Business Development Strategies for a Novel Formula

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Junyu Lee Needs Your Advice
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Executive Summary
This report will help to understand the details relating to the new formula created by Junyu Lee
who has completed the Ph.D. in biology. This report will indicate the idea of Junyu and the ways
in which it can patent such an idea. Economies and market of the two countries namely United
States and Australia would be analyzed to get an overview relating to better business in either of
the two countries. For such analysis, the index of performance would be computed and analyzed
to choose the better prospective market for patenting the product which would generate major
revenue from such a product. This report will help in the development of the business of Junyu
and to achieve sustainable success in the market in the long run.
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Table of Contents
Introduction......................................................................................................................................4
Analytical Development..................................................................................................................5
Conclusion.......................................................................................................................................9
Appendix........................................................................................................................................10
References......................................................................................................................................11
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Introduction
Junyu Lee who has completed her Ph.D. in biology have researched and created the new formula
which focuses on activate the mental energy in humans. This would help in removing tiredness
the following day if in previous day individual has slept for just four hours. The idea developed
by Junyu Lee is a disruptive one as it would dislocate the whole system of the body. This will
also disrupt the normal functioning of the body which could cause a problem in the later stages
and could have various side effects. This development is considered to be an example of creative
destruction as the same would change the overall system of the body and give rise to new
development in the human body which could be favorable or unfavorable. Also, it is not sure
whether such a drug would be adapted by humans and would hit the markets in a productive
way. Analysis of the two prospective markets and economies would be made in this report which
states the feasibility of such a product and its success in the market using various techniques.
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Analytical Development
Junyu has to identify the prospective market which would help in the development and
implementation of the idea given by Junyu. The United States and Australia are considered as the
prospective market as a patent of the innovation is available in both these countries and there is a
market in both these countries for such type of idea. The idea of Junyu is to develop such an idea
and make a huge amount of money from the same. There is a problem that arises in the
implementation of the plan in relating to the money required for development and
commercializing the new drug. Junyu has to spend a lot of money to patent the product as the
product is not tested and it has to go through certain clinical tests that are very costly and
requires a lot of investment to be made by Junyu. There is a shortage of funds for Junyu and it
needs to arrange such funds to pass the costly tests. For the arrangement of funds, Junyu has
approached banks of both the countries but banks are slightly hesitative is providing such funds
as the idea seems to be disruptive and might not get adopted in the industry of the countries
(Uddin, et. al., 2019). However, if Junyu convinces about the advantages of the ideas and
provides an appropriate guarantee then banks might be able to provide funds at a high-interest
rate. It should be noted that Junyu is not concerned about the high-interest rate and is willing to
procure the funds at a high-interest rate as the arrangement of funds is of utmost importance for
Junyu. Also, Junyu can approach venture capitalists to inform about the idea and invest funds in
the implementation of the idea. Junyu is planning to approach venture capitalists in Australia as
financing SMEs is relatively abundant in Australia. Analysis based on various factors has been
done by Junyu and importance of each item has been indicated as below:
 Intellectual property rights protection: It is an important concept while implementing
the new idea and patenting the same. It states that whether proper protection is being
provided for the invention created by way of patents, trademark, etc. and no misuse of
such invention is taken by other people through unauthorized access.
 Financing SME’s: It relates to the providing of finance and funding to the small and
medium enterprises for meeting the requirements of capital development in the market
(Carbo‐Valverde, 2016). Financing should be taken in the country from that organization
which provides low-interest rates.
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 Number of days to start a business: This indicator states the number of days in which
business can be started in a particular country. It is beneficial for the company if the
business starts as soon as possible. It will give more time to the business to develop and
establish a place in the market.
 Venture Capital Availability: This indicator gives an overview of the availability of
venture capitalist finance in the country. It is favorable for the development of business if
venture capital finance is easily available in the country thus the country with more
venture capitalist should be selected (Ballinger, et. al., 2016).
 Companies embracing disruptive ideas: This indicator gives an overview of the
companies which are embracing several disruptive ideas. The country has more such
companies is better to set up the industry as such countries promote disruptive ideas and
provide assistance to companies having such disruptive ideas.
 The soundness of bank: If the funds are procured by the banks then this indicator plays a
major role as it is important that the country in which funds are procured by the company
is having the stable economic system and the banks are having a stable business. Also,
the soundness of the bank financial system would avoid fluctuating interest rates which is
beneficial for the business.
