Nucleon Inc. Case Study

Nucleon is about to launch Phases I and II clinical trials for their first product CRP-1 (cell regulating protein-1) targeted at treating burns and kidney failure. Both clinical trials would be carried out on a small sample of volunteers lasting 6-12 months for Phase I and 1-2 years for Phase II and Nucleon has to decide how to proceed regarding the production of necessary CRP-1 as they do not have manufacturing facilities to supply it themselves. They could either build a small pilot plant for Phases I&II CRP-1 which requires time and capital investment of 3,2 million USD or consider two other options such as

The barrier to enter Biotechnology industry is high. The first barrier is the extensive requirements in funding coming from heavy expenditures in R&D, along with the risk of little to no returns or even heavy losses if the drug fails to reach the market. Regulatory environment partly contributes to the barrier as the new drug approval process can be time-consuming with relatively 89% of failure to pass through. The second barrier is specialization. Companies with knowledge in obscure diseases will enjoy low threat of new entrant for there are few experts in the field.

Ecton is going to position the company to be acquired but the board of directors and clinical advisors has some concerns about the ramifications of that plan. This paper evaluates Cannon’s Phase III Plan on March 1998. Cannon proposed a path for the next year containing five major points (Edward, 1999, 8 and 9). The bottom line of this proposal is positioning Ecton to be acquired by the end of the 1998. One of the crucial concerns of this acquisition is the possible effects on “Ecton’s product development process”. Another concern Cannon holds is the ability of Ecton to penetrate a very harsh market fills with big, established, and advanced manufacturers. Also, Cannon is not sure on how to approach specific market

There are multiple health concerns worldwide and more and more drugs are needed every day. Many drugs however, are extremely expensive to develop, test, and produce. According to the Tufts Center for the Study of Drug Development (2002), it costs up to $802 million to bring a new drug to the market. In 2002, pharmaceutical companies spent $34 billion in research and development (Center-Watch, 2003). In addition to the costs, the overall time from the discovery to approve and market the drug can take up to 15 years.

Keep using the old machine incurs higher cost(higher EAA) than replacing it with the new one. Therefore assuming sales are equal for both cases, when sales is smaller than 328338.07 and greater than 434036.67, Fonderia di Torino S.p.A should definitely replace the old machine with the new automated machine.

According to our analysis, So , c) is a betterthe optimal choice whichchoice, which confirmed our aggressive machine buying strategy since Day 135. And on Day 149, and Day 170, we immediately bought machine for station 2 and 1 again when the stationsit becomes bottle neck or when lead time is more than 0.28 which caused revenue decreased to $1,200.

Nuware Inc. is being analyzed in this situation because a large institutional client of the research firm Wyburn Malone is looking to enter an equity position in Nuware Inc. In making their decision, Wyburn Malone has been asked to restate the statements of Nuware Inc. Due to the apparent earnings growth displayed by the company, even in a period of difficult business, Nuware has become a strong investment opportunity. As with all Wyburn Malone’s research projects, the focus of this analysis centres on determining whether Nuware management has utilized over aggressive or too conservative accounting practices, resulting in earnings that are not real in nature.

Nucor has been facing many industry challenges including the overall development of the industry. They are competing with foreign firms on cost and efficiency. Nucor has a low cost strategy because as they say their product is not necessarily very attractive. It does not have attractive or unique selling features other than its cost. The commodity of steel is in a very competitive market. Nucor understands that innovation and productivity are going to be key factors to keep their buyers satisfied with their prices. Nucor is facing many challenges with a growing world market and many of their competitors merging in order to create stronger more dominate

We believe that they should expand. Nucor is self-reliant and has a good strategy which made the company the second largest producer in the US. They should expand to global market to be able to increase their market share. They can go to markets such as Russia, China or Brazil, since they are dumping into the US market. However they should evaluate the Porter five forces before making any decisions since these markets are really competitive.

Nucleon, Inc. needs to determine the best course of action for the manufacturing and sale of its first product, CRP-1, in order to grow the budding company and gain sustained competitive advantage against large rivals. [vi]

The threat level is still low because the first trial of bioresorbable failed and the second generation has not yet fully convinced surgeons. But most doctors seem open to the idea or already use some of the bioresorbable derivatives to substitute some of Synthes` products today. The difference from the first generation bioresorbable products to the second one improved drastically and the third generation could eventually be almost as effective as today’s solutions. If Synthes is not fully prepared there could be a very big threat to the company not only in sales but also reputation because they are known for being the top dog and always offering the newest products for internal fixation. A company with a similar strategy (affiliation to AO, good sales reps, high quality product) could not only imitate but also substitute if the product part were to be able to be effective and accepted by doctors. Although there are threats in a competitive industry such as this one, we believe that Synthes has enough actual and probable competitive advantages to sustain throughout time as a leader in the internal fixation industry. When we discuss the S-Curve for Synthes, we could see that bioresorbable technology is slow and improving poorly because it is not understood quite well. If anybody gets it right we could see the acceleration process and this is where Synthes would be highly

Also, Nucleon is mainly a R&D firm and lacks core competencies and capabilities to support large scale manufacturing. As discussed earlier, the changes in organization required to pursue large scale manufacturing for the first time with no significant skill sets, manufacturing know-how and experience can pose a very high risk and detrimental impact on Nucleon’s long term success. Licensing with a proven partner will be a low risk and safe strategy in short term.

Another recommendation that I have for Nucor is instead of buying existing plant capacity, make new plants elsewhere or form a joint venture with a supplier to help save money. (Exhibit 3) This would decrease cost of supplies so they would have the extra money to build elsewhere or build a ne plant. By using the SWOT analysis (Exhibit 1) it let me break up Nucor into different parts to see what their strengths and weaknesses are. Nucor is solid with technology and treating the employees correct but the weaknesses that affect Nucor are more market based with some internal problems. Nucor has products for many different industries including automotive and housing. This can cause issues for Nucor if those industries take a fall, which they have over the last 5 years. It’s a good idea to be in these industries but Nucor has to realize what can happen to sales and revenues when one or both of those industries take a fall. Nucor has been expanding more in the United States, recently just building a plant in Louisiana (Exhibit 5). This plant will be a 750 million dollar purchase and will be a mill for pig iron. Nucor is expanding all over the United States but needs more presence internationally plan and simple. Nucor is a solid company with shareholder equity increasing each year; they have a solid stock in the NASDAQ market and continue to be a healthy steel company. They can and will

Nucor is a classic case in how a firm can develop sustainable competitive advantages through resources that fit the VRIO criteria. It is worth noting that Nucor has achieved this in an industry that few would describe as attractive.

Nucor must now consider the need to keep up with the changing dynamics of a globalized corporate world. Nucor already has a business model that proved to be successful in the American markets. Using the same business model, Nucor should now consider penetrating and exploiting other international markets that promise low costs of production and higher revenue generation such as India and China. This could be done by either setting up operations in those countries or getting into