Creating a new biomedical venture using this Biomedical Innovation & Venture Creation.
The Mission statement of the company Soin des Yeux is to provide the patients suffering from eye problem the most innovative and best means of curing. It plans to provide the customers with the least invasive method of surgical correction equipments so that the fear for correctional surgery especially among patients suffering from eye problems is considerably reduced. Its goal is to continuously improve on the medical equipment quality to ensure that the needs of the patients are being fulfilled. The company also considers that innovation should be the path that the company should be taken by it to fulfil the promise of ensuring a better service to the patients. It wants to continuously improvise its products to make sure that there is a continuous improvement done to the products that are made by the organisation so that better facilities are being provided to the patients with eye problems (Powers,2012). The company wants to be remembered for its innovative contribution.
The passion of the organisation is to serve as an organisation that is going to address the large number of patients that are suffering from eye problem. The company is passionate about making a disruptive change in the method in which eye care is provided to the patients in the market. The company plans to make the eye correction procedure much more safe than it is now and it wants to ensure that the process and time that is required for the correction of eye problems become much less complicated than it is today. The company is passionate to invest heavily on innovation to ensure that there is a possibility of developing a tomorrow in which eye problems are their method of treatment doesn’t evokes fear in the mind of the patients. The company views a future in which there is no eye problems of diseases that remains untreated and the organisation Soin Des Yeux want to be a key contributor in building that future.
The core value of the company and the employees who are going to work for the organisation is honesty sincerity and innovation. Honesty and sincerity is given highest priority within the organisation. And the key guide for the operation of the company is going to be innovation. The innovation strategy of the organisation is likely to be guided by the idea and belief of innovation that is to be implemented with utmost honesty and integrity (Ready & Conger 2007). The company believes in developing its performance in an exponential rate and this is only possible if innovation serves as the base for the organisation. The company wants to include ideas from all the sources that are to be available and utilise them for the betterment of the future in an innovative manner. It is committed to the concept of equality and diversity among its employees. The company is welcoming of ideas from different sources.
|
Start up expenses |
$ |
|
Pay roll Expense |
2000 |
|
payment of technical expert |
2000 |
|
Insurance |
500 |
|
Rent (first six month) |
2500 |
|
Equipment expense(related to purchase of inputs as well as input machineries) |
3000 |
|
Other |
500 |
|
Estimated G&A expense(including legal) |
1200 |
|
Total |
11700 |
|
Start up Investment |
|
|
|
$ |
|
R&D investment |
15000 |
|
long term asset purchase |
5000 |
|
cash in hand |
100000 |
|
Total |
120000 |
|
Total initial Asset/Uses of fund |
131700 |
The present organization is a start-up venture where the total uses of fund are being divided between the start-up expense and start-up investment.
Among the different components of the start-up expense are “Pay Roll Expense”, “payment of technical expert”, “Insurance”, “Rent paid for six month”, “Equipment expense”, “General & administrative expenses”
On the other hand in case of start-up investment it can be seen that the main investments in which the business has made are R&D investment, long term asset purchase, and cash in hand. Among the different investments it can be seen that the maximum portion of start-up investment has gone to R& D investment which is 13% of the total investment available for investment.
Thus it can be seen that the total uses of fund or asset needed for launching the business (that includes both the start-up expenses as well as start-up investment) is $131700
The initial product that is planned to be introduced by the company Sois Des Yeux is development of a range of surgical instrument for the ophthalmological surgeries that is eye related surgeries. The products that are planned to be developed by the organisation are tools which can be used in the refractive correction surgeries and also to ensure that there is a better method in which the surgeries can be executed. The initial idea of the development of the products is to ensure that there is a better and innovative method in which the surgeries are conducted. The company wanted the process of determination of the eye problems especially those related to refractive correction and also to ensure that the corrective surgeries are done in the most smooth and non invasive fashion. In this regard the company has developed a range and testing and surgical instruments that are innovative in their functions and can correct the eye problems of the patients.
A single product that is the Non Laser refractive investigation machine that is the NL-RIM is going to be selected for the purpose of launching of the product in a smaller market. California USA is going to be selected as a smaller market where the product is going to be launched. This product has been selected because it is an eye testing product which helps in the proper method of testing. This eye testing is the method which is the initial process that is applicable in case of any kind of eye treatment regardless of it is small treatment or surgery (Ballantyne, Frow, Varey & Payne 2011). Thus it is going to have high demand in any kind of eye treating centre. The market that has been selected is California because it is one of the places that are known for medical treatment. The total area of California is also large.
The end user of the products that are developed by this organisation involves the people who are suffering from eye problems. There is an extensive potential in the market for this type of product because surveys conducted in USA has suggested that almost 54 per cent of the US population is suffering from eye issue of refractive error. In case all types of eye issues are taken into consideration it will be even a more huge number. Thus it can be stated that there is a need in the market for the development of products that are meant for the correction of eye problems. The people suffering from eye problems are likely to be the consumers of the product but the customers of these products are going to be the different clinics and hospitals that are present which has facility for eye testing and eye treatment. There are 900,000 patients each year that underwent eye surgeries in USA.