The following table shows the above indicators, its score, and relative weights which help in
deciding the country where the business should be set up by Junyu.
Serial
Numbe
r Indicators
Weight
s
Score
US
Weighted
Average
Score US
Score
Australi
a
Weighted
Average
Score of
Australia
1
Intellectual property
right protection 30% 5.8 1.74 5.8 1.74
2 Financing SMEs 25% 5.9 1.475 5.1 1.275
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3
Number of days to
start a business 25% 5.6 1.4 2.5 0.625
4
Venture capital
availability 10% 5.2 0.52 3.4 0.34
5
Companies
embracing disruptive
ideas 5% 6 0.3 5.1 0.255
6 Soundness of banks 5% 5.7 0.285 6.5 0.325
Total 100% 34.2 5.72 28.4 4.56
The above table shows the scores, weights and the weighted average score of the certain
indicators derived from the global competitiveness report 2017 for the United States and
Australia (Schwab, 2018). It can be seen from the above analysis that the weighted average
score of the US comes to 5.72 whereas the weighted average score of Australia comes to
4.56. These key indicators are the main basis on which the decision for setting up the
business would be based. It can thus be seen that from the following indicators and scores it
is beneficial to set up the business in the United States. The overall score of performance
computed after the weighted average score is known as the index of performance. The
following table shows the summarized index of the performance of the two countries (See
Appendix for calculation).
Australia United States
Index of performance -0.43 0.73
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Index of performance can be defined as the measure which computes the movement of
performance. Index of performance is computed by translating certain measures and factors
important for the certain industry into scores and then computing the weighted average of
those scores of the basis of weights (Arvis, et. al., 2016). Weights to the measures are
provided based on its importance each factor has in decision making for measuring
performance. It can be seen from the above table that the decision is made based on the index
of performance and it states that business should be set up in a country where such a score is
more.
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Conclusion
Thus to conclude it can be said that it is better to set up the business and implement the idea
of Junyu in the United States as the index of performance shows a better score for the United
States in comparison to Australia. There was a misunderstanding relating to the venture
capital availability which states that there would be more venture capitalist available in
Australia in comparison to the United States. Also, there was a misunderstanding relating to
financing SME's which states financing SME's would be more abundant in Australia which is
not the fact as computed from the details in the report. It can be seen from the table that the
score for Financing SMEs in the United States is 5.9 in comparison to 5.1 in Australia thus it
is beneficial to choose the US in case of SME finance from the United States. Thus to overall
conclude it can be said that the idea is disruptive and can be initiated further by Junyu in the
United States but there will be several barriers in implementing the same and proper analysis
should be made before taking any step in the development of business.
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Appendix
Formula for the index of performance = [(Final Score-Minimal Possible Score)/
(Theoretical Maximal-Minimal Score)]*100
It should be noted that all the index performance has been computed using the above formula for
each measure and overall final score. The score for index performance for all the six measures is
computed using the above formula and the final score is computed by dividing the scores based
on weights provided in the table above.
Index of performance for United States = [(5.72-4.99)/ (100-0)]*100 = 0.73
Index of performance of Australia = [(4.56-4.99)/(100-0)]*100 = -0.43
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References
 Arvis, J.F., Saslavsky, D., Ojala, L., Shepherd, B., Busch, C., Raj, A. and Naula, T.,
2016. Connecting to Compete 2016: Trade Logistics in the Global Economy--The
Logistics Performance Index and Its Indicators. World Bank.
 Ballinger, T.P., Habegger, W., Jones, C.T. and Thompson, M.A., 2016. Convergence
in venture capital investments: evidence from a panel of 18 US regions. Journal of
Regional Analysis and Policy, 46(1100-2017-1678), pp.132-137.
 Carbo‐Valverde, S., Rodriguez‐Fernandez, F. and Udell, G.F., 2016. Trade credit, the
financial crisis, and SME access to finance. Journal of Money, Credit and
Banking, 48(1), pp.113-143.
 Schwab, K., 2018. [online] Www3.weforum.org. Available at:
http://www3.weforum.org/docs/GCR2018/05FullReport/TheGlobalCompetitivenessR
eport2018.pdf [Accessed 20 Jul. 2019].
 Uddin Tapadar, M.I., Dey, N.B. and Adhikari, K., 2019. Factors Affecting
Procurement of Finance from Short-term Sources by MSEs in Barak Valley,
Assam. SEDME (Small Enterprises Development, Management & Extension
Journal), 46(1), pp.2-7.
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