Page 17 - CIMA SCS Workbook November 2018 - Day 2 Suggested Solutions

CIMA NOVEMBER 2018 – STRATEGIC CASE STUDY

EXERCISE 3

Email

To: Dirk Lepain
From: Senior Manager
Subject: Veterinary Medication

Risks

Time to fruition

As with human medicine, the amount of time to research and develop a safe and successful
product that gets regulatory approval will be significant. Given the declining share price for the
last three years and recent fall in revenue and profits, if this venture is aimed at turning a quick fix
to the share price and revenue decline it is unlikely to have the impact Novak is hoping for. A lot
of work would be required to even consider entering the market.

Brand

Novak is a trusted brand in human medication but this doesn’t necessarily translate to the animal
world. Indeed, it could lead to brand confusion, and people may accidentally buy/use dog
medicine and vice versa which could have quite damaging effects on either species. This sort of
incident would not lead to the sort of publicity Novak would want and it would be unlikely to help
improve the share price of Novak.

Knowledge

Novak does not currently have any skills or experience in the area of veterinary medication. While
it appears to be undeniably attractive given the price people are willing to pay for – what is
essentially a guilt-easing purchase – a pair of prosthetic testicles, we do not currently have the
ability to take advantage of that. To build up that knowledge will also take time, so coupled with
the time to regulatory approval it is a long time before we would be likely to see any positive
impact on performance from such a venture.

Staffing

Following on from the issue of a lack of knowledge, there is no guarantee that the current staff
would be willing or able to start working on such a venture. While it could be argued that our
mission is open enough to incorporate pets as being part of society, this may be a step too far for
some of our staff and they may be uncomfortable with retraining or researching into this area.
This would lead to a major staff recruitment process.

Regulation

There is undoubtedly significant regulation to look into, understand and then adhere to. The
article certainly does suggest that veterinary medication is big business with different varieties of
medication mentioned, but also the talk of human and pet lines becoming blurred it would be
incredibly surprising if the regulations were the same. It is unlikely that regulations would be any

78 KAPLAN PUBLISHING