Theoretical Framework: Generoso Pharmaceuticals and Chemicals, Inc. is facing another challenge in order to stay in business.

From being a new entrant to being stable, now reaching for their goal to success. For them to continue and/or grow, the firm must be correctly position itself within the industry they are in. It must be able to identify its current position within the industry as well as define what level of impact it seeks to exert within that industry. Its about knowing where you are and where want to go. Well the GPCs position is like this figure:

The company position itself to this specific industry, pharmaceutical industry, where the company is in the middle where it directly interacts with direct competitors, which is the specific environment. And the specific environment interacts with the general environment, where forces for changes occurs in economic, political, technological, social, cultural, etc. which may affect the course of the business. In line with this for them to be able to define the level of impact it seeks to exert in the industry, they must be reminded of the policies of the company, like the major policies of maximize profit and minimize losses, products and/or services the company will produce and sell, position within the firms industry, no growth policy, geographic market, product quality, ownership, and degree of social responsibility. These major policies should be known not only to top management, but also, down to the lower levels of management. This is so to prevent a bad decision making, like what happened when David was gone to the USA. If major policies will be clear to everybody in the management then the operating policies will be in accordance with the strategic plan and its objectives. This will also lead to a better decision making and planning for the good of the company. David and the team should be reminded of their policies to be able to come up with the right decisions regarding their new challenge in the industry.

Statement of the Problems: y y How will GPC stay in competition in pharmaceutical industry in the Philippines? How will they generate funds to continue with the project?

What will be the effect of the Generic Bill if they will continue to do the project?

Statement of the Objectives: y y y To determine the actions of GPC in order to stay in 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 GPC.

Areas of Consideration: These are the areas to which your organisation may need to give serious consideration in order to successfully stay in competition and/or address diversity and equal opportunities. Competitors, Potential Substitutes and Potential Entrants Potential competitors are not limited to the firms considering to offer exactly the same or differential products or services; substitutes to the existing products and services are also potential threat. In the local market, the project will position itself as a specialty pharmaceutical manufacturer which can manufacture products not currently available from the industrys contract manufacturers and yet at affordable and cheaper price.

Buyers and Suppliers The competitive situation of the business is influenced by the nature of its transactions with its buyers and suppliers. According to Bengzon (Business World Industry Report: Pharmaceuticals) Precisely because people are poor, any measurement that can stretch the peso value of whatever we have will go a long way. In short, majority of Filipinos cannot afford to buy medicine, especially those branded ones.

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 bill is just about the promotion, encouragement and requirement of the use of generic terminology in the importation, manufacturing, distribution, marketing and advertising and promotion, prescription and dispensing of drugs. It does not require production. All it is saying is that every step, as you move from source to end-user, the generic name must appear.

The generic bill will definitely benefit the end users as well as smaller pharmaceutical companies are more adaptable to the situation. Because of the Generic Bill, there is a spurred of an overall feeling of uncertainty in the drugs industry. Nevertheless, some sectors realized that it will always be there.

Funds 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

SWOT ANALYSIS - is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a projector in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. Companys Objective: to expand from small to larger company and produce quality products Strengths * 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 Opportunities * A good project * Contacts in the US who provides supply * A large area for expansion Weaknesses * Less quality of their products * Expansions are too costly * Lack of additional capital * Poor management Threats * Stability of the economy * Risky project because its too costly * Potential entrants of groups in the industry

Alternative Courses of Action: 1. GPC should accept the project and hire Qualified German Expatriate Advantages: 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 Disadvantages: a. It is too costly and risky 2. Accept the project and GPC can borrow money from banks or other financial intermediaries.

Advantages: a. Early implementation of the project b. Long term payments c. Can gain additional support for the project. Disadvantages: 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. 3. GPC should not accept the project and stay small Advantages: a. It will cost less and less risky for the company Disadvantages: a. It will not make the company competitive Conclusion and Recommendation: 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 expatriates qualifications and even sell it to a cheaper price. 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 case of the Generic Bill, this will not affect them that negatively but the other way around. The bill is just about the promotion, encouragement and requirement of the use of generic terminology in the importation, manufacturing, distribution, marketing and advertising and promotion, prescription and dispensing of drugs. It does not require production of generic drugs, it just need to include the generic name along with its branded name. And also, since they are not like multinational companies that sell medicines at higher prices, this would not affect them greatly. The bill does not also imply the forbidding of the importation of raw materials, like the old importing control days. The bill rather gives them the opportunity to stay competitive with other company big or small. Usually the more affected ones on this bill are the multinational companies and doctors.

GENEROSO PHARMACEUTICALS AND CHEMICALS, INC.

M16

Antipolo, Acel John R. Cedana, Christian Fev E. Hilario, Jane Nathalie B. Jorquia, Jarmaine V. Ragundiaz, Regie Valdez, Fernando Jr C. Villalva, Luthor Ace