the 4P marketing mix in conjunction with a customer centred and pragmatic approach to sales. The projected budget came to slightly over 3.6 billion US dollars, which is close to the amount of savings held by the three partners at present – and which will be the primary source of funding for the start-up. Other sources of financing will be donor funds, investments from either private or governmental sources as well as selling shares.
Table Contents
EXECUTIVE SUMMARY 2
1. INTRODUCTION 5
1.1 Mission Statement 5
1.2 Vision Statement 5
1.3 Goals Statements 5
1.4 Core Values 5
1.4.1 Client-Centeredness 5
1.4.2 Excellence 5
1.4.3 Culture of Community Service 6
1.4.4 Continuous Improvement 6
1.5 Company Description 6
2. INDUSTRY ANALYSIS 6
2.1 Internal SWOT analysis 6
2.1.1 Strengths 6
2.1.2 Weaknesses 7
2.1.3 Opportunities 7
2.1.4 Threats 7
2.2 External SWOT Analysis 7
2.2.1 Strengths 7
2.2.2 Weaknesses 8
2.2.3 Opportunities 8
2.2.4 Threats 8
2.3 Competitor Analysis 8
2.3.1 Novartis 8
2.3.2 Sinopharm 8
2.3.3 Johnson & Johnson 9
3. STRATEGIES 9
3.1 Company Products 9
3.1.1 Current Products 10
3.1.2 Proposed Products 10
3.2 Operational Plan 10
3.2.1 Product fabrication Quality Assurance 10
3.2.2 Marketing Plan 12
3.2.3 Sales Strategy 12
4. Financial Plan and Forecasting 13
4.1 Financial Forecasting 13
4.1.1 Anticipated revenue and expenses 13
4.1.2 Cash flows 14
4.1.3 Profit statements 14
4.1.4 Projected Budget 15
4.2 Sources of Funding 16
4.2.1 Self-generated starting capital 16
4.2.2 Donor Sources or Investors 17
4.2.3 Share Sales 17
5.0 Summary and Closing Statements 17
1. INTRODUCTION
Pharmix is a biopharmaceutical production company dealing with medical equipment and supplies as well as pharmacological products such as drugs, plasters and even wheelchairs.
1.1 Mission Statement
Pharmix seeks to generate and promote original, natural Biopharma solutions. We strive to grow our enterprise with the same integrity that we use to create our products, with longevity and efficacy for all.
1.2 Vision Statement
To be global brand for pharmaceutical and biotechnological solutions provision through the use of evidence-based research and innovations (McKenzie, 2015).
1.3 Goals Statements
To identify gaps in the pharmaceutical industry and come up with viable solutions
To identify top industry competitors and come up with a framework for outperforming them
To create authentic reproducible innovations based on the research outcomes.
To develop metrics for ensuring sustainability of products
1.4 Core Values
1.4.1 Client-Centeredness Pharmix takes great measures to ensure a customer-focused approach and guarantee value for customers such that their satisfaction in ensured. Pharmix always go the extra mile to provide quick and efficient after sales service. Our non-perishable goods and equipment come with warranties and the return, replacing option within the first 6 months of use as well.
1.4.2 Excellence That is our standard. In every work processes, good quality is considered substandard.
1.4.3 Culture of Community Service We believe in Corporate Social Responsibility to neighbouring organizations as we endeavour to find the real biomedical concerns and issues on the ground.
1.4.4 Continuous Improvement This value is an implied requirement, given that our solutions are technology and technology are prone to change. It is therefore only appropriate option that we embrace the change and improve continually.
1.5 Company Description
At this point in time, the management consists of the three partners, all of whom are founding members. The blend of experience, skill and work ethics in the management will be sure to propel the company to the desired heights. The Executive Director is fully involved in the day-to-day operations of the company and also acts as the image and the liaison for the Company. The Executive Director has an MA in Business Management with over 5 years’ experience in three multinational biotech companies, and will be supported by the Innovations Manager is a Data Science guru, whose primary role will be to come up with troubleshooting techniques and research approaches derived from the evidence-based research experience and training. The last partner will be in charge of resource management, procurement, supplies and will also champion the development of the biopharmaceutical technologies owing to the work background and Masters’ in Pharmaceutical technologies.
