Malijan, Mary Erjoy D. GENEROSO PHARMACEUTICALS AND CHEMICALS, INC TIME CONTEXT 1978 and in 1988 – GPC engage in the contract manufacturing of pharmaceutical products for both the domestic and export markets and the Generics Bill came in. SUMMARY / ABSTRACT This case examines the management of Mr. David Genereso in the GENERESO PHARMACEUTICALS AND CHEMICALS, INC to become a productive and successful company. Mr. David Generoso was a philosophy graduate of a sectarian university in the Philippines.
He began his career in the Philippine pharmaceutical industry at the Central Luzon Region. He married Elizabeth Reyes, a nurse and certified public accountant and they have been blessed by 5 children’s. David established a company called Generoso Pharmaceuticals and Chemicals (GPC) with Elizabeth and a business associate Mr. Rafael Buenaventura, the team set up shop at the Generoso residence in Tarlac. An initial capitalization of P300 started the business with a dozen bottles from the pharmaceutical firms which they had been connected with before.
GPC was able to establish a good track record fast and its customer base expanded beyond the region. David and Rafael had to hire extra hands to peddle their goods: 2 sales representative in1978, 5 in 1979, 12 in 1980, 25 in 1981, 53 in 1982, and 75 in 1983. From its initial assets of P300 in 1978, GPC had total assets of P12 million in 1983which consisted of a dozen vehicles, a few pieces of real estate in the Central Luzon Region, an office, a modest amount of inventory and cash.
Elizabeth initiated GPCs reorganization to control over different product lines, which by the year 1988 was composed of several subdivisions: Pharmaceutical Distribution Division, Agrovet Division, Cosmetics Division, Raw Materials Indenting Division and the Contract Manufacturing Division. As of 1988, there were 32 large-scale pharmaceutical laboratories in the Philippines, most of which manufacture only their own brands and/ or brands licensed by foreign drug manufacturers and about six were engaged in contract manufacturing. There were an estimated 150 distributors of imported pharmaceutical products in the country, and among them is GPC.
Together they serviced an estimated market of at least P5. 7billion, based on retail sales statistics from the National Census and Statistics Office. No one is engaged in theextraction of active ingredients from locally available raw materials or in the formulation of new products from known active ingredients. As a result, the country continues to rely heavily on imported pharmaceutical products and raw materials, which have averaged at U. S. $67. 853million annually from 1982 to 1986 according to Foreign Trade Statistics of the Philippines.
In 1988, the American principal offered his plans to David of GPC engaging in the contract manufacturing of pharmaceutical products for both the domestic and export markets. The proposed project was to compound locally all products that it will manufacture and sell, importing only the active ingredients and bulk materials that it is unable to produce locally. Heavy emphasis would be placed on applied research to extract and develop active ingredients from locally available raw materials, health foods, fibers, food supplements, and other over the-counter products. The company was now a going concern valued at P40 million.
The proposed project would cost approximately P135 million. I. STATEMENT OF THE OBJECTIVE * To be able to continues strategic planning. * To be able to come up with the additional budget to implement the project. * To have environmental strength. II. CENTRAL PROBLEM * To determine possible action of GPC in order to continue in the competition and find additional fund for the project. III. AREAS OF CONSIDERATION (SWOT ANALYSIS) * The company has a going concern value of P40 million, and the project will cost P135 million. * The American principal offered his plan to engage GPC to export the products.
SWOT ANALYSIS STRENGHTS| WEAKNESSES| 1. Ready for expansion| 1. Short on financial resources| 2. Strong financial condition| 2. Expansions are too costly| 3. Reputation of good customer service | 3. Weak advertising and promotions| OPPORTUNITIES| THREATS| 1. Ability to grow rapidly| 1. Risk of the project because it is costly| 2. Business expansion| 2. Entry of new competitors| 3. Opening to emerged with new technologies| 3. Government new policies and regulatory restrictions| IV. ALTERNATIVE COURSES OF ACTION 1. Generoso Pharmaceutical and Chemicals should not accept the project and stay small. ADVANTAGE Less cost and risk. DISADVANTAGE * The company will not be competitive. 2. Generoso Pharmaceutical and Chemicals can borrow money to the bank. ADVANTAGES * Can implement the project early. * Long term payments. * Can support the project. DISADVANTAGE * Has an interest. * The longer the period the debt is not paid the higher interests. * The borrower pledges some assets as collateral for the loan. 3. Generoso Pharmaceutical and Chemicals should accept the project. ADVANTAGES * Higher quality of product should be obtained. * The company will remain competitive. DISADVANTAGE * It’s too costly. * Risky The creditors need to provide funds. V. RECOMMENDATION I therefore conclude that the best solution to the problem in alternative course of action is number # 2 which is the Generoso Pharmaceutical and Chemicals can borrow money to the bank because even though you had a debt and it can generate interest you can pay it because of you new technology that has and you will remain as a competitor and has a high quality of product but in a lower price. VI. STRATEGY FORMULATION Discussed the project to everyone. Have a budget. Consider the new customers that you might have. Your environment can suit with this project.
Your employees were capable of doing this project. VII. PLAN OF ACTION ACTIVITIES| PERSON RESPONSIBLE| TIME FRAME| BUDGET| Discussed the project| Owner and Principal| 1 day| | Make a detailed plan| Principal| 1 – 2 weeks| | Borrow money from banks| Owner| 1 month| | VIII. POTENCIAL PROBLEM 1. What if the project failed? 2. What if the company was not capable to pay his debt? 3. What if the budget that you collect was not enough for the project? IX. CONTINGENCY PLAN 1. Make a plan that can recover the company if the project failed. 2. Find some businessman who wants to be part of a GPC. 3. Make some Marketing and Advertising strategy.