Page 19 - CIMA SCS Workbook November 2018 - Day 2 Suggested Solutions

CIMA NOVEMBER 2018 – STRATEGIC CASE STUDY

They will most likely want to hire some further staff with experience in this industry to assist. This
may not be necessary if Novak goes down the acquisition route, as we could make sure we retain
the services of key directors to oversee the integration.

Research

Before going any further with any of these suggestions, the next step and a key control would be
some further research into this industry. The number of regulatory bodies and the severity of the
regulations, including things like time to regulatory approval. Novak should also investigate
further the likely costings for both active ingredients and excipient ingredients. Finally more
research should be done into the sales market for this as it would be significantly different to our
current government funded sales and likely to be insurers or pet owners who are making the
decision about what price they are willing to pay, so margins could well be very healthy.

Conclusion

As you rightly say, this does seem an interesting business opportunity, but the Board must
carefully consider the need to balance the benefits you passionately believe in with the numerous
risks and the need to make sure we don’t put all our focus on one risky venture.

80 KAPLAN PUBLISHING