2. INDUSTRY ANALYSIS
2.1 Internal SWOT analysis
2.1.1 Strengths Pharmix boasts a delicate blend of professionals from the core fields that it will be venturing into – IT, Business and Biopharmaceutical. Another positive factor for Pharmix is the fact that there are some sufficient skills based on the cumulative excess of 15 years’ experience among the three founders. The Executive Manager’s background ensures the ability to conduct interviews that soon will be inevitable.
2.1.2 Weaknesses The only weakness of the company is that it is starting with a limited workforce, thereby being forced to consider prompt recruitment to help solve overstretched human resources.
2.1.3 Opportunities The potential combination of IT and pharmaceutical skills seems to be an important facet to the company moving forward. With the teamwork, there is the possibility of gene mapping for more specific creations. Pharmix also has the opportunity to venture into a specialized market that not many people would even think of in the first place.
2.1.4 Threats The greatest internal threat is the potential challenges that may lie in the personal inadequacies of the three founders in the initial stages of building the organization. Team forming challenges such as learning to understand one another are a huge threat to the progress of the company.
2.2 External SWOT Analysis
2.2.1 Strengths Bareli et al. (2017), suggest that the important strengths of pharmaceutical companies are investment in creativity and innovativeness. As such, the company would support the current generation of people all over the world, who are adventurous and would gladly want to explore the new option, thus assuring the market for Pharmed. Also, new products such as the ones that Pharmix will be producing will be valued by the customers compared to the generic options that are not trademark protected.
2.2.2 Weaknesses Pharmix is a new venture compared to other companies and will require new introductions in every department to address the inherent weaknesses.
2.2.3 Opportunities Pharmix enters a market after assessing the flaws in the current drugs and medical equipment. Another opportunity is that biomedical services, goods and equipment will always be needed since health will always be an issue leading to an almost assured demand.
2.2.4 Threats Pharmix may not be received by conservative customers who may prefer better-renowned products or those that have been in the market for some lengthy period of time.
2.3 Competitor Analysis
2.3.1 Novartis. Novartis is one of the top companies in Europe when it comes to Biopharma and related industries. It has a total market share of approximately 131 billion $ and the number of employees is more than 400. An important strength of Novartis is its Swiss origin and the demand for its products in major markets like the USA. Having a Head office in Switzerland implies that the many offices for the United Nations would then be the first market. However, the weakness of this company is that it is too localized in its products.
2.3.2 Sinopharm. In Asia, and arguably all across the globe, Sinopharm is one of the most recognized pharmaceutical companies. The company’s growth over the years has been remarkable to the point that it was even confident enough to want to buy out some drugs off Novartis, which is an equally grand company. Its strengths are that it is backed by the huge population of China. China’s population is approximately 1.4 billion, and the economy is above average. That kind of support has threatened even the existence of established American companies like Johnson & and Johnson, which had earlier overwhelmed that market with its products before Sinopharm grew strong. The threat to Sinopharm is that it is too reliant on the Chinese market. Thus, a sudden inflation on the Chinese economy may easily short-change them.
2.3.3 Johnson & Johnson. Arguably America’s largest biological solutions company, Johnson & Johnson is renown all around the world for its products - from medicated soaps to drugs. Johnson & Johnson has three great strengths. First, it intruded the less accessible markets in Africa and South America. Because of its American heritage, it also gets the backing of many Americans. Also, its diversity is an important advantage when companies are considered holistically. Finally, Johnson & Johnson gets the benefit of backing from the corporate government as well as other investors who help to make it very well established. Among its weaknesses are being less customer focused as their approaches are not adequately relational. Pharmix will use the same method as Johnson & Johnson’s in terms of target markets and product diversity. However, the approach will be more customer focused.
3. STRATEGIES
3.1 Company Products
Pharmix identified a gap in a number of health products, which it intends to term as consumer products such as medicated soaps, powders and other items that facilitate the delivery of care in healthcare settings. The second class of products that will be traded on are medical devices. These will include remote controlled wheelchairs, a new mobile technology for measuring not only the blood pressure, but also capable of telling the probability of someone acquiring lifestyle diseases based on what activities they are engaged in. Finally, the most important of all the three classes of products are the pharmaceutical solutions, which include bioenzymes, drugs and poisons which are approved by the local governments in the areas we will be operating in.