TAM
TAM is the term that stands for Total Addressable Market. The total addressable market calculation can be done by various methods. The bottoms up approach helps in the calculation of total number of accounts present in the total industry which is divided by the annual contract value of the particular organisation. The total addressable market for the company can be considered to be present across the globe. The revenue opportunity that is present for this particular product is present across the market. The entire global scenario is going to be selected in this case for the calculation of the total revenue opportunity. The market value of Ophthalmological instruments in USA is 8.36 billion US dollar in the year 2017 which is expected to rise to 11.18 billion US Dollar by the year 2022. The products that are selected to be produced by this company are likely to hit this market (Priem, Li & Carr, 2012). It is expected to generate contract from this market because of its innovative capacity.
The organisational personality that is to be applied in case of this organisation is intelligent, honest and diligent. The product that is to be prepared by this company belongs to the medical segment and thus it is important for the organisation to select a personality that is likely to create a sense of trust among the general population. Thus selecting the organisational persona is of great importance. It is also important to ensure that the organisational persona is reflected the innovative aspect of the organisation. The innovative nature of the organisation can be reflected by the quality of intelligence. At the same time the characteristics that are needed to induce trust among the customers has to be present in the organisational persona. This can be done by ensuring that the company also reflects the personality traits like honest and diligent (Don, 2016). The company should also depict qualities like diligence for completing its organisational persona.
The customers of this product are the clinics that are going to use these products for curing their patients. As the company plans to grow from USA the first group of customers of these products are likely to be the clinics and hospitals that are present in USA. The total number of registered hospitals that are present in USA is 5564 by the year 2017 and it is growing a continuous basis as there is a strong medical industry that is present in the country. Apart from that there are several clinics and diagnostic centres that are providing ophthalmological treatments. All these organisations are likely to serve as the primary market for the products of this company. However it is a start up so the start ups and small clinics are likely to be primary targets. Moreover as this an innovation driven organisation thus the existing hospitals are also likely to serve as a market for the products of the company.
Use Case
Purpose: the purpose of the machines is to provide service to the customers that are the medical clinics who are in turn going to perform the investigation and treatment of the patients.
Summary: the company is going to provide the products to the customers that are the clinics. The clinics are going to use this product for testing eye issues of the patients and provide services to them in terms of treatment. Thus the company is likely to be involved in only selling the product to the various clients. Apart from that the company can also provide after sales services which is going to involve making demonstration of the method in which the product is going to be used and in case there is a problem that is faced by the clients the company is also going to provide the after sales services. The customers have been recognised in this use case.
Some of the products that are sold by the organisation are Non Laser Refractive Investigation Machine NL-RIM, Specialised eye scissors, bipolar forceps, improvised diamond knives etc.
NL-RIM- this is the product that is used for testing of the eye problems without using any laser rays. NL-RIM stands for non laser refractive investigation machines. This machine helps in the diagnostic centres for the detection of refractive issues which are faced by the patients.
Specialised eye scissor: the eye scissors use different types of structured blades that are used for the eye operative surgeries. These surgeries are critical hence there is a need for specialised shapes and structures for performing the surgeries. The company has used at least 17 types and verities of structures that can be used as scissors.
Bipolar forceps: the bipolar forceps that are created is highly energy efficient and can reduce the energy cost to a significant level for the clients while using them.
Improvised diamond knives: the diamond knives are used for precision cutting in the ophthalmological surgeries. The key innovation that is likely to be implemented involves the use of ‘A’ carat diamonds with special edges that can be manipulated for even precision cutting.
There are problems that are associated with each of these products. However there are efforts that are being made for ensuring that these problems are being addressed to ensure that the products are of great value to the customers. The key problems that are to be addressed by the organisation is that the products are innovative and new in the market and the market is already habituated with a certain type of products. Thus to introduce these products in the market the specialities of these products has to be properly demonstrated by the company. Most of the products are not new in the market but they are improvised version of the existing products.
The key quantified value proposition which makes the organisation unique involves the fact that each of the products that are made is unique in nature. The majority of the demands in the medical equipment market are of two types one which makes a new type of testing possible and other is ensuring that the method in which it exists can be made more accurate or precise. This company and its products are addressing both the needs (Priem et al. 2012). However the current line of products that has been mentioned is for ensuring that a greater precision can be achieved. The point of parity of the products involve the basic functions with the other existing machines that are used in the market but the point of difference lies in the fact that it is much more precise in nature. The precision can be considered as the quantifiable value proposition for majority of the products except for the NL-RIM which is completely a new technology that can be utilised in this industry.
Moats
The key competitive advantage strategy that can be adopted by this organisation is differentiation strategy. The company is operating with the value of creating something new and unique in the market. Thus the differentiation strategy can be followed by the organisation for long term competitive advantage in the market. In case the differentiation strategy is used by the organisation the company has to invest in the research and development on a continuous basis and also utilise the principles of total quality management or Kaizen for the purpose of innovation. The company have to continuously starve to improve its product quality and at the same time it should at all times be innovative new products to ensure that they remain competitive in the market (Ready & Conger 2007). The company should also ensure that proper investment is done for innovation of new products.
Core
The core competitive advantage of this organisation is the skills and efficiencies of the research team that is present in the company. The ability to innovate at a continuous basis is only possible in case there is a strong team of people who are heading the innovation. This is the core advantage that is not likely to be available for the markets. This core competency has to be enriched by the company and at the same time proper recruitment and training facilities has to be developed by the organisation to ensure that this core competitive advantage is maintained by the organisation. The core competitive advantage of a company which is adopting a differentiation strategy is definitely the innovator who is making it work. Adequate measures are to be taken by the organisation to ensure that this advantage is being maintained by the company.
