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The Executive Director has been asked by Max Barney to put together, and present in a memo to him, a business strategy that will be a guide for the next year as the new division moves forward. The Executive Director will be working with the consulting group over the next 5 weeks and they will assist with putting together this plan. A detailed layout of instructions are attached in the Project 2 word document
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Biotech Health and Life Products
Company Profile
Welcome to Biotech!
The assessment projects for this class will examine different facets of the leadership of
Biotech Health and Life Products, Inc. You will be exploring leadership within Biotech
with the driving question of “what skills does a Biotech leader need to lead the company
now and in the future?”
History
Wilford Barney was a young apprentice working for Peter Ulan, owner of a small
apothecary shop in Yonkers, New York. During his apprenticeship, Barney created a
general energy elixir that was based on a home remedy of his mother’s back in Ireland.
The elixir was produced specifically for many of Ulan’s special customers. Made of all
natural ingredients the elixir provided B12 and other vitamins to promote a healthy
immune system. The energy boost was noticeable after only a week’s use. The
reputation of the elixir grew.
In 1922, Barney took over Ulan’s apothecary shop renaming the business, Barney’s
Apothecary. At that time, Barney decided to bottle his elixir and sell the formula to
everyone rather than selected customers. Barney also gave bottles of the elixir to local
peddlers who sold the product along with their wares receiving a commission on each
bottle they sold. By 1929, the product was well known in Yonkers. Encouraged by the
success in Yonkers Barney decided to branch out to New York City.
In 1932, Barney built a small manufacturing plant near the store where he mixed and
bottled the elixir for sale. By 1934, Barney expanded sales by putting the elixir in a quarter
of the apothecary shops in New York City. Sales were booming and customers inquired
about other products that Barney’s had.
In 1936, Barney started a new product called Night Relief, another of his mother’s recipes.
This product offered relief from night sweats and anxiety caused by menopausal
symptoms or nerves. When this product proved a “secret success” with the ladies, Barney
decided to bring his mother, Irene, from Ireland, and put her to work making new natural
products. With his mother’s help, Barney grew the business into a small but successful
manufacturer of natural “life products”. Barney coined “life products” because the
products tracked natural life events in the human body and attempted to improve the
customer’s discomfort in dealing with them.
The name of the company was changed to Barney’s Elixir and Life Products. The
business continued to grow and with his mother’s death in 1938 the company had a gross
revenue of $178,000 a year. The depression took a toll on company profits but people
still needed the boosts to their health and were able to afford Barney’s products as
opposed to the medicine offered by doctors and hospitals. During World War II the
company supplied the troops with a natural caffeine (Stay Clear) product that would keep
soldiers awake for long periods of time and heighten their mental alertness. Government
contracts derived from Stay Clear boosted the revenue of the company considerably and
ushered in a new wave of interest of natural products.
By 1950 Barney turned over the reins of the daily operations of the business to his children
but remained on the Board of his family owned company. By this time, the company had
expanded its manufacturing plants and sales nationally to include Detroit, Michigan, Los
Lunas, New Mexico, Chicago, Illinois and Atlanta, Georgia. The revenue of the company
was now close to 2.5 million dollars.
In the 1960’s the social climate in America had changed and pharmaceutical companies
took on greater importance in the treatment of people’s health. The discovery of new
drugs and better health care shifted the confidence in the American perspective away
from natural products to traditional western medicine. Although the counter culture of
America still supported natural supplements, popularity for Barney’s products waned.
In 1965, Wilford’s granddaughter, Geraldine, took over the Research and Development
Department (R&D) after receiving a degree in chemistry from Harvard. She had been
trained as a child by her grandmother, Wilford’s mother, and knew how the recipes should
look. However, she had new ideas and with the approach of the 1970’s, was ready to
join the “Anjolie perfume commercial” lifestyle depiction of a 70’s women that “they could
bring home the bacon and fry it up too.”
