The IVF technology - Essay Example

JJRT Consultancy Contents 1.1.Industry 1 2.Analysis 2 2.1.Value PropositionTBC 2 2.2.Target CustomerTBC 3 2.3.Distribution channelTBC 4 2.4.RelationshipTBC 5 2.5.Infrastructure Management 5 2.6.Financial Aspects 6 2.7.Summary 7 3.Recommendations 7 4.Conclusion 7 5.List of References 8 Background 1.1. Industry The IVF technology is changing rapidly and everything they do is more complex than it used to be, but that comes from being an established industry, rather than a pioneering industry, says Melbourne IVF chairman Dr Lyndon Hale. He also says that the IVF groups have grown bigger and bigger,” it’s used to be a cottage industry with a couple of doctors and nurses. Now big IVF units have over 100 staff The Age (2012). The Sydney IVF Founding director Professor Robert Jansen says his group is happy to remain an unlisted public company owned mostly by doctors and staff”The Age (2012). The company’s objective is be as transparent as possible to the public since they depend on the community an enormous extend. The unique product of the IVF industry is coupled, at least in Australia, with a unique sense of entitlement. Consequently, Australia is the only country in the world providing unrestricted public funding for IVF through its national health scheme. There is no limit to the number of cycles that women can have and no legal age limit. (Sweden and Britain provide three on the national health and they have to be before age 39. In New Zealand women get two free cycles in a lifetime and in Canada until recently you didn't get any on the national health)The Australian (2012). According to Human Embryo research Panel much of the IVF research has been directed by clinicians who lack experience in basic research and development biology. In addition, the commercialization of reproductive technologies has resulted in the establishment of profitable enterprises, including sperm banks, IVF centres and fertility clinics. The issues pertaining to embryo manipulation involve social values and moral judgements, but as the business interests of IVF are to insure that viable eggs can be effectively implanted into a woman’s uterus at acceptable cost, commercialization of embryos increases the prospect that there will be no uniformity in the way ethical values and judgements will be interpreted and implemented Krimsky and Hubbard (1995). Professor Paul Komesaroff, director of the Monash Centre for Ethics in Medicine and Society, says the issue of embryo donation is a vexed one. "There are different opinions about when the embryo acquires special religious, spiritual or ethical significance," he says. "Some people say it's at the moment of fertilisation, others say it's at the moment of conception, others say at the 16-cell stage, some say it's much later."(Labi, 2012). In the case of Sydney IVF “The membership of the ethics committee significantly exceeds the constitutional requirements set by the Australian Government's National Health and Medical Research Council (NHMRC) in its National Statement on Ethical Conduct in Research Involving Humans” Sydney IVF Stem Cells (2011).Dr Robert Jansen, CEO has engineered a successful research division based around solid organisational policies and procedures based around their Ethical Governance Framework. Standards of ethical behaviour are re-enforced by the immediate dismissal for any procedural error that has significant consequences. This has set the tone for ethical organisational behaviour.It is clearly evident in their Shared Values for Integrity and the in line with the industry’s expectations they state “We apply the highest standards of ethical behaviour and practise. We are honest, transparent and open with our patients, our clients and each other. We respect every individual’s right for privacy and confidentiality” 1.2 Risk Management The business of In vitro fertilization involves an array of practises that should ensure safety. In this case, there has to be a number of risk managements that are infused to satisfy the ethical, political and social concerns of the interested parties so that it does no face unnecessary repulsion. In this regard a number of risk management programs have been designed and implemented by Drs. Jock Anderson and Robert Jansen who co-founded the company in 1986 (Newton, 2007). In the Sydney IVF, the business proprietors have managed to develop satisfying stringent measures in reducing the risk associated with the sophisticated business, the lab-instituted fertility system has been a contentious issue with regard safety and ethical issues (Newton, 2007). In response, the company has managed to institutionalize the ethics committees that are independent and ‘whistle blower’ safeguards that keenly monitor the progress of the operations and will blow the whistle whenever contrary activities are observed in the company that may jeopardize ethical code of conduct (Newton, 2007). In so doing the risk factors associated with the business has been tremendously managed given that the company has also widen there services to include screening for the genetic disorders of the stem cell and conducting the DNA test to ascertain the lineage and paternity (Newton, 2007). The contested level of risk associated with the business has elicited several concerns by the company to adhere to standards and to ensure that the outcome of the business is not tainted in any way. 1.2 Decision Making Process UP to this time there is no proper guideline both in theory and conceptual framework on how the tem cell can be used in the therapeutic industry (Soiffer, 2008). This has been occasioned by the fact that the complexity of the signalling pathways and the regulatory nature has necessitated the slow development in the provision of the useful predictive models based on the molecular composition (Soiffer, 2008). Despite the complexity, there are still hopes that the system can still be useful in the provision of the useful models in the hypothesis of the emerging properties like the phenotypic nature of the stem cells (Soiffer, 2008). Such are the decision making that is currently going on in the case of stem cell. The coarse–grained decision is aimed utilizing critically the self-organized concept. In the decision making model, it is proposed that the expression of gene take place in away that the regulatory networks are organized by self to a critical state (Park, 2011). This activity is characterized by the various gene expressions that occasion the different transcriptional activities in association with the different cells (Park, 2011). During the decision making stage, the diversity state of the cells is reduced. Both the intrinsic and extrinsic factors that are associated with governing the state of the stem cell do provide the much needed logical pathways for the realization of the conceptual model (Park, 2011). 