Competitive positioning
The surgery in eye is critical and compacted considering the delicate visual system in the human body. In many cases because of the difficulty of surgery or in appropriate equipment used in the surgical process, the result of the surgery becomes unsuccessful. Under these circumstances the most important value for deliver by ‘Soin des yeux’ is for the patients and then for the medical practitioner. ‘Soin des yeux’ would provide least risky chance to have a successful surgery that would surely boost the visual activity of the patient. Therefore the patient wellbeing and less stressful decision making for the surgical process is one of the most improving values that would be used for the competitive positioning of the business in the market (Hooley Piercy & Nicoulaud, 2012). . The second approach of competitive positioning would be done on the basis of benefit deliver to the medical practitioner. ‘Soin des yeux’ would provide the opportunity to the medical practitioner or hospitals to deliver a safest and best positive result to their patient. This capability development would be important competitive positioning in the market.
The current business of is a B2B business. The primary customers are the hospitals, eye clinic and GP. The equipments are for surgical and also regular eye checkups. The DMU process helps the new business to find the different decision making influences in the selling process. in this model the ‘champion’ are the people who influences the main purchasers of the product to make this valuable purchase but they may or may not be the end user of the product. The ‘end user’ is the person who uses the product actually and they could also the same person as ‘champion’ (Coleman, Chernatony & Christodoulides, 2011). On the other hand the ‘primary economic buyer’ is the people who actually makes the buying decisions and pays for the product. In case of ‘Soin des yeux’ Product the champions are the doctor or the opticians. The end users are the patients who come for the eye care and surgery. The ‘primary economic buyer’ is the top management or owner or the local authorities of hospitals or clinics or GP respectively. Considering this in the buying process the product awareness and education would be improved among the patients and the medical practitioner to improve sales positions.
The current sales process is B2B selling process. At the initial stage of this buying process the need the buy the product has to be recognised by the customer. The final decision maker in this process would not start this process unless they feel the need for that. Considering this the need can come from the demand from the patients or the competitor’s progress in the market or recommendation from the medical practitioner that influences the final decision maker that is like the top manager of the hospital or the owner of a clinic to take action in this direction (Solomon, Dahl, White, Zaichkowsky & Polegato, 2014). The nest stage in this process is the searching the information for these product. Better eye surgery and check-up equipment manufacturing website or other source of information would be searcher by the final decisions maker through a comparative method. To influence the customer in this stage ‘Soin des yeux’ have to use the marketing communicational mix effectively to provide appropriate information to the buyer. The next stage is the alternative evaluation. For the business buying process the decision are made less emotionally but more on the benefit based logical decisions. Considering this the buyer would evaluate the option of better equipment in the market and compare the costing for the organisation. It has been seen that higher involvement in this process seeks multiple option than lower involved customer. This would be a significant decision for the customer and involvement is expected to be high. the next stage is the final decision making stage. The stage can have disruption if the other’s feedback or cost factor is high for a certain brand. Therefore to better influence the customer in this stage the expert advice, comparative pricing and future customer support would be highlighted to have a favourable decision (Solomon et al., 2014). The next stage is the post purchase behaviour. This sage is important as their recommendation or good word would be important for the future sales processes. Therefore promised support service and long term customer relationship would be effectively maintained to have further value from that customer by offering other products of the business.
This is a short time based decision making process that would provide the best opportunity to the business to be effective in the long run in the market. The current products of ‘Soin des yeux’ are innovative and took time and effort to development. After introduction of these there are change that the competitors would developed their product line also to become competitive in the market (Johnston & Marshall, 2013). Therefore the business would get one year time period during which it would have the less competitive situation in the market. This time musts be utilised effective to become a dominate player in the market so that future competition in the market can be managed.
For the B2B business the triggering point are generally different in comparison to the B2C business models customers. Generally are triggers for such business clients are trust, belongs, time factor, leadership influence, value and the market completion. In the current situation there could be three important trigger and those are completion, value and leadership. Like any other industry the market completion does also exist in the healthcare industry and market completion related superior service deliver is one of the trigger to purchase these high quality innovative products. On the other hand the cost in the healthcare industry is rising and the patient complication needs better way of serving. This need would be the most important trigger for the organisations to purchase these innovation driven products that provides less costly but improved care driven services to the patients. The next trigger would be the leadership of the organisation (Johnston & Marshall, 2013). The top leadership of the business would be important in decision making process as the leadership of the organisation may decide to pursue the best industry standard.
One of the regulatory strategic approaches here would be to focus on the regulatory issues from the very product development stage itself. The regulatory issue management from the very development of the product would help the organisation to keep the final products as per the regulatory requirement. A research activity would be useful for the information generation in the product issue, technology issue, intellectual property right, quality issues and so on. Based on this information the product development to final product selling would be planed to keep complying every regulatory requirement (Boudreaux et al., 2014). On the other hand the inventions and innovation will be patented to keep the business intellectual property safe. Legal councillors would be appointed to keep the activity as per the regulatory guidelines.
