Identification of the IP, Management and Commercialization - Assignment Example

Name Tutor Course Date Identification of the IP The provision of private health care has in the recent past become a big business not only in the US but also in other developed countries of the world. This is majorly due to the inefficiencies of the National Health System. Consequently the provision of private health care has experienced an influx of small entrepreneurs and also major providers of private health care who have seen an opportunity to expand their operations. The influx of private health care providers has subsequently led to cut throat competition among the various providers. Survival for the private health care provider in this hostile environment calls for innovative strategies and provision of services which set the providers services apart from the competition. Private health care has often been criticized for being bloated inefficient and inequitable; catering for the upper echelons of society and designed essentially to benefit the private health insurance corporations. Money transfer and remittance market is regularly looking for new developments to make it possible for corporate and consumers to transfer money faster, more securely and more effectively across continents and countries. The exponential development of mobile phone technology has made companies develop an interest in this new idea which is seen as a potential avenue which can be used not only to transfer money to relatives and friends but also to transact business especially in payments. The facility to make remittances from one mobile phone to another is a high growth potential industry and is bound to grow exponentially in the coming years. Sacred Health Care Providers (SCHP) has focused on this to maintain competitive advantage in the market. Small amounts will be sent securely and quickly to either bank accounts or through home delivery and pick up points making it easier to get access to remittances for both sides of the remittance market. People are becoming busier in their lives and hence prefer to manage finances, shop and make payments online or by phone. This is the reason for the high growth of mobile commerce and Internet particularly in North America and Europe. Behaviors and attitudes are changing among all people. For the providers of private health care, it would be foolhardy not to take advantage of these new technological advancements in order to cut a niche for themselves in the business world. The mobile money transfer remittances system provides an interesting avenue through which private health care providers can expand their business and gain a foothold. This is because of the variety of conveniences provided by mobile money transfer which would go a long way in making it easier for clients to transact business with the health care provider. Management and Commercialization The IP being a concrete representation of creativity and intellect, it is important for our health care provider (Sacred Health Care Center) to ensure that it is not stolen or used by competitors. In order to ensure this, there needs to be proper management commercialization of the new IP. The IP will be branded MyIP. The commercialization and management of Intellectual property is the taking of an invention and transferring it to the society in a suitable way while ensuring that all stakeholders benefit. The invention of the new IP requires that Sacred health care provider decides on whether to file a patent or not. She must also decide on the commercialization strategy that is to be applied in the commercialization and management. These activities are just outlines and have a myriad of sub activities involved. The management and commercialization of the IP is important for Sacred Health Care Providers as it enables her to protect her invention from competitors and it also provides a guideline on the proper implementation of the IP. The use of mobile money transfer by Sacred Health Care Providers involves collaboration with multiple industry partners and institutions i.e. the mobile telephony services providers and the government. In order to maintain its competitive edge and ensure commercialization, SHCP will obtain an exclusive license for the IP. She may also opt to obtain an exclusive license for a certain period in order to get market share and then eventually make the license less exclusive by charging royalties on the invention to firms which operate outside her sphere of influence. The exclusion of multiple partners would have been preferred so as to better commercialization of the invention. In this case however, it is necessary to include these partners and institutions due to the nature of the service which requires partnership with monetary services providers such as credit card companies and is also subject to government regulation. The SHCP also intends to partner with research companies in order to offer continuous research for the IP. She reserves the right to a research use license for resultant inventions in the ultimate negotiated commercialization license. In the event of the service provider intending to use the IP for the profit of third parties for commercial intents, the provider will consult collaborating partners. Context of the IP Private health care has many a time been criticized for being