Due to the downturn in sales by 1970, the company turned to other countries for its sales
base. Starting in Germany and other European countries where natural products are
highly credible, Barney began to license the sale of the company’s products to local
manufacturers. The name recognition grew and by the 1980’s the company was grossing
over 4 million dollars in gross sales. The company moved to overseas operations and
manufactured in Germany. Wilford Barney died in 1981 shortly after seeing his first
grandchild, Maximillian Barney, take over the President’s positon of the company.
Studying the trends in the 1990’s about the resurgence of natural health products “Max”
as he liked to be called, decided it was time for Barney’s to focus on the new interest in
homeopathic and natural products especially at home in America where sales were static.
In 1996, Max, wanting to get a sleeker and more modern feel to the company’s products
changed the company name and logo. No longer was Barney’s a mom and pop operation
but is an international business. Barney’s Elixir and Life Products was now Biotech Health
and Life Products. While the products would continue to show the old Barney logo, for
name recognition the new logo would take prominence on the packaging.
By 2000 the company was grossing about 1.1 billion in sales with an increase in market
share. By 2012, Biotech had a 20% market share of the supplement business with
Approximately $25 billion in sales. The company is interested in expanding into infant
formula.
.
Currently sales for the company are at $45 billion. Maximillian Barney is still
President and CEO. The stock is still held by the family and all senior management
positions are held by family members.
Current Company Vision: To help provide everyone with the healthiest life possible
in the most natural of ways.
Current Mission: To develop products that are safe, effective, affordable and
natural with the customer’s health always their primary goal.
Current Fact Sheet
Headquarters
Worldwide web address
President
2016 Gross Sales
Employees
Yonkers, New York
www.biotechlife.com
Maximillian Barney
US$ 45 billion
38,000 in 6 countries worldwide
Manufacturer Operations
United States
Battle Creek, Michigan, Albuquerque, New Mexico,
Elkton, Maryland, Peoria, Illinois and Atlanta, Georgia
Europe
Asia
South and Central America and Caribbean
Canada Product
England, France, Netherlands
Sapporo, Japan
Salvador, Brazil
Calgary, Canada
Lines
Protein and Fitness; Personal Care, Vitamins and
Food Supplements, Infant Formula (Pending)
Major Competitors
Protein and Fitness-GNC,
Personal Care- Nestle Skin Care- Galderma, SA;
Glaxo, Merke, General Mills.
Vitamins and Food Supplements- GNC, Natures Plus,
Natrol, Nature’s Way, Nature’s Bounty, Hain Celestial
Group, Inc, Schiff Nutrition International, Nestle
Current Business Philosophy
Biotech has determined its long-term goal planning pattern should be no longer than
three years. Three years seems more flexible than the seven year planning pattern
previously used as change in the business climate is making it imperative to be more
flexible. The need for innovation and competitive advantage ideas are the main focus
for the next two years along with the company’s commitment to becoming a triple bottom
line company. Sustainability both for profit and planet is foremost in the minds of the
leadership. The development of a triple bottom line company is in the best interest
of the company because of the need to keep a strong natural product image link to
the community and the desire for the company to be socially responsible. Protection
of the suppliers and control over product quality is critical to the development of a sound
“life product.”
Current Growth Plans
Business and Sales
Biotech is looking to expand and is exploring the opening of a new manufacturing, sales,
and distribution facility in the next year. Currently, products are sold through t h e U S
a n d i t s European division but there is a great demand for its current product in Malaysia
and China as well as in the United States. It was decided by senior leadership to explore
a potential manufacturing and sales presence in these three areas, which would potentially
increase sales and would fall under the control of a new Executive Director. As in keeping
with the all-natural products, the company wants to bring a greener footprint to its new
facility going beyond what many competitors have in place. This as an opportunity to gain
market share; and introduce a new product line. This effort would provide a good test case
for new products that would position Biotech as a leaders in innovative technology.
Product Development
Biotech is looking to develop an infant food line. The company has recently expanded
and is now interested in pursuing infant formula.
Current Eco Sustainability Commitments
Currently, Biotech has current commitments to build housing for several communities
in Brazil and India where natural pharmaceutical ingredients are produced. The program
reflects the company’s strong commitment to making the company a triple bottom line
company by the year 2021.