3.1.1 Current Products. Currently, there are no products that have been developed. However, there are prototypes for various classifications of all the aforementioned pharmaceutical and consumer products that have been built by the three partners and internally tested for safety. External testing will be important in assuring prospective customers as well as for providing neutrality of the tests.
3.1.2 Proposed Products. All the medical devices are intended for future fabrication since the staff numbers may not suffice at the moment to build complex structures such as remote controlled wheelchairs.
3.2 Operational Plan
3.2.1 Product Fabrication Quality Assurance. Pharmix will use the same principles as used in lean manufacturing, especially the formulas for fabricating the medical products and machines. One of the most trusted methodologies - Design for Manufacturing and Assembly (DFMA) - will be used. There are a number of principles that will guide product assembly and manufacturing in the DFMA framework. For starters, there is the principle of minimal components (Bareli et al., 2017). When the components making up a product are reduced, the product reliability increases and due to the few connections. Consequently, maintenance is easy in case of any breakdowns, and the purchase of replaceable parts is also cost effective. Secondly, the use of standard commercially available components then allows for ease of design and reduced design time. It is then also possible to allow discounts as per quantity due to the similarity. The third guideline to DFMA is the use of common parts across a product's line, which then allows for quantity discounts as well as the application of group technology. Fourth, the product design needs to be fool proof so that the disassembling process does not become ambiguous. In order to ensure this, the assembly of the parts needs to be only one way. The fifth principle suggested by Porter is the avoidance of flexible materials which would only make the product harder to handle and consequently contradict the intentions of DFMA. Another principle is the shaping of products and parts to facilitate packaging. When the products are designed in such a way that standard packaging cartons are used, the automated packaging equipment will be able to perform its work well, and so will the shipment team. Finally, there is the principle of using a modular design for assembling. According to Ferrell & Fraedrich (2015), approach to assembly involves grouping subassemblies in compartments of five to fifteen parts, which would mean that the final assembly time is reduced dramatically and the inventory is also less complicated.
The other approach will be to use Kaizen Gemba’s idea of continuous improvement to come up with measures of making our products unique and efficacious to all the clients. Since continuous improvement is already part of the core values for this start up, which may prove the easiest way to ensure that quality is maintained by assessing adherence to company policies and values.
The Ishikawa fishbone diagram will also help in assuring quality as the process continues. In the Ishikawa model, there are 6Ms which help determine the source of mal-performance in a system. Pharmix will study all of them from time to time to audit the production quality. The 6Ms are materials, manpower, machines, milieu, methods and management. If the quality of a product is not up to the standard required, most likely, it is one of the six characteristics of an organization that are to blame. Materials include any substance used in coming up with a product, whereas machines are all the associated equipment to the production. Milieu refers to the environment, whereas methods refer to the procedures followed so as to obtain the product of a certain quality (McKenzie, 2015). Manpower and management refer to the general human resource in the organization, both the labourers and the management.
3.2.2 Marketing Plan. Our company will use the 4P Marketing Mix as a strategy for achieving the set goals as well as to stay relevant to the target market. The first component of the marketing mix that will be used will be the product. The product needs to be of high quality so that when people purchase it, they are able to recommend it to others as part of the marketing of the company. The other component is the place. There are different markets targeted by our product, especially the primary targets of Africa and South America, where the large Biopharma companies are hard to come across. The two continents, therefore, provide the place where the marketing is necessary. The third P is Pricing, which will be important for Pharmix to provide products that, while being of high quality, ought to be sold at fair price as well (Christensen & Raynor, 2013).The price would then be a great marketing tool for Pharmix. The final component of the marketing mix is Promotion. Promotion is all about making the product seem appealing to the prospective customers and involving creative ways that make people aware of its existence. The aim of promotion is to ensure that the product is well known all around the globe.
3.2.3 Sales Strategy. Shortening the sales cycles could mean exponential growth for Pharmix. There are a number of approaches to sales that Pharmix will use to maximize their sales and make them in the shortest time possible. Firstly, in every sales activity, Pharmix intends to have a sales representative for the company who for the period of sales is in charge of all operations regarding that sales activity (Christensen & Raynor, 2013).The Sales Rep will also be the final decision maker despite the decentralization in the management structure of the company. Having a point person for reference in sales matters may prove to make the difference between gaining 1% market share each year and losing by the same. As such, identifying a central decision maker should be an important part of in Pharmix’s approaches to sales.