inefficient, inequitable, expensive, full of externalities, and bureaucratic. Private health care has however continued to experience unparalleled growth in recent years. This can partly be attributed to the efforts made by private health care givers to improve client welfare through several interventions such as the reduction of bureaucracies through more personalized service, reduction of charges by reducing internal inefficiencies, and an attempt to create mass appeal through offering of services to cater for the less privileged members of the society. SCHP has not been left behind in this. The improvement in Sacred Health Care Providers and other private health care services has consequently resulted to huge demand for private health care. This has ultimately led to increasing competition for customers in the provision of private health care. The advent of mobile phone technology meant that a new platform for innovation. Background E-money is the electronic alternative to cash. It is the money value stored electronically on the receipt of funds and is used for making transaction payments. E-money can be on devices, a card or a server. Examples may include electronic purses like a master card, M-PESA in Kenya or Internet based services like Moneybookers. E-money can therefore serve as an umbrella term for a variety of specific electronic value services and products. Mobile financial services refer to a wide range of financial services which are offered through the mobile phone. Mobile money transfer is a service whereby clients use their mobile appliances to receive and send monetary value. Mobile payments on the other hand, refer to the situation whereby the mobile phone is used to make person to commercial payments. Mobile bill payments necessitate interconnection with the bank of the receiving business and therefore are taken as part of mobile banking. Mobile banking involves the connection between a private or business bank account and a mobile phone. It allows clients to use their phones as a channel for banking services such as account transfer, deposits, balance inquiry, deposits and bill payments. Mobile banking is the most important for improving the provision of health care and gaining a competitive advantage over competitors. Research into the field of private health care has shown that efficiency, convenience, and costs are the most significant factors which influence client choice of a health care provider. Currently private health care is perceived by many as bloated, inefficient, inconvenient, and a preserve of the wealthy who can afford its high costs. In order to change these perceptions, it was necessary to find innovative ideas which had not been tried before in the medical field. Mobile banking technology could not have come at a better time. The aforementioned services made available by mobile banking made it a valuable tool for Sacred Health Care Providers in the quest of tackling these constrains. Through the use of the phone, the SHCP is able to increase convenience for clients as well as reduce operational costs involved with handling cash. This would enable her to compete with governmental health providers which are considered more convenient and efficient due to their use of secondary billing of clients as opposed to physical spot payments. Mobile banking would also enable this service provider to acquire a greater foothold by having access to the unbanked population. The unbanked population represents the portion of the population with the least access to health care. According to this is the segment of the population with the most growth potential for private health care. This IP also has the advantage of reducing the time required for one to receive any form of health care service. In collaboration with credit service providers, the system will be able to penetrate into this niche. Novelty of the IP and the Worth of Protecting It Reaching underserved and retaining existing clients has been the challenge facing the health industry in recent years. In the developed world, vicious competition has led health institutions to look for ways to retain their customers. Lack of financial access for the rural populations also means that the rural populace subsequently lacks access to health care services. Extensive use of mobile phones means that mobile-enabled monetary services have the potential to answer these challenges. Prior innovations in the field of health in an attempt at improving efficiency, convenience and cutting of costs have proved to be unable to sufficiently address these challenges. In recent years, there has been the in the making of health care payments. The most recent were the use of the financial instruments of debit and credit cards. Though these instruments had a significant impact on the improvement in the efficiency convenience and lowering of costs of health care services when first introduced, their effect fizzled off due to a variety of factors. Credit and debit cards have been perceived as a preserve of the rich and well to do for a long time. This is because most major credit and debit card companies require the holder of a card to have a certain pattern of income, if not fixed income streams. These means also lacked exclusivity as they belonged to credit and debit companies hence no one company had the competitive edge. The idea