Innovation and Adaptability
Development of organizational structure and culture changes are being made to introduce
more collaborative decision making as well as bringing the divisions closer together in the
area of shared resources and communication. The emphasis is to encourage the
exchange of ideas, create an environment that fosters new ideas and makes change
easier in implementation of initiatives. Biotech is concerned that the stateside
organization is driving the other overseas divisions and that new ideas are being
encouraged because of the cultural differences in staff.
Customer innovation
workshops run by the various divisions have highlighted that R&D in Europe and
Australia see differences in consumer preferences from US consumer preferences, and
Biotech would like to incorporate this knowledge in its future facility. It is believed that US
controlled resources are ignoring these product preferences and are thus impeding
overseas sales. Corporate leaders are trying to examine how to answer this cultural gap.
Current Corporate Culture
Being a family owned business, Barney’s new image has made the family a little less
cohesive since it seeks to be a sleeker less clan like organization. Still the family leaders
are committed to keeping the family history as a symbol for the company. It is believed
that the family cultural connection gives support to collaborative decision making
something the Company has been successful in promoting throughout the organization.
It is also seen by the owners that their family and employees makes up the company’s
customers. The family wants to encourage a customer centric culture, one that allows
employees to see everything through the perspective of the customer and to make
decisions with the customer’s view always paramount. Furthermore, there would be a
companywide accountability to the customer in all departments. The owner wants a
workforce that gives an extraordinary customer experience in every product it makes.
Current Organizational Structure
This company has a geographical division structure. However, within each division is a
functional structure with production and sales at the hub. R&D, HR, IT and Finance have
small staff in each division whose primary job is to liaison with headquarters to implement
the decisions made by them.
Above all the Divisions is the President and CEO
Maximillian Barney Housed in headquarters is the R&D,
HR, IT, and Finance Divisions
Executive
Director South
America Division
Executive
Director North
American
Division
Executive
Director
European
Division
Executive Director
New Division
(Infant Formula)
Baby formula is meant for children who cannot breastfeed or are not on exclusive
breastfeeding due to the working hours of their mothers. According to Centers for
Disease control and prevention, only 15% of infants in America go through exclusive
breastfeeding in their first six months of life. This means that most parents look for the
best formula for their children. The best baby formula depends on the ingredients that
are good for the baby and important organics and enhancements for the mother.
Therefore, pediatricians teamed up with the food policy expert, analyzed formula
ingredients and picked the best that mimics breast milk.
The best baby formula should have ingredients that are closer to the ones for
breast milk. The products should be easily digestible for the infant. Lactoferrin and milk
fat globule membranes are the most important part of the content. They are essential in
digestion and improve the consistency of the stool like in babies who are breastfed. It
should also contain probiotics and prebiotics that enhance the essential bacteria in the
human alimentary canal just like the breast milk. Moreover, lactose should be used as a
sweetener in the formula like in colostrum instead of corn-based sweeteners. Non-GMO
products are also important for the organic benefits. GMO products are processed foods
and include; soybeans, corn, sugar beets and innate potato (Cleminson, J. et al. 176).
The baby formula that was identified to contain all these products was Enspire Infant
Formula.
Baby formula is a manufactured version of breast milk and is categorized as a
dairy substitute. It contains proteins, fats, and carbohydrates that are mixed by blending.
Improper mixing may result in the illness of the baby. The infant formulas are highly
complex for the needs of a developing baby. Proteins are important raw materials for
the formulas. The source for this is the dairy milk or the soy beans. However, soybeans
may not be a best ingredient since it may be genetically manufactured. Fats and
Carbohydrates are other important dietary requirements for an infant. The fats are
extracted from fish oil that has compound triglycerides. The diluents used for the baby
formula are purified water or skim milk. Essential minerals to be added in infant formula
are calcium, sodium, phosphate, potassium, chloride, iron, magnesium and copper.
