Case Study Responses

Case study responses
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Case study responses
PART I
Objectives
The main objective of this project is to carry out diligent research on how to develop products that maximize value. This will involve organizing and prioritizing future and current projects in a manner that will fit the PMB 5 billion budget. The projects aim is to ensure that there is an increment in growth, sales and the value of stakeholders (Reyck, 2005).
Constraints
The research and development of drugs is a time-consuming exercise that is also risky and extremely expensive. XYZ Pharmaceuticals operates on a limited budget and therefore needs to make optimal decisions that will ensure efficient allocation of the available resources. The presence of generic drugs in the market that are lowly priced is another major concern because of the competition that the lower priced drugs bring to the market.
The heavy industry regulations also pose major challenges as it takes a lot of time and money to be licensed. The shrinkage of the time span of the market and the overreliance of the return on investments to return part of the research and development costs is also an area that negatively impacts the project.
Risks involved
Researching and the subsequent development of drugs is quite an expensive venture and a lot of risks are involved. Some of the major risks include failure of the drugs to hit in the market, lack of enough funds to carry out quality research and the subsequent development of the drugs meaning that funds may be wasted if the process is not completed.

Moreover, even those drugs that get into the market only a small percentage of 30 gain commercial acceptance. The growth of XYZ competitors and patent acquisition also pose major risks that must be monitored so as the company can be able to remain in the market (Reyck, 2005).
Alternatives
The alternatives available in this project are those of reducing the costs spent on research and development while at the same time ensuring that quality research on the feasibility of the products has been done before manufacturing begins. This will ensure that no drug will be discarded once manufacturing has begun.
Required information and how to collect it.
All independent research and development projects including their cost. Technical success probability. Projected launch year, pre-cost, return on investment and market risk. This information can be collected by comparison from competitor’s costs and sales or previous year’s costs and sales.
PART II
There are several methods that can be used to evaluate the risks associated with projects. Some of these methods that can be useful in this case include: Identifying and evaluating the type of risks that are associated with such projects. This will also involve the computation of the net present value of the project after determining the probabilities of failure and success.
PART III
To properly asses the risk which is embedded in project 1, it is essential that research of the various risks in the market is done. This should include the determination of the failure and success rates of the project. Evaluation of familiar and similar projects can aid in successful implementation of this specific project. Quantitative methods such as forecasting can be used in the determination of project risks.
PART IV
Given the budget constraint of only 50 million dollars, it is essential to choose the available projects in a manner that can be able to optimize the required needs. Return on investment can be used to choose the best project to undertake. The use of this method involves choosing the project with the highest return on the investment and putting projects with the lowest return on capital on hold. Some of the information that will be useful to collect is the return on investment because it will keep track of the companies that will be able to give optimal. Quantitative tools such as the “Deterministic decision model” can be used to choose the portfolio (Alguire, 2010).
References
Alguire, P. (2010). Quantitative Decision Tools in Medical Education. JAMA, 303(18), 1812. 
Reyck Bert De, (2005). Case Study; Project Portfolio Management at XYZ Pharma. London Business School.