2. Analysis 2.1. Value PropositionTBC Value proposition (VP) represents affirms commitment towards setting and achieving goals that represent strategic value to the firm, customers and key stakeholders (Weinstein, William, 2004, p 101-103). Barnes (2009) defines VP as the product of a process labelled the Value Proposition Process (VPP). The process takes into account a number of inputs including customer experience, offerings, benefits, costs and risk, price and alternatives. Managing these inputs via the VPP provides outputs including new and retained customers, profitable growth, enhanced offering and corporate through to sales messaging (Barnes, 2009, p.22). In order to establish the value proposition and effectively provide data for the Osterwalder (2005) business analysis model all these components of Sydney IVF will be identified. Firms and people are fundamental to successful innovation. Government has an important and strategic role to play in facilitating this innovation where it is confident, firstly, that there are structural impediments to markets doing the work and, secondly, that government involvement will generate more benefits in addressing these problems than it will generate in collateral costs. (Cutler, 2008, p.xiv) 2.2. Target CustomerTBC Value starts with knowledge of the customer, however it is not limited to their needs and tastes and is established as much inside the organisation as it is in the customers perception of the product (Cheverton, 2009, p.2). In order to identify the segment of customers Sydney IVF wants to offer value to, we must first look at their specific outputs and then identify which customer segment these represent value to. With the limited therapeutic applications of stem cells due to technological, societal and legal concerns, in particular Australian law with Australian legal literature on stem cell usage failing to account in detail for deeper moral and cultural concerns, the bioethical position of the law is somewhat grey (Tranter, 2010, p.89-90). As an alternative re specific outputs from the Pre-implantation Genetic Diagnosis (PGD) program provide means for the development of Sydney IVF customers outside of therapeutic applicationwhichinclude pharmaceutical companies and patients groups. Pharmaceutical companies can find specific benefitfrom output of the PGD program when developing solutions for orphan diseases. The genetic screening process used by Sydney IVF which identifies and puts aside mutated single genes such as those with Huntington’s disease can be provided to pharmaceutical companies to develop targeted drugs specific to the genomes condition. The value machine model defined by Cheverton (2009) and illustrated in FIG 1 identifies how an organisation can match the needs of its customers to its own respective output taking into account outside influences by matching and aligning itself with a changing environment. FIG 1 - Source: Cheverton, 2009, p.8 As seen with the provision of mutated genes to pharmaceutical group’s outputs are matched to the customer, not the other way around. The value of this is highlighted by the fact that the stem cell division did not start drawing enough revenue to be self supporting and profitable until this was implemented. The matching of output to customer poses a number of risks to the stem cell division. 2.3. Distribution channelTBC Direct, dealer and Retail channelling identifying the most effective channel strategy, forces influencing the channel must first be analysed. When identifying risk associated with Sydney IVF channel strategy each of these forces identified in FIG 2 with their respective external influences need to be analysed. FIG 2 - Source: Rangan, Bell, 2006, Chapter 2 The four forces inside the circle represent the immediate influence on channel strategy, and the forces outside the circle represent external forces all of which have an affect on both the immediate forces and channel strategy. 2.4. RelationshipTBC Satisfied customers constitute the company's customers relationship capital (kotler, 2009, p.144). Customer relationship capital represents an organisational asset. 2.5. Infrastructure Management Infrastructure management as mentioned by Osterwalder’s (2005) entails core capabilities, partnership, and value configuration. A value proposition describes the way value is created in an organization for its customers. It shows how the most significant business processes function to create value for customers. Typically, one or two special capabilities will be the most critical to the firm’s success. These capabilities are called core competencies. One importance of partner network is that it allows for investments and increase in the value of the entire network to strengthen the company’s position. Sydney IVF due to limited resources and inadequate management attention, the company limited the area in which they compete. The company therefore decided to major on single-gene disease and never considered anything else (Kindred et al, 2009). This has been for enhancing value position of the company. Sydney IVF promises value to be delivered to the customers. The value applies to the entire organization. This is evident from their chief risk officer (Cynthia Roberts) who oversees safeguards in the entire company has a PhD in genetics and further worked as an chief scientific officer before joining Sydney IVF (page 