MBA501: Disruptive Innovation - Millennium Health Sciences Case Study

This case study delves into Millennium Health Sciences (MHS), a company established in 1968, focusing on its approach to disruptive innovation. With two main business units, Neutrino (vitamins and supplements) and Dermatech (dermatological cosmetics), MHS relies heavily on innovation, particularly through its main product, Poseidon. The analysis covers internal perspectives, highlighting a top-down management structure and the impact of senior management. It also examines external factors, such as economic conditions and market trends in dermatology. The marketing perspective explores the segregation of business units and the technical expertise of the marketing team. The technology perspective assesses the effectiveness of high R&D investment. Recommendations include improving communication, encouraging feedback, staying updated with external operations, hiring marketing experts, and leveraging technology to engage customers. The case concludes that while MHS has strengths in dermatology and R&D, it needs to address its organizational culture and technological engagement to remain competitive.

Disruptive
Innovation
Millennium Health Sciences

Introduction
• Company background
• Business units
• Main product
• Organisational Culture
• Qualifications and Eligibility
• Operational edge
• Internal perspective
• External perspective
• Marketing perspective
• Technology perspective
• Recommendations
• Conclusion

Company background
• Millennium Health Sciences was established in 1968.
• Main products: Skin care
• Main motive: Innovation
• 800 staff
• R & D unit in Adelaide
• Annual revenue: $2.2 billion

Business Units
• Mainly two units
• Neutrino: Produces vitamins and supplements
• Dermatech: Dermatological cosmetics
• Dermatech is the oldest unit
• Responsible for exports
• 30% profit comes from Dermatech
• 20% Revenue alone comes from the latter

Main Product
• Poseidon is the main product
• Made with top secret ingredients
• Made with help of Neutrino R & D.
• Skin cream based product
• Expected to generate revenue of $350 million in 2023.
• $8 millions: Initial spending on R & D.

Organisational Culture
• Not easy to sink in.
• Existence of hierarchy
• Unavailability of free communication
• Tough for new employees
• Feedback not appreciated

Qualifications and eleigibilty
• Degree in pharmacology
• Degree in microbiology
• Promotion through experience
• 60-70 % staff have degree in the same
• Includes marketing and sales teams
• Assumed to give the company an edge

Operational Edge
• Through innovation
• Innovation possible as a result of R & D.
• Having expertise in pharmacology and microbiology
• Thus, all departments have detailed knowledge about
business and operations.
• Helps marketing department in research.

Internal Perspective
• Top down management structure
• The senior management team is aged around 53.
• Each business unit headed by a general Manager
• 800 staff in total.
• General managers report to the board of directors.
• Executive committee is known to refer to the latter as the
senior citizens club

External Perspective
• Low returns during recession
• Favourable share of profit divided among shareholders
• The company was regarded as an unfavourable employer
• Rising needs for dermatology based products.
• Rising number of skin care products, clinics and spas.

Marketing perspective
• Segregation of units can be deemed to be a marketing
strategy.
• The marketing and sales executives were from
pharmacology and microbiology backgrounds.
• Thus, high knowledge about business, products and
operations.
• Research carried out by marketing department
• Presented in monthly marketing meetings

Technology perspective
• High investment in R & D.
• However, resulted in high costs
• Deemed to be ineffective
• Identification of technological perspective would help in
catering to the needs of research.
• Lack of engagement of the company with use of
technology.

Recommendations
• Incorporate communication network
• Encourage feedback
• Staying up to date with external operations
• Identification of the moves of the competitors.
• Hiring individuals with marketing expertise
• Use of technology to attract customers.

Conclusion
• Dermatology and skin care products offered
• Neutrino and Dermatech are the main business units
• Poseidon is the main range of products.
• High investment in R & D.
• All individuals must have relevant expertise
• Unfavorable culture must be rectified
• Technology must be used to engage customers.