of mobile money payments tailored specifically for health payments has the potential of revolutionizing the provision of health care the world over due to increase in access and the reduction in costs of the service provider. It is important for Sacred Health Care Providers to protect this new innovation for just like mobile payments revolutionized the financial remittances market; it has the same potential to revolutionize the health industry. It is crucial for her to obtain an exclusive rights license to the product for a period in order to gain a foothold. After SCHP has obtained a foothold, she will consider the option of a partially exclusive license where she may sell the patent for royalties to selected companies. Protecting the IP There are several ways which the company may employ to protect the invention. SCHP will file for protection under a patent, copyright and trademark laws. Since the invention encompasses wide technological aspects, it may require legal counsel to help decide whether to file for patent copyright or trademark laws. It will be important for SCHP to acquire knowledge on other similar innovations in the field so that in the continuing development and research on the product, there will be no imitation of other people’s ideas. Imitation of other people’s ideas may lead to law suits and substantial losses and even to sharing of proceeds from the IP. To give the product a competitive advantage, SCHP aims to make the service available at a premium and operate a system of points to users of the service. She will engage in continuing research, in addition to studying the competitor’s marketing strategies in order to respond and react in time to retain market share. All collaborating partners and employees of the companies involved will have to sign non disclosure agreements before they are allowed into the partnership. The last and most important protection of the IP will be obtained from the legal system ranging from the patents, trademarks, and copyright laws to litigation when these are violated. Appendix Searching Strategies 1. Search for the keywords relating to challenges and opportunities in the provision of private health care 2. Search for IT and mobile banking in relation to payments in health care 3. Trends in health care Relevant Patents Mobile banking- Diebold ATM Company. Electronic cashless system Cashless transactions without credit cards, debit cards or checks Identification of IP http://www.gsmworld.com/our-work/mobile_lifestyle/mobile_money/mobile_money_transfer/index.htm http://www.eiu.com/index.asp?layout=ebArticleVW3&article_id=757147860&channel_id=.&refm=&page_title=Latest+research&rf=0 http://www.businessdailyafrica.com/Company%20Industry/Money%20transfer%20firms%20target%20mobile%20services/-/539550/912136/-/item/0/-/6uktiiz/-/index.html Management and Commercialization http://www.health.wa.gov.au/IP/background.cfm?CFID=9675173&CFTOKEN=12460984 http://www.iphandbook.org/handbook/ch17/p11/ Trends in Provision of Private Health Care http://www.lowesforpros.com/health-care-facility-management-trends http://www.healthcaretechnologyonline.com/article.mvc/10-Healthcare-IT-Trends-To-Watch-In-2010-0001?VNETCOOKIE=NO Executive Summary Billing services at present exist to deal with transactions involving health care payments. Most of these transactions are carried out through the use of debit and credit cards. These services though they relieve medical experts of tedious, detailed work, rarely offer a means to significantly make the most of the practice's bottom line. Mobile banking for health care will not only make available office personnel for more critical responsibilities, but will also improve client convenience. State statistics show that about 50% of transactions in health are carried out in cash, 25% by credit and debit cards and the rest by virtual means. MyIP intends to acquire at least 50% of these numbers. Statistics prove turnaround on credit and debit card payments to be 20, 50, even 80 days or longer, creating grave outstanding receivables for the business. By transacting business by mobile payments, MyIP will be able to reduce then turnaround period to about 12-16 days. This lessens outstanding receivables accordingly and immensely improves cash flow. Figures also show a 10% rejection of credit and debit cards at the point of sale. MyIP will reduce such inconveniences through its distinctive features. Mission MyIP intends to be the premier mobile banking payment health care system in Sacred Health Care Providers. It is dedicated to improving efficiency, effectiveness and the lowering of cost for private health care billing and to improve health care payment transactions in general. The business intends to make enough profit to repay the costs of innovation and finance continued research and development of the product. Objectives 1) To be the market leader in the private health care industry 2) To reduce costs, increase efficiency convenience of customers 3) To revolutionize the private health care sector through incorporating the uninsured and unbanked into its system Keys to Success The key to the success of the innovation is to improve customer efficiency and to bring in the unbanked and uninsured populace into the private health care while ensuring that the innovation is protected from competitors. Product/Technology