The reimbursement is one of the top concerns in the medical establishment that are stakeholders, investors and CEO. The cost of healthcare is increasing and the stakeholder of the medical sector is looking for reimbursement. In this regard the payment, coding and the coverage of this technological product would be highly important (Edlin, Hall, Wallner & McCabe, 2014). Considering this the reimbursement assessment also would take the same strategic approach of regulatory strategy that starts that from the early product development process. The existing product’s payment, coverage and coding would be assessed first and that would be passed on to the R&D department of the business. Based on this scope of opportunity and limitation the products would be developed. Then at the marketing stage of the product a proper economic value that is lowing the cost of healthcare would be calculated and along with that the clinical benefits would be quantified. Proper clinical evidence would also be collected for the value assessment process (Edlin et al., 2014). The collection of the health economic data would be gathered at the time of product going for the regulatory trial to avoid cost for the studies post approval. a proper pathway for the reimbursement would be provided to the final decision maker in the buying process.
The business model and the operational flow of the business is meting described with the above Business Model Canvas. The business model Canvas defines the main two supporting partners who are playing an important part in the business are the Logistic Partners. The main suppliers of the business are diamond, metal and screw developing partner’s .The other important partner is the venture capitalists who are the main stake holders of the business and is making a huge investment in this new start-up that is looking for making some disruptive innovation in ophthalmology equipment industry.
The key operation of the business is to develop some innovative equipment for eye testing and vision correction surgery and the business is all set to do this with the strong support of the suppliers network and strong team of technical experts .The business is assuming that they will quickly able to gather a substantial portion of market share as there is a high demand for sophisticated equipments that can reduce the complication in the eye correction snuggeries (Osterwalder & Pigneur, 2010).
Around 5000 registered hospitals of USA along with eye clinics and eye diagnostic centres are the main potential buyers of these new ophthalmological equipments that are going to be developed as new innovation and the business is engaged in business-to-business sales through direct channels.
In order to maintain the customer relations the business collects the feedback given by the different eye patients who are the main receiver of the service of the equipments being sold to the different hospitals, clinics and diagnostic centres..The feedbacks are being collected from the businesses that have purchased the equipments and have used on the patients.
The collected feedback and suggestions are taken very seriously for improving the products accordingly through R&D in near future.
The business is mainly going to earn revenue by selling the different kinds of innovative eye equipment products and initially the business is going to 4 types of products that has been discussed in detailed in the product-mix section
|
Sl. No. |
Product -Mix |
|||
|
|
|
Pricing($) |
Manufacturing Cost($) |
Profit margin |
|
1 |
Specialised Eye Scissors |
150 |
35 |
329% |
|
2 |
Bipolar Forceps |
150 |
45 |
233% |
|
3 |
Improvised Diamond Knives |
150 |
100 |
50% |
|
4 |
Non Laser refractive investigation machine (NL-RIM ) |
150 |
90 |
67% |
Description:
The business is initially selling four kinds of products and as listed above and a single pricing of $150 has been set for all the four products though the per unit manufacturing cost for the different products are different. Thus it can be seen that the profit, margin that is expected to be earned in case of “Specialised Eye Scissors” is 329% and the profit margin to be earned from the sales of “Bipolar Forceps” is 233%
In case of “Improvised Diamond Knives” it can be seen that the manufacturing cost is quiet high which will give only 50% profit margin.
Finally the sales of Non Laser refractive investigation machine (NL-RIM ) is expected earn 60% profit margin(Nagle & Müller,2017).
The main reason of keeping a single price of $150 for the entire products of the product mix is to maintain an economic pricing that will help the business to easily penetrate the market and to acquire a substantial pet of the market share.
Once the business will manage to earn a substantial market share then the business will start increase the prices of their products for maximizing profitability.
Preferred Sales Channel:
The selection of sales channel would be important for the physical transaction and the final transaction. These sales channels would be important for the facilitating, logistics and transaction process. There are four different channels and those are reverse, dual distribution, intermediately based selling and direct selling channel. The current business of key surgical ad check-up instrument would be sold through the direct selling channel (Ingram, LaForge, Williams & Schwepker Jr, 2015). These are high end equipment and needs time and knowledge to make the client understand about the value of the product ad how those can improve their eye care services for their clients. The sales personnel of ‘Soin des yeux’ would visit the hospitals or the clinics and give products demonstration to convince them about the product. This channel would be highly important to business develop a better sales growth.
Sales Funnel:
The sales funnel for the ‘Soin des yeux’ would be expressed through the following stages.
Awareness- different traditional and non traditional media promotion would be used for the secondary awareness building. But the primary awareness building approach would be the direct sale agent based products demonstration (Ingram et al., 2015).
Interest- in this stage the customer shows some interest in the product and that must be capitalised through some important benefit or offers.
Evaluation- in this stage different competitor is assessed to find most suitable one to purchase product from. Better reimbursement showcasing would help the customer to take effective decision (Ingram et al., 2015).
Decision- in this stage the final decision is made. The scope for negotiation must be fully utilised in this stage to help the client decide for the purchase of equipment.
Purchase- in this stage final payment is done and product are transferred.proper closing of deal would be done in this stage and proper support would be provided for the installation process.
Revaluation- in this stage the total process would be evaluated by the client. Customer support and long term relationship building would be useful in this stage to further initiative the sale funnel to sell some other product of the company (Ingram et al., 2015).
The price of products is as follows
The cost of manufacturing of products is as follows
Therefore the product 1 and 2 are providing higher contribution to the business whereas the product 3 and 4 are providing lower contribution because of higher cost of manufacturing. On the other hand the product 4 and 1 would have higher sales volume compared to the other two products in the operation as per the market research. At the initial stages of the business market share achievement and revenue maximisation would be the main motive (Cron, DeCarlo & Dalrymple, 2010). Considering this the sale channel would be based on the sale volume maximisation driven. Therefore product 4 and 1 would be sold in higher proportion in the short term sales mix.