Iron is more essential for the growth of the babies. Vitamins are used to increase the
nutritional value of the formula (Rothley & Tamara 797). The best source of these
products is from the animals and plants. They are non-genetically manufactured hence
good for growth of the infants. The potential percentage net profit of this should be high
in the industries that process them. This is because; they are natural products that are
used in different essentials apart from baby formula industries. Moreover, most of the
formula industries use these materials for their products. Thus they are highly
marketable. Dairy milk has more profit compared to soya beans since it is the best
source of digestible proteins for infants.
The performance of the best organic formula in the market is slightly lower due to
its higher price and the presence of other generic products. The product, Enspire infant
formula, is costly due to its special ingredients and exemplary additives. The other
organic formula companies perform better due to lower prices of their products. These
include; Gerber and Earth’s Best organic infant formula. These products provide
ingredients similar to Enspire only that it uses soy beans as the proteins. Therefore,
they are more, successful compared to Enspire.
If the director wants to relocate overseas, ethical considerations is the most
essential requirement. Ethics are principles that stand as a guidance of an individual’s
behavior due to the social beliefs in the community, cultural and religious practices. Any
outsider should consider these ethics before introducing market for his products. It
determines if they are fit for consumption in respect to their practices. The Director,
therefore, should respect the culture when choosing staff from the overseas. Due to
better understanding of the culture, the director should choose the managers,
supervisors and senior leaders from the local division. They would be able to lead
according to the community thus more profitability. The structure of the leadership
should consider the objectives and performance of the business. The last product
consumer is the key player in the business and should be put into more consideration.
Internal and external stakeholders should be considered during formation of the
leadership constituents. These are the employees, the managers, the owners,
advertisers, site owners, customers, suppliers, shareholders, government and
shareholders of the company. The structure should include Assistant Division Director
for Finance, Operations, Marketing and Sales (Brickley et al. 210). Forming this
structure may bring about an ethical dilemma. The Director can solve by choosing the
person who thinks he do his best. Justice should also be considered here by ensuring
equality has been adhered to. Depending on the skills of the chosen individuals, they
will fit into their dockets, that is, finance, marketing, material sourcing, and the
manufacturing process.
References
Brickley, James A., Jeffrey L. Coles, and Gregg Jarrell. “Leadership structure:
Separating the CEO and chairman of the board.” Journal of corporate Finance 3.3
(2014): 189-220.
Cleminson, J., et al. “Being baby friendly: evidence-based breastfeeding
support.” Archives of Disease in Childhood-Fetal and Neonatal Edition 100.2 (2015):
F173-F178.
Rothley, Tamara. “Electronic baby formula preparation and storage device.” U.S. Patent
No. 5,797,313. 25 Aug. 2015.
Running Head: EXTERNAL AND INTERNAL ANALYSIS
1
External and Internal Analysis for Biotech and the Industry in which it Operates
A strategy gives an organisation the guidelines in which the business has to adopt to
increase competitive advantage in the long run. It enables the company to adequately
configure resources to increase the market share. A business has to have a direction and scope
to meet goals and to meet the expectations and dynamism of the business environment. The
pharmaceutical industry is one of the most competitive sectors currently since there is a
constant demand for such products.
The current generation is marred by changes as there are constant improvements in
the products. It is competitive since medical personnel are currently using evidence-based
practice to inform their decisions. It means that pharmaceutical companies have to up their
game so that they can offer well researched and latest products. The trends for these products
are majorly driven by various factors as discussed below. This analysis seeks to critically
examine the external and internal factors that might affect Biotech and the baby formula
industry. It will conduct the PESTEL and SWOT analysis. Finally, it will investigate the
goals and objectives of the firm and how it can improve its competitive advantage.
PESTEL Analysis
A PESTEL analysis gives in-depth insights into the macro-economic environment that
affects business. A business not only has to consider the competitive forces but instead
should consider the factors that might give it a business a weak growth trajectory. The
rationale is if the business is affected by the political, environmental, social, legal and
technological the landscape it operates in will be affected. A PESTEL analysis is critical in
strategic planning as it enables a business to mitigate risks by planning for uncertainty.
EXTERNAL AND INTERNAL AN …
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