The case study about a given hypothetical case. The Case sets the stage and presents different strategies for the company to consider. You will select one of the strategic options in the case, justify the chosen strategy, and discuss its advantages and disadvantages

Introduction

Ten years ago, you established a privately owned small company called Shefa’a, which makes highly effective and potent prescription herbal painkillers. All Shefa’a products are licensed in its operating markets and protected by US patent laws. Since its launch, the company has enjoyed good success and created a strong customer base around the world, particularly in the GCC Region.  Shefa’a has 50 dedicated scientists and employees, most of them have been with the company since launch. Each Shefa’a employee has been loyal and dedicated to you and the company’s values, product focus, and corporate strategy. The company’s strategy has been based on Porter’s Generic Strategy of “differentiation focus”. When you established Shefa’a, you have made a philanthropic pledge that if you ever discover a cure for a chronic disease, then it will be made available to everyone who needs it regardless of their economic situation. The company has a small and dedicated board that has supported you since the start, but has grown sceptical over the past few years about company’s finances and the new products Shefa’a has been pursuing.

Herball

Two years ago, you and the Chief Chemist observed something unusual with one of the new painkiller called “herball”. During clinical trials, herball shrunk one type of cancer of a lab rat by 75%.  Having made this amazing discovery, you allocated more resources to refine the new drug and make it more effective to target organ cancers. The shift in resource allocation has been devastating to the main product line. As a result, your company is almost bankrupt. You have spent all your savings and the company is in debt almost 10 million Dirhams. There is a lot of resentment among some of the employees and board of directors about the new drug and the direction you have led the company.

Last month, you have made a breakthrough.  Results on lab rats showed that the drug is working, it completely cured the liver cancer of one of the lab rats. Now, you are ready to try it on human subjects. A major hospital in the US heard about the breakthrough and has contacted you and wants to sign with you to begin the human trials. Simultaneously, some major pharmaceutical companies are contacting you and are willing to buy the technology from you. If the human trials work, this would be a disruptive drug that is going to shake the industry.

Yesterday, your business development director secured a letter of intent from a group of investors who are willing to finance the project. They have pledged $2 Billion as an initial investment for a majority stake in the company.

All of this happened so fast. There is a lot of pressure on you to make a decision about what route the company should take. The situation is further complicated by your desire to fulfil your philanthropic pledge you have made.  However, this represents a once in a lifetime opportunity to financially benefit from your invention, pay your debts, and continue with your research to cure other chronic diseases, such as Diabetes, Alzheimer’s, and AIDS.

Strategy

You must make a decision about what kind of strategy your company is going to pursue. Outline your strategy for Shefa’a and Herball . Your options are:

1) Cash Out: sell the technology to one of the big pharmaceutical companies

2) Begin Human Testing: sign up with the American hospital for human trials

3) Equity Investment: sign up with the investors

4) Philanthropy: Make Herball free to some or all

5) Any combination from the above

Whatever strategy you choose, you need to give a strong rational and convince your employees and the board of directors that it is the correct choice for the company. Your Report must be written in 1,500 words.

You must choose one of the above strategies and give a strong justification for the chosen strategy. The justification must include the advantages and disadvantages and any potential risk for the company. In addition and irrespective of the option chosen, you must outline the argument to convince the board and employees. The format of your report must be as follows:

-Introduction and summary

-Selection of one of the five strategies

-Justification for the strategy selected, advantages, disadvantages, potential risks, etc.

-Outline of the argument to convince the board members and employees of Shefa’a