In the medium term the main goal would be to balance the profitability and the revenue volume. From this stage the profitable products would be pushed more in the sales mix. Considering this product 1 and 2 would be promoted more to generate higher volume of sales and profitability (Cron, DeCarlo & Dalrymple, 2010).
In the long run the market completion would increase. At that time more or less similar pricing would be maintained by the business to keep the customer. During this time also higher market share would be critical to have a good grip on the market. Considering this the revenue maximisation would again become priority for the business (Cron, DeCarlo & Dalrymple, 2010). Considering this product 3 would be dropped from the sale mix and the other three would be pushed for greater revenue generation
|
R&D investment calculation |
|
|
|
$ |
|
R&D investment |
15000 |
|
Annual R& D expense increase at the rate of 10% |
16500 |
|
Normal annual Trading loss @ 2% |
300 |
|
Total annual R& D expense |
16800 |
The start-up R&D cost being allotted by the business is $15000 but the business has taken the policy to increase the expenditure at a rate of 10% annually as the business is all set to develop and improve their manufactured equipments as per the suggestion and feed back of the customers. Finally the normal annual trading loss is expected to be 2% of the basic annual R&D cost which is to be added back to the basic R& D expense(DiMasi, Grabowski & Hansen,2016).
|
Estimated G&A expense(including legal) |
1200 |
|
salary of administrative employees |
720 |
|
office supplies &utilities |
360 |
|
depreciation of office equipments |
120 |
The total general and administrative expenses of $1200 is going to be divided in to “salary of administrative employees”(covering 60% of the total expense), “office supplies & utilities” (covering 30% of the total expense), and finally “depreciation of office equipments”( (covering 10% of the total expense)( Chen, Lu & Sougiannis, 2012).
Cost of customer acquisition (COCA) and lifetime value of an acquired customer (LTV):
In order to assess the Efficiency in customer acquisition it is essential to judge the LTV/COCA ratio which can be defined as the new unit economics that entrepreneurs have to understand to be successful.
The cost of customer acquisition (COCA) depends upon the policy that the business will take time to time for acquiring the customers and this cost will change from one segment of customer to another. For instance it is obvious that the cost of acquiring the big customers say hospitals will be greater than the cost of acquiring the small eye clinics or diagnostic centres.
So higher will be the ratio greater will be the efficiency of the business in transforming the cost being incurred for acquiring the customer in generating earnings from that customer.
However it has to be considered that there is no hard and fast rule that higher cost of customer acquisition will lead to a higher generation of lifetime value from that customer(Pearson, 2016).
As per general thumb rule for any business to succeed the LTV/ COCA Ratio will be at least “3” or more for enhancing the scope of the business of the organization. This indicates that if the business is capable to generate 3 times life time value of the acquisition cost then it is expected that the business will be quickly capable is capable to attain the break even and to fulfil the short term goal of revenue maximization and medium term goal of profit maximization. Thus with a LTV/ COCA Ratio greater than equal to “3” if the business fulfilling the goal of short term and medium term then i n the long run the business will be able to fulfil the goal of establishing itself as a sustainable business.
Key Assumptions:
The manufacturing and design of the products would be based on some important principles. The product innovation and design influences one another. Considering this the designer of the product must have to closely work with the R&D specialist. One of the important assumptions in this designing process is the precision part of the design. The equipments are developed for the eye surgery and check-ups. Therefore the sophistication of the design would be aided by the precision aspect of the design (Fries, 2016). On the other hand the durability aspect of the design is assumed to be important. The mechanism used in the device designing and its longevity would be a critical factor for the lifetime measure of the device. Considering this the servicing or the replacement plan would be provided to the hospitals or the clinics to management the lifetime of the product. The next assumption in this regard is the safety concern. Eye is one of the most sensitive parts of the human body and because of this safety is taken one of the important assumptions for the product building and designing process. The clause nine of ‘IEC 60601-1’ would be followed in the designing process. ‘IEC 60601’ would also be followed for the for the component and sensor activity that are ‘single failure safe’. The mode of failure would be properly analysed and a process of contingency would be developed for the safety issues. The products would be used for the eye surgery and check-up process and during those times some form of debris may come and contaminate. Considering the sensitivity of those processes the environment of the debris, lifetime of the devices, and interaction with other devices related risk would be managed. The validation or the test for usability determination would be important as an improper decision without proper consideration based design would fail the test (Fries, 2016). In this part the general assumptions would be durability of device, human effort of device use, approach of use, noise and other factors to design the product properly.
Assumptions Tests:
The assumptions need to be tested before the product is finally market as any complication and complain coming afterward would seriously hurts the start-up business. The precision assumption has been tasted again and again to gather data. The data analysis shows higher level of precision of the product. Then the precision is tested after multiple numbers of uses. The evidences suggest that there is no loss of precision within the calculated lifetime of the product. The calculated lifetime of the product and the implication of the mechanism of the device are then tested during the built and design process. The tests show that the mechanism is highly reliable and it does not significantly impact the lifetime of the product. The chance of failure of the produyct is found insignificant still a proper contingency plan has been developed (Fries, 2016). On the other the lifetime consideration and analysis has showed that the devices would need serving after every two years and that would be done by ‘Soin des yeux’. A service agreement would be developed for this. From the safety related test a design for the protective guard has been developed. For the assumption on debris the tests has revealed that the risk can be expected from the other devices of eye treatment rather than the environment. Considering this a guideline has been developed during the use. The usability testing shows higher level of success for every considered factor.