Secondly, Pharmix will trade in pragmatism – that is to say, we are founded on the belief that there is the need for every party in a sales activity to be real. When the products are described based on the context surrounding the reason for its creation, the buyers would also judge the products as aesthetically different (Ferrell & Fraedrich, 2015).
4. Financial Plan and Forecasting
4.1 Financial Forecasting
This section presents the various financial projections guided by the goals and derived from what is already present in the Savings for initiating the Company.
Figure 1: Projected Expense, Revenue, and Profits
4.1.1 Anticipated revenue and expenses. The anticipated revenues will be a return on investment of about thrice the invested amount for the first three years. Since the total amount available for spending based on partner savings is approximately USD 3.6 billion, the revenue from the first three years is expected to make up approximately USD 10 billion. Beyond that, Pharmix should then have taken charge of the market and may well double the revenues by the fifth year. The amount of cash expected to be spent will be 3.6 in the first year. The spending then should increase exponentially due to a constant purchase of more equipment, hiring more workers and tax pay in a world, where inflation rates are also sure to go up. The main expenditure in the first year is projected to be mainly of labour, material and machinery or equipment cost. The total number of employees required for the first financial year is approximately 60. The purchase of equipment is expected to claim the lion’s share of investment because of the role of machinery in production processes (Bareli et al., 2017). There will also be cash allocations for marketing and sales as well as in recruitment of more staff if needed. Further spending will be made on branding as well as creating a conductive work environment for maximizing the potential. Figure 1 presents the simulation for anticipated revenues and expenses for a clearer view of the implication of the projections.
4.1.2 Cash Flows. Sources of positive cash flows for Pharmix will include the sales of the drugs and biomedical equipment. The cash influx is expected to keep increasing steadily then gradually over the first five years since the products will not only be unique, but differentiated as well, thereby attracting many clients (McKenzie, 2015). For the first three years, there will definitely be greater cash outflow than in the years that will follow. Part of the reason for the high initial cash outflow is obtaining of patents, authority approvals for regional operations.
4.1.3 Profit Statements. At present, while there are no profit statements, the projected amount of profit based on the expected revenue and expense estimates will be USD 14 billion after 5 years in the market. The profits are expected to be high, given that the rates of inflation are most likely going to increase. Figure 1 shows a simulation of expected profits for the company. The profits for the first three years are expected to increase steadily based on the increase in expense as Pharmix tries to establish itself in the market. The 7 billion profit by the end of the first year seems realistic, given that the products that will be produced will be of high quality and also of greater worth than that previously set.
4.1.4 Projected Budget. In the budget, raw materials alone should cost approximately 2 billion dollars, whereas administrative costs had a budgetary allocation of only an eighth of the amount projected to be spent on materials. The rest of the costs went on sales and marketing as well as on labour. A breakdown of the labour costs reveals that the Management will be those involved in the production of the pharmaceutical options and medical devices. Technical jobs such as cleaning and other related roles are the lowest paid in the company.
Figure 2: Projected Budget
4.2 Sources of Funding
4.2.1 Self-generated Starting Capital. The first and main source of funding will be the savings accumulated over the period that the founders of Pharmiz have had. Those savings will enable the company to commence its processes and establish itself initially. Comparing the 3.6 billion dollar savings with the budget of over 4billion dollars, at some point Pharmix will most assuredly need external support.
4.2.2 Donor Sources or Investors. One of the reasons why Johnson & Johnson is successful to this day is because of the power it taps from investors who are able to support it. Pharmix intends to use the same strategies that have made Johnson & Johnson successful in establishing itself as a global brand. The targeted investors are involved from the government sources, who may just invest by waiving some of the initial fees without lowering the standards of approval for practice of any BioPharmas. In every country that Pharmix will work, the support of the local government will be very helpful in the progress of the organization. Other donor sources may come in the form of partnerships with other well-known brands from diverse sectors through Sponsorship terms (Christensen & Raynor, 2013).
4.2.3 Share Sales. After the company is grown and fully developed, probably after more than 5 years in operation, there will be opportunities to sell some shares to willing investors or persons. As such, that will likely be a good opportunity to generate finances helpful for Pharmix regardless of the size or number of buyers.
