Establishing Small Scale Enterprise for Newly Discovered Formulation

This report provides a solution to establish a small scale enterprise for a newly discovered formulation. It analyses data to suggest the best country to start the business, based on six indicators. The report concludes that the United States is a better place to start the business than Australia.

Title:
“Junyu Needs Your Advice”
Student Number:
Student Name:
Submission date

Executive Summary
This report tries to provide solution to a client, whose main objective is to establish a Small Scale
Enterprise for her newly discovered formulation, discovered drug energizes its user only after four
hours of daily sleep. Discoverer of this new drug has ambition of establishing new business through
this creative disruptive idea, but, do not have fund to do clinical research and establish new firm.
Though, she has two countries in mind and already has patent rights in these countries, Australia
and United States. She consulted business expert to setup her new business, expert advised her
based on six indicators, after analysing all relevant data.
Analysis of data proved that United States is better place to start her new business/firm, rather than
Australia, because United States is more business friendly than Australia in four of the six indicators,
and, in 3 out of these 4 indicators United states placed at top position, among 140 countries, and
Australia finds herself way behind of United states as per the analysed data of World Competitive
Index Report, 2018, client given percentage weights criteria and formula evolved by the expert.

Table of Content
1. Introduction
2. Analytical development
3. Conclusion
4. Appendix

1. Introduction:
On her completion of Ph.D. in Biology, Junyu has discovered a new formula, which required only four
hours of sleep a day without feeling tired the following day, it certainly has the potential to disrupt
the market and revolutionize the pharmaceutical industry. Junyu already has a patent for her new
discovery, which is valid in Australia as well as in United States. JunyuLee has been contemplating of
starting her business in any one of the two countries.
Since, Junyu do not have any business knowledge but she would like to make full use of this
discovery and make maximum amount of money through the help of finance for her project from
some venture capitalist or some financial institutions to establish and commercialize her new
business.
2. Analytical Development:
Task 1
Looking at potential of this new business, banks or financial institutions would be willing to lend
money, because, it is a creative disruptive idea and if commercialize properly after accurate clinical
trials can shake the drug market for good reason and generate enough sales and revenue for Junyu.
(Startupgrind.com, 2019)
Result of this whole exercise is given in the following table.
Table: 1
Items to be taken into account, scores, and relative weights
Index of
Performanc
e
Score * Cumulativ
e Score
%
cumulativ
e
Strengths
Score * Cumulativ
e Score
%
cumulativ
e
Strengths
Total
score
Cumulativ
e total
score
Assigne
d by
client
Component Australia Australia Australia United
States
United
States
United
States
For each
of
indicator
s
For all
indicators
Relative
Weights
(ai)
Intellectual
property
protection
80.2 80.2 80.20 80.9 80.9 80.90 100 100 30% ßa1
Financing
SMEs
61.9 142.1 71.05 79.7 160.6 80.30 100 200 25% ßa2
Number of
days to start
a business
98.0 240.1 80.03 94.9 255.5 85.17 100 300 25% ß
a3
Venture
capital
availability
42.5 282.6 70.65 76.7 332.2 83.05 100 400 10% ß
a4
Companies
embracing
disruptive
ideas
51.6 334.2 66.84 77.5 409.7 81.94 100 500 5% ß a5
Soundness
of banks
89.4 423.6 70.60 79.9 489.6 81.60 100 600 5% ßa6

After looking at all the option and analysing data, it will be advisable to Junyu to start her new
creative disruptive business in United States instead of Australia, contrary to advice given by her
friend. United States is friendlier for new business than Australia as per the detail analysis of data
sourced from Global Competitive Index, 2018 and respective percentage weights provided by the
client for all six indicators. Detail analysis formula is discussed in Appendix 1.
Financing SME’s project in United States is much easier than Australia, and also, venture capital
availability in Unites States is far easier than Australia, as per data given by GCI 2018. In terms of
protection for intellectual right Australia and United States placed at 14th and 13th place respectively.
On two counts Australia’s ranking stands well above United States, these are, Number of days to
start business and Soundness of banks, where, Australia stands at 5th and 4th position respectively,
and United States stands at 30th and 18th position respectively. (https://www.weforum.org/reports/the-
global-competitveness-report-2018, 2019) But, these two indicators only count 30% of total weights and
only one of them is significant, that is, number of days to start a business (25%) as per the client’s
relative weights criteria.
Task 2 - in Appendix
Task 3 - in Appendix
Task 4
Index performance and assigned weight for all the six indicators:
Table: 2
Index of Performance of all six indicators the GCR 2018
Index of Performance Score *
Component Australi
a
United States Relative Weights (ai)
Intellectual property protection 80.2 80.9 30% a1
Financing SMEs 61.9 79.7 25% a2
Number of days to start a business 98.0 94.9 25%  a3
Venture capital availability 42.5 76.7 10%  a4
Companies embracing disruptive ideas 51.6 77.5 5%  a5
Soundness of banks 89.4 79.9 5% a6
Source: The Global Competitiveness Report (GCR) 2018
* Scores are on a 0 to 100 scale, where 100 represent the optimal situation or 'frontier'.

