| BUS368: Innovation Management and Digital Transformation |
Question 1
Doctors are likely to recommend the use of oxygen therapy for patients with asthma, pneumonia, chronic obstructive pulmonary disease, and sleep apnea. Oxygen therapy has been proven to relieve breathing difficulties and speeding up the body’s healing process. With the COVID-19 Pandemic, some asymptomatic or mildly symptomatic patients in some countries are provided with oxygen therapy as doctors see it as a potential method to help in the recovery process.
With the aging population in the developed world and the need to prepare for the next respiratory outbreak, there is a market demand for oxygen concentrators from these wealthy countries. The global oxygen therapy equipment market in 2020 was estimated at US$3 billion and it is expected to reach US$5 Billion by 20272.
The use of supplemental oxygen generated from portable oxygen concentrators is slowly becoming popular as it allows people to perform oxygen therapy in the privacy of their homes. One example of a portable oxygen concentrator can be found in this link:
The Managing Director of Pharma United is a veteran engineer who started the company in April 2020 with the mission of building products that is important in the fight against the COVID-19 Pandemic. The Managing Director had gathered a group of engineers to build their own machinery to manufacture disposable surgical masks in Singapore.
Within one month, this new Small and Medium Enterprise (SME) was able to roll out its first B2C product which is the “Made in Singapore” surgical masks from their indigenous machinery. The booming sale of disposable face masks provided the company with their first Star Product before steadily become the company’s Cash Cow.
The original bunch of engineers was also encouraged by the Managing Director to spend one day a week to experiment and build prototypes of products that would be of business value during the pandemic. Aided by the good money made from their surgical masks, this SME was then able to develop their first B2B product, a Portable Disinfectant Gate by July 2020.
As a result of this B2B product success, the Managing Director decided to introduce a company scheme on profit sharing amongst staff for any future product successful launch.
All these successes from Pharma United gained a lot of mainstream media attention as it was good news fodder during the gloomy pandemic days. At the same time, the publicity helped this SME to attract new graduate talent via the SGUnited Traineeship Programme, and a group of fresh engineering, graduate hires helped in the development of another highly successful B2C product – the UV Steriliser Box. The team in Pharma United was growing steadily. Once the Managing Director found out the potential of the Oxygen Therapy market, the Engineering Team willingly accepted the new challenge to build a low-cost, easy-to-maintain Portable Oxygen Concentrator.
In late Dec 2020, the Pharma United Managing Director held a highly publicized press conference to promise a cheaper and better portable oxygen concentrator. This was done in anticipation of another successful product launch. A registered charity organization, Star Helpers, had approached the Managing Director in Jan 2021. As part of their charitable work, Star Helpers had adopted a few blocks of HDB flats with a high percentage of aging residents.
Pharma United Managing Director had readily agreed to supply a number of trial oxygen concentrators to Star Helpers in return for providing a test bed for the products by the end of the 2nd quarter of 2021. This tie-up also helps to fulfill the company’s Corporate Social Responsibility (CSR), which is rarely a priority for any SME. This charitable arrangement was quickly announced on both Pharma United and Star Helpers’ Facebook, Instagram, and Twitter accounts.
Assume that your team and you have recently joined Pharma United under the SGUnited Traineeship Programme as Product & Service Development Executives to further strengthen the Marketing team. Your team has been tasked to carry out tasks to ensure the future success of both Pharma United and its upcoming Portable Oxygen Concentrator.
(a) Categorise the Innovative Organisational Characteristics of Pharma United, applying relevant theories learned from the course. Provide relevant examples from the case.
(b) Prepare the key New Product Development Activities of the New Portable Oxygen Concentrator.
Question 2
In early Feb 2021, two months into the development of the oxygen concentrator in Pharma United, the Chief Engineer conducted a New Product Development Briefing with the top management. His engineering team was able to come up with an efficient oxygen concentrator design. It was good in terms of quality and volume of oxygen it can generate.
However, the Managing Director of Pharma United was concerned with the design. Firstly, the design was bulky and not portable. Secondly, the maintenance of the oxygen generator required staff with specialized training. Finally, the price of the new product was 10x of what the market could bear. This runs counter to what the Managing Director had promised during the December press conference.
The Marketing Director became concerned about how these latest developments will affect both the reputation of the company and their chance of getting an investment from the tycoon. The Managing Director also feared the loss of goodwill amongst the public if the company cannot fulfill its promise to Star Helpers. This may indirectly affect the sales of their existing range of products and staff recruitment.
The Managing Director is unwilling to give up the project because the innovation can generate good quality and volume of oxygen. The Marketing Director has been tasked with looking for an alternate service business model in order to meet the timeline set at the end of the 2nd quarter of 2021. Your team has been virtually summoned by the Marketing Director and is now presented with the task of coming out with service innovation to rescue this seemingly doomed project.
(a) Debate your team’s proposed service innovation using the Innovation Service dimensions framework. Your team is to provide the source of service innovation that is has helped to develop your team’s new service innovation recommendation.
(b) Discuss the Marketing activities that will link R&D and Sales to make your team’s service innovation a success.
(c) Indicate if Pharma United should continue their CSR commitments by analyzing the possible strategies behind Star Helpers’ approach to Pharma United.