The assumptions showed that the maintenance of the device would be required for every two years. The total lifetime of the products is five and a half year. Therefore two maintenance service would be required for the devices from the sold date. The maintenance service would be provided by ‘Soin des yeux’ through a service contract agreement. the plan for this would be provided in details. The timing would be monitored by ‘Soin des yeux’ and contacted to the client accordingly (Jamshidi, Rahimi, Ait-kadi & Bartolome, 2014). The service would be charged for these two times but any minor maintenance or complain comes during these times, the service would be provided by the ‘Soin des yeux’ at free of cost.
The quality of building or manufacturing process for the devices needs to be managed through a criteria matrices development. This matrix would be tracked regularly to keep the design and built process as per the expected quality ad standard. The OEE or the ‘overall equipment effectiveness’ would be maintained through the system applied in the plan. Through this approach the corrective action based continuous improvement would be followed (Babler, 2010). Another approach of quality improvement is the ‘complaint’ tracking. Here total complaints, due ones and managed ones would be tacked for the improvement effectiveness. An internal and external audit would be used here for the noncompliance assessment and its corrective action findings. Automated MDR or ‘medical device report’ process would be followed for reporting and also tracking the quality aspect of the products. Here the focus would be on the percentage calculation for MDR. The non-compliances related matrices would also be maintained for every 2 months (Babler, 2010). Here the software for the quality management would be used for the non-compliances matrices tracking in automated way.
Beachhead strategy is the initial strong hold developed by the ‘Soin des yeux’ in the market. in case of current business strategy the product category would be the best option for the development of this strategy. the current product is designed innovatively to provide better solution in the eye treatments processes. The eye check-up and surgery is one of the important segments of the bio medical industry. In the current business model the product called NL-RIM would be used for this strategy. In the eye treatment industry the check-up process is a regular process and has sufficient demand in that product segment (Mohr, Sengupta & Slater, 2010). On the other hand other product are specialised for the surgery process for eye. Considering this the Beachhead strategy would be based on the NL-RIM market.
Next Market:
From this eye check-up instrument market the sales personnel would penetrate into the eye surgical instrument market and into other surgical instrument market in future. The strategy is sound and can be further expanded into other regional market other than USA market.
The product plans that extend from the Beachhead Market have two distinct line of approach for two different segmentation processes. Here one is the regional segmentation and another one is the behavioural segmentation. The regional segment that would be persuaded later would be the total North American and European market as those are the first and second largest market in the world for the eye examination and also surgical equipment market (Mohr, Sengupta & Slater, 2010). This regional major market persuasion would be the next logical step in this direction. But this approach would be persuaded later; first the behavioural segmentation targeting approach would be applied in the product planning. Here the Beachhead Market focused on the eye check-up equipment market which is one behavioural segment. Another most important behavioural segment is the surgical equipment market. Considering the product planning process would start marketing the surgical equipment market from the second quarter of the business operation to build on the success of Beachhead Market (Mohr, Sengupta & Slater, 2010). Within next two years time period the surgical instrument market in USA would be developed and them the regional market would be persuade. The assessment would be done after every year of new market persuasion.
The eye check-up equipment market is current at $5.5 bn and with its 6.2% CAGR it is expected to reach $8.8bn globally (grandviewresearch, 2018). Therefore the Beachhead Market is highly attractive at not only current strategy but also in the future regional expansion strategy also.
The most important stakeholder for the business is the patients, medical practitioner, hospital or privet clinic owner, government and regulatory agencies, supplier, sales staffs.
The patients- the patients are the important stakeholder with higher power and higher interest about the equipment as their direct health and well being is related with this. Therefore this group needs to be consulted, engaged regularly to manage them.
Medical practitioner- the medical practitioner would be another that has higher power and also higher level of interest as there would be highly concerned about better outcome of their surgical or evaluative work for the patients. Therefore these key players would also have to be treated in similar manner like the patients (Jensen, 2010).
hospital or privet clinic owner- this group of stakeholder is having higher power as they are the final decision making body but interest wise they are more concerned about the economic and benefit wise outcome. Considering this these stakeholder needs would be meet through reimbursement information deliver, better marketing communication deliver to improve their interest, consult and also engage them in the process more.
Government and regulatory agencies- this stakeholder would have higher power but moderate interest. Their main interest is in terms of legal and citizen welfare. Higher power is because of the regulatory clearance giving process considering this similar strategy would be followed like the hospital or privet clinic owner.
Supplier- the supplier for these products development would have lower interest and also lower to moderate level of influences (Jensen, 2010). These stakeholders would be managed through regular communication only through regular mode of communication.
Sales staffs- staffs would have higher interest as their livelihood depends on it and but lower power. These stakeholders would be informed regularly and would be sued as the goodwill ambassador of the business.
Different internal staffs would be as follows with their roles and responsibility
R&D staffs- their role is to develop the innovative products. The main responsibility is to provide the company a market best product to develop the highest competitive advantage.
Manufacturing staffs- their role and responsibility would be to deliver the best quality product that would deliver the best customer satisfaction.
Sale staffs- sales staffs would be responsible for generating revenue of the business by following the role of just being the business representative to the client.
Top leadership of business- top leadership would be responsible to take the important business decision that would be related to the very survival of the business.