10). The company has independent doctors affiliating with the company. This ensures that the company never lacks qualified and readily available doctor and so patients are assured of quality services (page 6). Based on the information by Dr. Robert, the company since its formation has attracted many excellent scientists and top young doctors with various specializations (page 3). Sydney IVF has partnered with various physicians who bring their own patient to the company. According to page six, individual patient seeking fertility treatments do not go to the company without being accompanied by their physicians. Based on Osterwalder’s (2005) assertions, the customer, obviously, is of importance in the determination of a firm’s value proportion. Therefore it is important for Sydney IVF to know its customers and how to communicate with them distribute the value proposition and in what manner to relate with them. In the company the customers since are best known by their physicians, it is their doctor who take them to the company. 2.6. Financial Aspects Financial aspects include revenue streams and cost structure. Based on the nature of the customer, the firm has to find the right customer channels and develop its offering and so the importance of Financial Aspects. In 2008, the company’s revenue was $53 million with an after-tax of $6.9 million. The company’s assets as at 2008 was $0.32 million and liabilities $0.19 million as at the same date. Based on the balance statements by the company as at 2008, it is evident that the company is making a steady progress. These financial movements are illustrated in FIG 3. FIG 3 - Sydney IVF’s assets, liabilities and equity from 2003 to 2008 Based on the assertions by Stojanov (page 17), the company might not be able to replace it is by then technologies in pharmaceutical industry. This shows poor attitude of the company towards resourcing and thus a risk. The company since its formation has not ventured new fields regardless of various qualified physicians. There is some evidence of private investment in established stem cell companies in Australia. For example, adult stem cell company Mesoblast raised 21 million AUD at initial public offering on the Australian Stock Exchange in 2004, (Staff writer .( 2004 ) Mesoblast closes IPO, raises $ 21 million . Life Scientist, https://www.biotechnews.com.au/article/5423/mesoblast_closes_ ipo_raises_21_million , accessed 30 March 2009 - cited in Harvey, 2009. p.78) One of the main weaknesses for the success of stem cell science in Australia is using the model of biotechnology innovation that has been developed in the United States in the Australian context. Further research needs to be done on the commercial models being adopted in an environment here scientific c research is excellent, supported and endorsed by governments at all levels, and yet public funding is the most significant source of capital.(harvey, 2009, p.80) 2.7. Summary Information from this analysis provides the menas to estables the nine building blocks identifying the logic of how Sydney IVF provides value to its customers (Clark et al, 2012, p. 32) 3. Recommendations 1) Collaborate with competitors and customers to create an industry body that advocates a stringent voluntary code of ethics and guidelines in an effort to reduce the risk of more stringent governmental regulations being enforced.—Treasa 4. Conclusion The stem cell business projects a number of risks associated with it and they should be dealt with expeditiously to restore confidence in the public as well as the critics. This is much needed for the exponential growth of the business. All the non-demystified fact underlying the technological input must also be made palatable to the public so that they can make much more informed choices. 5. List of References Cheverton, Peter, 2009, Building the Value Machine Transforming Your Business through Collaborative Customer Partnerships, Kogan Page 2009 Clark, Timothy, Osterwalder, Alexander, 2012, Business Model You A One-Page Method For Reinventing Your Career. Yves Pigneur Hoboken : John Wiley & Sons 2012 Cutler, Terry, 2008,AventurousAustralia - building strength in innovation, Viewed 18th September 2012,http://www.business.nsw.gov.au/__data/assets/pdf_file/0016/5407/NIS_review_Web3.pdf Harvey, Olivia, Journal of Commercial Biotechnology, January 2010, Vol. 16 Issue 1, p72-83, 12p. Kindred, Natalie, Rosenberg, Kathryn, Simons, Robert, 2009, Sydney IVF: Stem Cell Research, Harvard Business School, February 2009 Kotler, Phillip, 2009, Marketing Management, Pearson Education Australia Rangan, V., 2006 Transforming your go-to-market strategy the three disciplines of channel management, Harvard Business School Press c2006 Tranter, Kieran, Law, Innovation & Technology, July 2010, Vol. 2 Issue 1, p51-93, 43p. Weinstein, Art, William C,Johnson, 2004, Superior Customer Value in the New Economy Concepts and Cases, London : CRC Press 2004 The Australian. 2012. The Australian. [ONLINE] Available at: http://www.theaustralian.com.au/opinion/columnists/ivf-is-not-a-treatment-but-provision-of-a-commodity/story-fn562txd-1226249710890. [Accessed 01 October 2012]. The Age 2012 Sydney lab cleared to clone human embryos. [ONLINE] Available at: http://www.theage.com.au/national/sydney-lab-cleared-to-clone-human-embryos-20080916-4i02.html. [Accessed 02 October 2012]. Sheldon Krimsky and Ruth Hubbard, “The business of Research,” Hastings Centre Report 25. No 1 (1995) : 41-43 Sharon Labi 2012 Stem cell researchers need embryos - body+soul. [ONLINE] Available at: http://www.bodyandsoul.com.au/health+healing/news+features/stem+cell+researchers+need+embryos,8421. [Accessed 01 October 2012]. Lots of life in IVF market. [ONLINE] Available at: http://www.theage.com.au/business/lots-of-life-in-ivf-market-20080811-3t5n.html. [Accessed 03 October 2012]. Newton, D. E. 2007, Stem cell research. New York, NY: Facts on File. Park, A. 2011, the stem cell hope: how stem cell medicine can change our lives. New York: Hudson Street Press. Soiffer, R. J. 2008, Hematopoietic stem cell transplantation (2nd ed.). Totowa, N.J.: Humana. Read More