5.0 Summary and Closing Statements
Pharmix is a pharmaceutical and biomedical solutions company that centres its services on three core traits – Integrity, longevity and Efficacy. Pharmix aims to become a global leader in pharmaceutical and biotechnological solutions provision through the use of evidence-based research and innovations. It intends to realize this vision by identifying gaps in the pharmaceutical industry so as to come up with viable solutions, identifying top industry competitors and coming up with a framework for outperforming them, creating authentic reproducible innovations based on the research outcomes and developing metrics for ensuring sustainability of products. Besides being customer centred, the other values that will be used to keep Pharmix’s employees in check are excellence, a culture of community service, and continuous improvement. The management of Pharmix consists of the three partners, all of whom are founding members.
The combination of experience, skill and work ethics in the management will be sure to propel the company to the desired heights (McKenzie, 2015).The Executive Director is fully involved in the day-to-day operations of the company and also acts as the liaison for and image of the Company. The Executive Director has an MA in Business Management with over 5 years' experience in three multinational biotech companies; he will be supported by the Innovations Manager is a Data Science guru, whose primary role will be to come up with troubleshooting techniques and research approaches building from the evidence-based research experience and training. The last partner will be in charge of resource management, procurement and supplies and will also be responsible for the development of biopharmaceutical technologies owing to the work background and Masters' in Pharmaceutical technologies.
One of the greatest strength of Pharmix is that it boasts a delicate blend of professionals from the core fields that it will be venturing into – IT, Business and Biopharmaceutical. Another advantage of Pharmix is the fact that there are sufficient skills based on the cumulative excess of 15 years’ experience among the three founders. The Executive Manager’s background allows for the ability to conduct interviews that soon will be inevitable. The potential combination of IT and pharmaceutical skills seems like an important facet to the company for moving forward. With the teamwork, there is the possibility of gene mapping for more specific creations. Pharmix also has the opportunity to venture into a specialized market that not many people would even think of in the first place. The biggest threat during the movement towards the progress and success of Pharmix will be the big time competitors. Three companies, Novartis from Europe, Sinopahrm from Asia and Johnson & Johnson from America formed the bulk of the competitor analysis.
Our company will use the 4P Marketing Mix as a strategy for achieving the set goals as well as to stay relevant to the target market. Shortening the sales cycles could mean exponential growth for Pharmix. There are a number of approaches to sales that Pharmix will use to maximize their sales and make them in the shortest time possible. Firstly, in every sales activity, Pharmix intends to have a sales representative (Sales Rep.) for the company who for the period of sales is in charge of all operations regarding the sales activity. The Sales Rep will also be the final decision maker despite the decentralization in the management structure of the company (McKenzie, 2015). Having a point person for reference in sales matters may prove to be the difference between gaining 1% market share each year and losing by the same. As such, identifying a central decision maker should be an important part of in Pharmix’s approaches to sales. Another sales approach will be that Pharmix will trade pragmatically. We are founded on the belief that there is a need for every party in a sales activity to be real. When the products are described based on the context surrounding the reason for its creation, the buyers would also judge the products as aesthetically different.
Sources of positive cash flows for Pharmix will include the sales of the drugs and biomedical equipment. It is anticipated that the first year will yield revenue of approximately 10 billion dollars. The cash influx is expected to keep increasing steadily then gradually over the first five years since the products will not only be unique, but differentiated as well, thereby attracting many clients. For the first three years, there will definitely be greater cash outflow than in the years that will follow. Part of the reason for the high initial cash outflow is obtaining of patents and authority approvals for regional operations. As a result of the expenses and revenue, Pharmix expects to gain profits of 7 million on average for the first three years and thereafter, doubling the profits by the fifth year of existence. The sources of funding identified included self-financing from the savings of the members of the partnership. Investors in the form of corporate governments as well as private ones will also be vital in ensuring the financing of Pharmix. The other source of funding will be selling off shares after certain period of time.
References
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Christensen, C., & Raynor, M. (2013). The innovator's solution: Creating and sustaining successful growth. Harvard Business Review Press.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
McKenzie, D. J. (2015). Identifying and spurring high-growth entrepreneurship: experimental evidence from a business plan competition. World Bank . Retrieved from http://documents.worldbank.org/curated/en/210491468178154286/Identifying-and-spurring-high-growth-entrepreneurship-experimental-evidence-from-a-business-plan-competition.
