I. TIME CONTEXT
After five years of combining the Central Luzon region, in 1978, David established a company called Generoso Pharmaceuticals and Chemicals or GPC with Elizabeth a business associate, Rafael Buenaventura who was a salesman like David. The team set up shop at the Generoso residence in Tarlac.
The Generoso pharmaceuticals and Chemicals Inc. is an industry where selling the Medicine and Drugs etc. that owned by David with Elizabeth and Rafael. The problems of this industry are how to make compete to the other Pharmaceuticals industry, because those days there are many industries that sell the same product, How to make and generate their funds and how low will be stay in the Pharmaceuticals industry.
III. STATEMENT OF THE PROBLEMS
How will GPC stay in competition in pharmaceutical industry in the Philippines? How will generate funds to continue with the project? What will be the effect of the Generic Bill if they will continue to do the project?
To know and determine the action of Generoso Pharmaceuticals and Chemicals in order to stay in the business. To be able to generate funds for the implementation of the project. To know the advantages and disadvantages of implementation of the Generic Bill in Generoso Pharmaceuticals and Chemical, Inc.
V. AREAS OF CONSIDERATION
* Competitors, Potential Substitutes and Potential Entrants Potential competitors are not limited to the firms considering offering exactly the same or differential products or services; substitutes to the existing products and services are also potential threat.
* Buyers and Suppliers
The competitive situation of the business is influenced by the nature of its transactions with its buyers and suppliers.
* Governmental Intervention / Generic Acts of 1988
There are governmental institutions that as a component of the general environment, affect not only one industry. On the other hand, there are also some created specifically to serve or regulated one industry or a few interrelated industries.
The company was now a going concern valued at P40 million. The proposed project would cost approximately P135 million. The need to hire a German expatriate to oversee the problem and the additional budget for the project. No Filipino chemist who specialize the technology of the project could qualify for GPC to remain competitive
VI. SWOT ANALYSIS
* Liquidity of the Company
* A wide supply for raw materials
* Conservative cash management policies
* Tend to adapt more on the situation of implementing Generic Bill
* Less quality of their products
* Expansions are too costly
* Lack of additional capital
* Poor management
* A good project
* Contacts in the US who provides supply
* A large area for expansion
* Stability of the economy
* Risky project because it’s too costly
* Potential entrants of groups in the industry
VII. ALTERNATIVE COURSES OF ACTIONS
* GPC should accept the project and hire Qualified German Expatriate
a. It will make the company stay in competition
b. Higher quality of products can be attained and offered in lower prices
c. Creditors(investors) will provide the needed budget
a. It is too costly and risky
* Accept the project and GPC can borrow money from banks or other financial intermediaries.
a. Early implementation of the project
b. Long term payments
c. Can gain additional support for the project.
a. Generates interest
b. The longer the period the debt is not paid, the higher interests generates c. The borrower pledges some assets as collateral for the loan.
* GPC should not accept the project and stay small
a. It will cost less and less risky for the company
a. it will not make the company competitive
As a Recommendation, we therefore recommend that the best alternative action is to accept the proposal of the project for Generoso Pharmaceuticals & Chemicals, Inc. in order for them to stay in competition and reputation. The company can find investors or borrow from creditors or other financial intermediaries that will provide the needed budget. The company will hire experienced German chemists, who can make the company stays in the competition and can achieved high quality of products and be sold at lower prices, which will be more attracted to the buyers (who are majority are less fortunate Filipinos and cannot afford to buy medicine that much).
In the conclusion, although costly and risky, the Generoso Pharmaceuticals and Chemicals, Inc.(GPC) can pursue the proposed budget even if they have insufficient fund to supervise the project. If they can find investors to invest then it will be a win-win situation for both of them if it the project will be a success. Especially now that having the Generic Bill will surely make them to have a fair competition with their competitors. It is also their advantage to produce high quality of products because of the German expatriate’s qualifications and even sell it to a cheaper price.
Courtney from Study Moose
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