Description The idea of transacting health care payments is derived from the idea of mobile banking. Mobile banking is a product developed in Kenya called M-PESA. The initial concept of the IP was to provide loans to the uninsured and the unbanked through the various banking and health insurance companies. The concept was to provide cheap and instant loans to people in emergency medical situations. The users of the service would be capable of tracking their repayments more easily through the accounts in their mobile phones. This evolved into other uses as the users of the service soon found other uses for the service. The concept was later developed and evolved to be a platform for having virtual money specifically to pay for hospital bills and other health related payments from the phone. The IP will also partner with other financial institutions such as banks and other credit institutions and other private healthcare providers. The banks and credit institutions will link the mobile phone users with their bank and other accounts and will also enable them to acquire overdrafts and loans upon request. This will eliminate rejection at points of payment and increase convenience for clients as the accounts can be topped up instantly at the touch of a button. As the mobile bank account is more of an impersonal service, it will enable people to transfer virtual money from one account to another so that they will be able to use it whenever and on whomever they want. A particularly innovative idea of the IP is that it the money stored in the virtual account does not expire. Thus, a person may use other means of payment for his convenience and decide to use the mobile payment option when it suits him. The IP is designed to give customers incentives to use it. This will be achieved by giving points to users every time the service is used. The users will also get price discounts on their medical bills every time they use the service. Market Analysis MyIPs target market consists of many billing systems such as credit and debit card providers, virtual money and cash payments. All of these have a varied market share which the IP will target. The novelty and, convenience and cost effectiveness of MyIP is particularly appealing and should be a driver of growth for the business. Market Segmentation The following is a chart showing the number of operators in the target market. Year 2 Year 4 Year 6 Year 8 Year 10 Potential Customers Growth Credit Cards 2% 867 884 902 920 938 Debit cards 2% 179 183 187 191 195 Other 2% 18 18 18 18 18 Total 1.98% 1,064 1,085 1,107 1,129 1,151 Main Competitors Our main competition is Diebold ATM Company which controls the largest share of the credit and debit card market. Their strengths are: • Experience. • Large client base. • Client trust Their weaknesses are:  High loan repayment rates  Inconvenience  Cater mostly for the upper class Our ability to compete is in our capacity to offer convenience to our customers at the cheapest cost the market has to offer, cheap loan repayments, discount rates, efficiency and reaching out to the lower classes in society who represent the largest growth potential market. Business Participants In recent years, many health care providers have been experiencing escalating costs in health care provision. Research attributes a significant proportion of these costs to be due to increasing costs of payment transactions and the costs of keeping of these records. The government through the NHS also affirmed that transaction payments in health posed a serious challenge in the quest to reduce operational costs. Congress is in the process of passing laws which are geared towards enhancing more technological innovation in all transactions particularly in health care. In this regard, Sacred Health Care Providers intends to hit the ground running in order to acquire the necessary market share in case new government sponsored innovations hit the market sooner than expected. Market participants are also likely to react to the launch of MyIP by coming up with similar packages and hence time is of the essence if success is to be achieved. Developmental Plan Studies show that the most growth segment in today’s health market is the unbanked and uninsured populace. These are the people who will drive growth of private health care in years to come. Incidentally these are the same people who have a mobile phone and hence would benefit from this technology. Studies also show that the upper echelons of society put convenience and efficiency first in conducting business. Thus, Sacred Health Care Providers intends to provide the maximum convenience and efficiency in order to retain her share of this market while venturing into the uninsured populace. MyIP also recognizes and appreciates the segmentation in society and as such offers differential costs to her clients based on their ability to pay. Competitive Edge 1) MyIP will offer the following benefits for users of the program 2) 24 hr customer care 3) Points and discount upon usage 4) Cheap loan and overdraft facilities 5) Connection to bank accounts and credit facilities 6) Convenience and efficiency Marketing Programs MyIP will have to be marketed in a manner that will reach out to a large number of people in the shortest time possible in order to reach our targets. The program will also give clients points