Office staffs- regular documentation needs and other official work would be done by them.
R&D staffs- the assigned role and responsibility for the R&D staffs would be to innovate and develop low cost solution for the opticians.
Manufacturing staffs- improve efficiency of manufacturing process to manufacture products at lower cost.
Sale staffs- increase reach and grow sales to become market leader.
Top leadership of business- generate finance to fund the business growth process.
Office staffs- maintain the documentation and comply with every regulatory requirement for the business.
The patients, Medical practitioner, hospital or privet clinic owner, Government and regulatory agencies are having higher power to influence in the business with moderate to higher interest level. Considering this one of the important engagement policy of these stakeholders would be regular basis communication and consult at the earliest possible. Most of the strategy and processes of the business would be designed as per these stakeholder opinion and requirement (Husted & Allen, 2010). Therefore this early and regular communication and consultation approach would be highly useful. This communication must be planned early to make those fruitful. For the patients, Medical practitioner, hospital or privet clinic owner, the relationship developing approach is useful in this engagement process and it helps to deliver a long term approach in the engagement process. Another approach in this regard would be the risk management process. A risk register book would be developed here to understand the possible impact and likelihood of the risk. Based on that the possible strategy would be developed and that would be used for the for the engagement process. These are highly powerful stakeholder of the business. Therefore there would be times when some compromising approaches may have to be taken. At that time the success criteria and scope of compromise that would be developed earlier, must be consulted. On the other hand the supplier and staffs of the business would be another important stakeholder who has lower level of power and moderate level of influence in the business (Husted & Allen, 2010). The engagement policy of these stakeholders would be highly focused on the responsible way of doing business. Considering this a better relationship building, supplier or staffs support through training and development, motivational approach would be followed in the business operation.
The business is in the start-up stage and there is no plan to incorporate the business and list that in any reputed stoke exchange. The corporate filling would be required for the incorporated business. Therefore at the current level the corporate filling would not be highly required (Li, 2010).
The ‘Soin des yeux’ would have to sign different contracts with the supplier, buyer or other service provider. The formation agreement would be done for the loan, service related general contract, employment agreements (Audretsch, Aldridge & Sanders, 2011).
Capital Need:
|
Startup capital Investment |
|
|
|
$ |
|
R&D investment |
15000 |
|
Estimated G&A expense |
|
|
long term asset purchase |
5000 |
|
cash in hand |
100000 |
|
Total |
120000 |
|
Total initial Asset/Uses of fund |
131700 |
The funds are being used start-up investment and start-up expenses and the funds being used are being financed by the following sources.
|
Sources of fund |
|
|
|
$ |
|
own capital |
26340 |
|
Venture capital |
65850 |
|
Bank loan |
39510 |
|
Total |
131700 |
The different kinds of sources that are being used for financing the initial need of fund are as follows. 50% of the total fund is being financed by a single venture capitalist. Thus the venture capitalist is making a risky investment i n the business and thus the venture capitalists is getting 50% controlling power in the business.
From rest of the capital (that is rest 50% ), the seed capital is financing 40% of the total capital, However the seed capital is being collected from the main owner as well as four other co-owner of the business. In other words the seed capital is being gathered from 5 owners of the business.
From rest of the capital (that is rest 50% ),the bank loan is offering rest 60% of the fund to be invested. Here the, loan is being raised from five different banks as none of the bank where not ready to offer a large amount of loan term to the business(Feldstein, 2009).
The chosen organization is a start-up business and therefore the market is yet to get the status of corporate which requires that the business has to be listed in stock exchange. Initially the business is all set to start on the basis of debt financing where loan will be taken from bank and debt will be gathered from venture capitalists. Thus the business is already carrying a debt burden and therefore in rest of the future if the business decides to raise capital from the market then the business is only thinking of private equity investment where the equity share will be offered with in a close circle of inventors who are specially interested in the company and this process of private equity share offerings will help the business to keep the obligation with respect to the external investors at a very low level (Kaplan & Stromberg, 2009).
|
Start up expenses |
$ |
|
Pay roll Expense |
2000 |
|
payment of technical expert |
2000 |
|
Insurance |
500 |
|
Rent (first six month) |
2500 |
|
Equipment expense(related to purchase of inputs as well as input machineries) |
3000 |
|
Other |
500 |
|
Estimated G&A expense(including legal) |
1200 |
|
Total |
11700 |
|
Start up Investment |
|
|
R&D investment |
15000 |
|
long term asset purchase |
5000 |
|
cash in hand for investment |
100000 |
|
Total |
120000 |
|
Total initial Asset/Uses of fund |
131700 |
The pre money valuation of the company is expressed in terms of the total asset value okr fund being used by the company $131700
|
Sl. No. |
Product -Mix |
Assumed Number of units sold in first month of launching of the business |
cash earning on sales,$ |
|
|
|
|
Pricing($) |
|
|
|
1 |
Specialised Eye Scissors |
150 |
200 |
30000 |
|
2 |
Bipolar Forceps |
150 |
300 |
45000 |
|
3 |
Improvised Diamond Knives |
150 |
1500 |
225000 |
|
4 |
Non Laser refractive investigation machine (NL-RIM ) |
150 |
1000 |
150000 |
|
|
|
|
|
450000 |
So post-money valuation of the business after one-month of operation is $581700
After addition of expected cash sales earnings of $450,000
In the current business three different investors are considered. First and primary investment is from the co-founders and their investment contributes to 20% of total investment. They took bank loan for the long term and that account to 30% of total investment. The rest of 50% investment would come from the venture capitalist.