3. Conclusion:
Task 5
Taking all the indicators into consideration United States seems to be more business friendly than
Australia and it will be advisable to start business in Unites States. Upon examining the viability of
starting a business in either Australia or United states, first four indicators of given six index of
performance analysed, which comprised 90% of total weights. Analyse result shows that these four
indicators combined strength is aggregated as 70.65% in favour of Australia and 83.05% in favour of
the United States as per weight assigned by the World Competitiveness Index, 2018 and also by
client relative weight criteria.
In terms of venture capital availability United States ranks much higher than Australia. Venture
capitalist generally put their money in probable high growth potential idea or in a small, early-stage,
emerging firms that are deemed to have high growth potential.

4. Appendix:
Task 2
In table 1, for the sake of simplicity, total score of 100 assigned to the each of six (6) indicators, these
six indicators combined strength are marked as 100% by the client’s relative weight criteria. As
depicted in table 1, highest weights is given to the first indicator, i.e. intellectual property right
protection, 30%, whereas, least weights given to last two indicators, i.e. Indicators number the five
and the six, 5%.
Now, it can be seen in the table-1, the score given for each of these indicators, as per the World
Competitive Index report, 2018, published by World Economic Forum. Analysing all the 6 (six)
indicators of table-1, which comprised total 100% of weight to start a business, either in Australia or
United States, it is found that % cumulative index strength, for Australia stand at 70.6%, whereas, for
United States, it is stand at 81.6% as per the Global Competitive Index 2018 (GCI 2018), which is
more than 10% points higher than Australia. If only first 3 indicators are taken together, it is
comprised 80% of weights as assigned by client, for Australia, it is 80.03% and for United States, it
stand at 85.17%, which is 5% higher than Australia. If first four indicators performance analysed as
per GCI 2018, which count for 90% of weights as per client criteria, it is found that Australia’s %
cumulative index stand at 70.65 and for Unites States it is 83.05%, which 12.4% higher than
Australia.
If we further analyse the data in table 1, it is clearly visible that out of six indicators selected by
client, in 3 of these 6 indicators, that is, financing SME’s, venture capital availability and companies
embracing disruptive ideas, United States stands at world number one (1st) position out of 140
countries, whereas, Australia remains at 18th, 35th, and 29th respectively, which is much lower than
United states.
Task 3
Table
Numerical value of the index of performance for Australia and United States
Index of Performance Score * Rank/140
Component Australia United States Australi
a
United States Relative Weights (ai)
for a new business
Intellectual property protection 80.2 80.9 14 13 30% a1
Financing SMEs 61.9 79.7 18 1 25% a2
Number of days to start a business 98.0 94.9 5 30 25%  a3
Venture capital availability 42.5 76.7 35 1 10%  a4
Companies embracing disruptive ideas 51.6 77.5 29 1 5%  a5
Soundness of banks 89.4 79.9 4 18 5% a6
Source: The Global Competitiveness Report 2018
* Scores are on a 0 to 100 scale, where 100 represent the optimal situation or 'frontier'.

References:
The Global Competitiveness Report 2018. (2019). Economy Profiles. [online] Available at:
http://reports.weforum.org/global-competitiveness-report-2018/country-economy-profiles/#economy=AUS
[Accessed 16 Jul. 2019].
The Global Competitiveness Report 2018. (2019). Economy Profiles. [online] Available at:
http://reports.weforum.org/global-competitiveness-report-2018/country-economy-profiles/
#economy=USA [Accessed 16 Jul. 2019].
https://www.weforum.org/reports/the-global-competitveness-report-2018. (2019). The Global Competitiveness
Report 2018. [online] Available at: https://www.weforum.org/reports/the-global-competitveness-report-2018
[Accessed 16 Jul. 2019].
Startupgrind.com. (2019). What Is Disruption, Really? 8 Examples and What to Learn From Them. [online]
Available at: https://www.startupgrind.com/blog/what-is-disruption-really-8-examples-and-what-to-learn-from-
them/ [Accessed 16 Jul. 2019].