and discounts for referrals. In addition to these the IP will also include a listing in the Yellow Pages, networking with the health services council to promote the concept, attending Medicaid, and The service provider intends to offer price discounts depending on the usage of the service, as opposed to other methods of transaction payments. The higher the usage of the service the higher the discounts and the points earned. The points will be redeemable for other medical services. Usage dollars Discounts in dollars 100-200 20 201-300 30 301-500 50 501-1000 80 1000+ 120 Strategic Alliances MyIP is an innovation which is strategically affiliated with Citibank Group and Bank of America which will provide the banking services and it is also affiliated with AIRTEL and ZAIN mobile phone providers. These were selected due to their large networks and the large number of customers that they have. Critical Risk Our financial chart is budgeted to sustain the Worst-Case business situation. Financial risk was addressed by assessing our monthly projected break even, calculations of worst-case shortfalls based on assumptions and lastly budgeting of operational shortfall in case of contingency. The service provider has incorporated the most experienced managers in mobile banking and payments to head the payments and transactions division. Due to the current economic crisis we were forced to downscale our scale of operations. Initially we had planned to offer all services at a premium, but this is not feasible owing to the prevailing economic circumstances and hence the system of discounts and points. However, this will be reviewed depending on prevailing conditions. The head of transaction payments has a wide background in mobile banking payments having been part of the team that pioneered the concept in the Kenyan market. Currently he is a consultant with various international money transfer services. In addition, we looked up the statistics of virtual payments, and we are in close consultation with authorities in money transfer and payments in order to account for any variances when the project is launched. The need for additional capital after the launch of the MyIP could not be overlooked. In this regard, the company has drafted an additional contingency budget in case of shortfalls and increase in operational costs. The company also intends to approach investors in the venture to provide additional capital for continuous research in addition to injecting cash during slow periods. Financial institutions which have provided loans for the project will also be encouraged to convert their loans to equity in case the project does not take off as planned. General Assumptions Year 2 Year 4 Year 6 Year 8 Year 10 Plan Month 1 2 3 4 5 Current Interest Rate 6.00% 6.00% 6.00% 6.00% 6.00% Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% Other 0 0 0 0 0 Financial Plan Year one projections predict a lower than average sales volume, below average seat turn, and more than average operational costs. This position will assist us ensure adequate financial scheduling to contain a practical ramp-up period, and business accomplishment, also guaranteeing that we do not go into this endeavor under-capitalized. Important Assumptions Economy We foresee a slow-growth economy, improving from an economic downturn. Business Growth Annual Growth Rate Percentage. We expect modest expansion over the future years. Year 2: 6%     Year 4: 5%     Year 6: 6% Year 8: 6.5 Year 10: 7% Industry & Start-Up Fiscal Year-1 Ramp-up. Our knowledge in the business proves a longer ramp-up stage for virtual money payments over other forms of payment. Break-even Analysis For our Year one Break-Even Analysis, we have average operational fixed costs of $60,230 per month. We hope to surpass our break-even point in October of our first year. As we leave the start-up phase of the production and center on cost management, we will drive the (COGS) down, dipping our break-even value, and growing our Gross Margin. Expansion as a Business objective We have set several financial objectives to grow the success of the MyIP, and compound the earnings for investors. Our general objective is to maintain MyIP as an inimitable and eclectic idea. Based on projections, if the business has acquired market share by the end of year one the company will look into acquiring a non exclusive license in order to get royalties from other companies interested in using the idea. Works Cited Britz, M. Banks Eye Opportunities in Healthcare Beyond HSAs. 30TH November, 2010 http://financetech.com/news/bank/showArticle.jhtml?articleID=207800322 Goodman, C. Introduction to Health Technology Assessment. http://www.nlm.nih.gov/nichsr/hta101/hta101.pdf Kadas, R. Health Management Technology: HCFA's evolving role - Health Care Financing Administration. 30TH November, 2010. http://findarticles.com/p/articles/mi_m0DUD/is_n8_v16/ai_17342870/ Murphy, J. Healthcare Financial Management; Linking technology processes for payment collection. http://findarticles.com/p/articles/mi_m3257/is_6_63/ai_n35529541/ O’ Sullivan, J. Hospital Strategies and Transactions: Healthcare Reform and Market Evolution.30TH November, 2010. http://www.beckershospitalreview.com/hospital-transactions-and-valuation-issues/hospital-strategies-and-transactions-healthcare-reform-and-market-evolution.html. Read More