But perhaps most importantly, a critical analysis of a business plan can and will help the entrepreneur to assess whether or not an idea under its current platform is worth undertaking, or if it is back to the drawing board they go. The purpose of this memo is to assess the business plan of Private Concepts, a company hoping to bring to market The Pevlon, a cervical cancer screening device made for private, in-home use. The opportunity for such a device absolutely exists both here in the United States and abroad.
For one, the plan mentions The Breast and Cervical Cancer Mortality Act of 1990 which, “mandated a nationwide program to increase access of medically underserved women to comprehensive breast and cervical cancer screening services,” and when coupled with the Patient Protection and Affordable Care Act that was recently passed, the amount of free (to consumer; paid for by the government) access to this product creates potential for a high demand in this country.
In foreign countries however, such as rural China and even Africa, where access to healthcare and proper healthcare facilities can be extremely rare, the appetite for this type of product could be tremendously significant. And there lies the first issue with this business plan. According to the Lancet Oncology medical journal, Volume 11, Issue 12, “75,000 women develop cervical cancer and 40,000 women die from the disease in China each year. ” Those numbers in the United States are only about 12,000 and close to 4,000 respectively (cdc. ov).
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This exemplifies a larger need for this product abroad as opposed to right here in the states. And to focus on the opportunity in China, a Wall Street Journal publication explains how China’s healthcare system is lacking in general, but puts a microscope on the disparity in quality healthcare between rural and urban areas (Burkitt, 2012).
These rural areas in China represent a large opportunity (much larger than any market in the United States) for The Pevlon.
And so although the opportunity does exist for the business plan’s product, it is evident that the opportunity accentuated in the business plan is not the optimal one (aside from appealing to non-profits or other entities that would utilize the Pevlon in charitable, undoubtedly foreign ventures – this should have been a more significant portion of the plan).
Additionally, the opportunity in the United States has not necessarily been proven to the point where one could consider the need for the product as pervasive enough to where the consumer is willing to pay for it.
And pay for they would have to, because as the plan notes in the chart on page 10, a Pevlon screen costs 50% more than a typical pap smear. This exemplifies that pricing is going to be an issue. The health care market is highly dependent on the insurance industry, especially when there are product substitutes. Take pharmaceuticals for example. In group health care, policies are dictated by the contract that is in place and the majority of these contracts will sway the policy holder to utilize generic medications.
This is done by the insurance carrier covering a larger percentage of generic medications than name brand ones, which ultimately costs the carrier less. So if a pap smear is less costly by 50% than a Pevlon test, carriers may still cover the device, but the “incentive” to utilize the cheaper procedure will absolutely be in place. Additionally, the business plan identifies lower income women as a target market, but fails to explain how a more expensive procedure will be a viable option for this segment group. But even when the entire U. S. arket (via a sample size) is observed on page 19 of the plan, less than half of the women surveyed (46%) stated they would utilize the in-home Pevlon test even if most or all of it was covered by insurance. And if insurance reimbursement is removed completely, only 11. 2% of women would purchase the product. It would be interesting to see if there were follow up inquiries related to this line of questioning because a hypothesis is that some women, or maybe even a lot of women, may not trust themselves to complete such an important test at home.
The Essay on Explain how external and internal influences may impact on business opportunities in Australia
Purpose: Explaining how external and internal influences may impact on opportunities businesses have in Australia. Introduction: External influences such as Financial, geographic, social, economic and competitive situation are all influences that impact business opportunities in Australia. Internal influences such as products, locations, resources and management are also factors that contribute to ...
These women may simply prefer to rely on the expertise of a medical professional. And along these same lines, I feel as though the plan is silent on a very important aspect when it comes to assessing the true market of this product: how many women are in fact uncomfortable with going to a physician’s office to have a pap smear completed and would those women be more comfortable completing such a screen at home?
Yes, there is a quote stating how uncomfortable the procedure is (which is in fact the first thing the reader sees underneath the Executive Summary heading), but it is somewhat suspect that this quote is anonymous and that there is no quantifiable evidence proving this notion to be true. So what is the actual desirability of this product? There really is no proof of it within the business plan and if I was investing in this product, I would need this “proof. ” Aside from the ambiguous desirability of the product, there are a number of other concerns that should really stick out to the potential investor.