The current business is based on the biomedical industry. The transaction process and nature of the business is of business to business type. Considering this at the current level the business is aiming to attract venture capitalist who favours the biomedical industry (Mason & Harrison, 2017). Other than that in future other large firms from the bio medical industry would be approach to further support through investment. This would be mutually beneficial approach.
Out of ten investors five would come from the cofounder side, four from four different banks, and one large part from the venture capital side.
Audretsch, D. B., Aldridge, T. T., & Sanders, M. (2011). Social capital building and new business formation: A case study in Silicon Valley. International Small Business Journal, 29(2), 152-169.
Babler, S. D. (2010). The Next Wave of Managing Biomedical Projects. Pharmaceutical and Biomedical Project Management in a Changing Global Environment, 359-372.
Ballantyne, D., Frow, P., Varey, R. J., & Payne, A. (2011). Value propositions as communication practice: Taking a wider view. Industrial Marketing Management, 40(2), 202-210.
Boudreaux, E. D., Waring, M. E., Hayes, R. B., Sadasivam, R. S., Mullen, S., & Pagoto, S. (2014). Evaluating and selecting mobile health apps: strategies for healthcare providers and healthcare organizations. Translational behavioral medicine, 4(4), 363-371.
Chen, C. X., Lu, H., & Sougiannis, T. (2012). The agency problem, corporate governance, and the asymmetrical behavior of selling, general, and administrative costs. Contemporary Accounting Research, 29(1), 252-282.
Coleman, D., de Chernatony, L., & Christodoulides, G. (2011). B2B service brand identity: Scale development and validation. Industrial Marketing Management, 40(7), 1063-1071.
Cron, W. L., DeCarlo, T. E., & Dalrymple, D. J. (2010). Sales management: Concepts and cases. Wiley.
DiMasi, J. A., Grabowski, H. G., & Hansen, R. W. (2016). Innovation in the pharmaceutical industry: new estimates of R&D costs. Journal of health economics, 47, 20-33.
Don, A. (2016). “It is hard to mesh all this”: Invoking attitude, persona and argument organisation. Functional Linguistics, 3(1), 9.
Edlin, R., Hall, P., Wallner, K., & McCabe, C. (2014). Sharing risk between payer and provider by leasing health technologies: an affordable and effective reimbursement strategy for innovative technologies?. Value in Health, 17(4), 438-444.
Feldstein, M. (Ed.). (2009). The economics of art museums. University of Chicago Press.
Fries, R. C. (2016). Reliable design of medical devices. CRC Press.
grandviewresearch. (2018). Optometry/Eye Examination Equipment Market Analysis Report By End Use (Hospitals, Clinics), By Product (Ophthalmic Ultrasound Imaging Systems, OCT), By Region, And Segment Forecasts, 2018 – 2025. [online] Available at: https://www.grandviewresearch.com/industry-analysis/optometry-eye-examination-equipment-market [Accessed 21 Jan. 2019].
Hooley, G., Piercy, N. F., & Nicoulaud, B. (2012). Marketing strategy and competitive positioning. Prentice Hall/Financial Times.
Husted, B. W., & Allen, D. B. (2010). Corporate social strategy: Stakeholder engagement and competitive advantage. Cambridge University Press.
Tukel, O., & Dixit, A. (2013). Application of customer lifetime value model in make-to-order manufacturing. Journal of Business & Industrial Marketing, 28(6), 468-474.
Ingram, T. N., LaForge, R. W., Williams, M. R., & Schwepker Jr, C. H. (2015). Sales management: Analysis and decision making. Routledge.
Jamshidi, A., Rahimi, S. A., Ait-kadi, D., & Bartolome, A. R. (2014). Medical devices inspection and maintenance; a literature review. In IIE Annual Conference. Proceedings (p. 3895). Institute of Industrial and Systems Engineers (IISE).
Jensen, M. C. (2010). Value maximization, stakeholder theory, and the corporate objective function. Journal of applied corporate finance, 22(1), 32-42.
Johnston, M. W., & Marshall, G. W. (2013). Sales force management: Leadership, innovation, technology. Routledge.
Kaplan, S. N., & Stromberg, P. (2009). Leveraged buyouts and private equity. Journal of Economic Perspectives, 23(1), 121-46.
Li, F. (2010). The information content of forward?looking statements in corporate filings—A naïve Bayesian machine learning approach. Journal of Accounting Research, 48(5), 1049-1102.
Mason, C. & Harrison, R., (2017). Informal venture capital and the financing of emerging growth businesses. The Blackwell handbook of entrepreneurship, pp.221-239.
Mohr, J. J., Sengupta, S., & Slater, S. F. (2010). Marketing of high-technology products and innovations. Pearson Prentice Hall.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.
Pearson, S. (2016). Building brands directly: creating business value from customer relationships. Springer.
Powers, E. L. (2012). Organizational mission statement guidelines revisited. International Journal of Management & Information Systems (Online), 16(4), 281.
Priem, R. L., Li, S., & Carr, J. C. (2012). Insights and new directions from demand-side approaches to technology innovation, entrepreneurship, and strategic management research. Journal of management, 38(1), 346-374.
Ready, D. A., & Conger, J. A. (2007). Make your company a talent factory. Harvard business review, 85(6), 68.
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). London: Pearson.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more