Company assets were in dozens of billions of dollars in 2012 whereas its income was measured in billions of dollars. Despite an overall strong position of the organization, the executives of the company were somewhat concerned with a slow growth in revenues (4-8% per year) and net income (1-3% per year). Consequently they felt that the company was been falling behind the competition and, in the long-term, in danger of losing the leading position in the pharmaceutical industry.
The case study below is focusing on the organizational R&D projects – both pharmaceutical and diagnostics – while ignoring the maintenance and stay in business ventures.
Just like in the previous example the company executives have developed a very clear unequivocal strategy void of any ambiguous goals. The strategy consisted of four pillars:
- No OTC products – the company decided to avoid the generic drug market altogether and focus on the prescription drugs only due to IP protection and higher profit margins.
- Five research areas – the company decided to focus its R&D efforts on five key pharma field including cardiology, cancer, infectious diseases, diabetes and neuroscience.
- Focus on personal healthcare - attending to the physical needs of people who are disabled or otherwise unable to take care of themselves
- Personalized drugs - drugs that can customized exactly to the needs of a particular patient, including the exact dosage and combination with other medications.
The portfolio committee decided to employ the following variable in the construction of their scoring model:
- Market Attractiveness (How many patients are out there?)
- Strategic Fit
- Risk (both technical and market)
- Core competencies
- Financial (Revenue)
Points Awarded (Maximum possible 135)