Burroughs-Wellcome Company Case SolutionÂ
Alternative 1: Maintaining the statuesque:
This alternative suggests following the current price and same daily intake dosages of Retrovir.Â It means that the company has to sell the AZT drug at the price of 120 for 10 capsules.
- It would result in high margin because of lack of further research.
- It would generate more profit to reinvests in the future research and development
- It would result in higher sales with high supply
- High return on investment
- All shareholders will be happy
- It will continue the possible lawsuits
- It may increase the death rate because of unaffordability for customers
- Increase in personal relationship issues with the customers
- Continue pressure from lobbyists
Alternative 2: Reduce the price
The second alternative favors to cut the price further by 20% after which the price will be $ 96 and it would increase the production by 52.2% in order to reach break even point.
- It would tend in the positive brand image
- Less daily and annual costs per consumer
- Chances of affordability increase and death rate would decrease
- It would avoid legal complications
- It would result in loss
- Less return
- Less money to invest in the R&D
- It would take long time to recover investment
Alternative 3:Â to reduce the dosage
This alterative suggests reducing the dosage about 20% from 1200 milligram to 960 that will reduce the cost of production and reduce the number of capsules in packet.
- Less toxic
- Customers would save on quantity of pills
- It would lead longer life customers and pill use
- It would decrease the cost per customer
- Less effective results and Lower revenue
- Purchasing power would be reduced because patients will become aware of reduced FDA rate
It is recommended that the company should follow alternative 1, which is maintain the status quo and maintain same price at 120 per 100 capsules and to keep the same dose of 1200 milligram per day.
It is recommended because it will generate more profits towards the shareholders. It will provide liquidity to recover the research and development loss as well as it would generate enough money for future research and development for Retrovir AZT drug………………
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