On page 12 of the business plan there is a section that lays out the testing and approval stage for the Pevlon device. There are 6 steps in this section and only 1 of which have been completed, which happens to be the least significant of steps. The remaining rigmarole of securing FDA approval, obtaining the green light to conduct clinical studies, actually conducting these studies, etc. could easily take upwards of a decade to complete. From the perspective of an investor or a bank assessing a loan, this is entirely too long a process for someone to simply START making their money back.
The Ansoff product-market matrix helps to understand and assess marketing or business development strategy. Any business, or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is one simple way of looking at strategic development options: Each of these strategic options holds different opportunities and downsides for different organizations, so ...
This exemplifies how difficult a market healthcare can be to get into, and that the barriers involved are simply too high. Additionally, the Pevlon is not necessarily a onetime revenue generator, but it comes uncomfortably close. In 2009, the American College of Obstetricians and Gynecologists (ACOG) released new cancer screening guidelines. According to ACOG, women now need to begin screening at age 21 as opposed to 18, and women ages 21 to 30 only need to be screened once every two years; women 30 and older only once every 3 years (Cox, 2009).
The final qualms that I have concerning this business plan is the window of opportunity associated with the product, and the amount of time it will take for Private Concepts to become a profitable company. There does not appear to be an actual window of opportunity as the business plan does not thoroughly prove the market segment. Anecdotally I polled a number of women in my life with whom I am comfortable bringing this subject up and all of them (4) took the opinion that their screenings are not a major source of stress or discomfort, but rather they have come to accept it as “part of the routine of life. And in regards to becoming a profit generating entity, right up front on page 3 of the business plan, it is shown in the chart that Private Concepts would not be in the black until 5 years of doing business. What’s most concerning is that 5 years is still merely a hypothesis and that the organization is seeking over three million dollars in funding basically right out of the gate. Conceptually, the idea of a self administered, in home cervical cancer screening is a good idea.
It poses benefits such as convenience and avoiding uncomfortable screenings at a physician’s office. Private Concepts missed the mark in their business plan however, in a number of ways. The market was identified too ambiguously and the plan did not clearly exemplify certain key aspects of said market such as how many women actually would prefer an in home screen versus one performed in a physician’s office. Where to market and focus sales efforts was clearly stated, however, the idea to sell first in the United States is not the best possible plan of action.
Table of Contents Purpose Statement 1 Executive Summary 2 Business Information 3 Personal Financial Statement 3 Business Description 3 Business History 4 Personnel and Organization 5 Marketing Information 6 Market Analysis 6 Market Research 6 Competitors 7 Market Segments 8 Target Market 8 Marketing Mix Strategy 9 Products/Services 9 Promotions 9 Distribution 9 Pricing 10 Suppliers 10 Marketing ...
Private Concepts should as the plan mentions, manufacture the product off shore in order to maximize profit margins, but at the same time the pricing point should be rethought considerably in order to capitalize on the more fruitful markets of places like rural China and Africa. Appealing to non-profits and government entities that might focus on these foreign demographics was a small piece of the business plan, but it should have been more of a focus.
Finally, in this assessment I had the advantage of hind sight and context. This business plan won the Moot Corp competition in 2002 with what appeared to be a viable business plan at the time. This product has yet to come to market and I was unable to find anything stating that the Pevlon has been approved by the FDA. This does not necessarily hold any bearing on this analysis of the business plan; however, it does prove to a certain extent, a lot of the shortcomings that were found within this business plan.
Academically and structurally the plan was very well done, however in practical application it is easy to see how and why the Pevlon is still an unknown product to virtually the entirety of the woman population in the United States. Arbyn, Marc. HPV-Based Cervical Cancer Screening in China. The Lancet Oncology. 2010;11(12):1112 – 1113. Burkitt, Laurie. Report: China’s Healthcare System Deeply Sick. The Wall Street Journal. http://blogs. wsj. com/chinarealtime/2012/08/29/report-chinas-health-care-system-deeply-sick. 9 August 2012. Date Accessed: 23 January 2013. Cervical Cancer Statistics. Centers for Disease Control and Prevention: Gynecologic Cancers. http://www. cdc. gov/cancer/cervical/statistics. 20 December 2012. Date Accessed: 23 January 2013. Cox, Lauren & Dr. Joshua Hundert. New Cervical Cancer Screening Guidelines: No More ‘Annual’ Pap Smears. ABC, Good Morning America. http://abcnews. go. com/GMA/OnCall/guidelines-ditch-annual-pap-smears/story? id=9131632. 20 November 2009. Date Accessed: 23 January 2013.