Oral Insulin: Breakthrough Innovation at Biocon Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem Definition

The company is in the most critical stage of their Oral Insulin project in order to execute the IN-105 strategy, the risk and difficulties associated with this project increases as this is project is more risky. However, financial situation of the industry in the year 2009 increased the level of difficulty for the company to successfully implement the Oral Insulin project. Additionally, the major problems of the company include funding for their high risk Oral Insulin project, the risk of losing money that is associated with the employment of IN-105 strategy and also the declining economic conditions that may impact the market share of the company. There are three issues that are connected with the Biocon decision related to execution of the Phase III as the two previous phases showed that it has the potential to get success in the future.

Firstly, the first is facing difficulty in deciding whether the company should proceed with the Phase III of the project due to the high risk linked with it, as the company wants to ensure the chances of success of this project as well as its impact on the balance sheet and income accounts of the company. Secondly, Biocon is facing difficulty in deciding whether to go locally or globally in order to implement the Phase III of the high risk Insulin project as going ahead to Phase III in India has its own risks and advantages. Thirdly, while making the decision related to going with partner or alone in the IN-105 Phase III is another challenge for the company.

Data collection

The data provided in the case is used in order to evaluate the efficient and optimized solution for the company’s problems associated with their high risk Oral Insulin project. However, the data provided in the case is historical as well as future assumption based data by examining the past trend of the market growth and productivity of the company itself is also included. Furthermore, the data available in the case that is provided by the company will be used to determine the limitation that the company will have while developing and marketing their Oral Insulin. The assumptions are made by the company to move with the phase III of Insulin project.

Model Development

The linear programming model is developed in order to allow the company to analyze the possible optimal solution of the existing problems in the country. Biocon wants to meet the growing needs of the increasing diabetic patients who want the proper treatment for their disease. The spreadsheet linear programming models are developed to evaluate the optimal solution of the company’s objectives that include minimizing the cost and maximizing the profitability for the Oral Insulin project.

The linear programming model provides the opportunities to the company to correctly analyze the problems as this spreadsheet model represents the real problems accurately. However, the variables represent the linear (straight-line) function. The objective function of the linear programming model includes the different constraints within the model that are faced by the company.

This linear programming model is good as it helps the company to easily view and understand the variables within the spreadsheet model. In addition to this, the linear programming model is easy to solve as it includes the simpler functions that make it easier for the user to apply this model in order to formulate the problems so that they can get the optimal solution for that. Moreover, the spreadsheet linear programming model helps by providing the capability to change the “by changing variable cells” in order to view the changing results quickly.

This will help the company to get the appropriate solution for the existing problems as well as it will also allow the company to correctly understand the impact of the constraints in the long-term success of the company.

Model Verification

The implementation of the linear programming model along with the constraints will help the company to achieve the objective of the successfully implemented oral insulin project. However, this model will allow the company to estimate the minimum cost for the development of the IN-105 as well as maximum profit associated with this project. In addition to this, due to the flexibility of the model to manage the data as well as the capability of the model to develop “what if” statements within it, would allow it to simulate real life situations................................

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This case deals with issues of innovation medium-sized firms (up to $ 1 billion) in emerging economies (India), in particular, the problems of the development and commercialization of the product. Management must decide what to do with the perspective of the novel formula for oral insulin - a promising therapeutic area both in terms of financial return and social impact. The company spent several years R & D to obtain drugs through Phase I and Phase II trials, and came at a critical stage, the stage III. The case is set in 2009, in a period that is punctuated with great economic uncertainty. Students are asked to decide if Biocon should go ahead with Phase III, and if so, then it should be done locally or globally, and with a partner or alone. The case also has to deal with the transition of research and development strategies in emerging markets, where firms that have traditionally focused on the simulation "(or generic) drugs are switching to high risk." Hide
by Charles Dhanaraj Source: Richard Ivey School of Business Foundation 18 pages. Publication Date: August 5, 2011. Prod. #: W11276-PDF-ENG