Gene One
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Running head: PROBLEM SOLUTION: Gene One
Problem Solution: Gene One
Situation Analysis and Problem Statement: Gene One
The next three years will be either extremely devastating or profitable to Gene One. Gene One is a privately held biotech company that is planning to go public in the next 36 months. Wall Street is optimistic the biotech industry will grow exponentially and Gene One is confident they can increase profits based on the products being developed by the R&D organization.
Describe the Situation
Issue and Opportunity Identification
Gene One is strategically planning to go public within the next 36 months. In order to achieve this goal the company is relying on the R&D organization to develop two breakthroughs and six new products while increasing annual growth 40 percent. There are many issues and opportunities that will arise for Gene One during the implementation of the plan. I will address the issues and opportunities in the next few paragraphs.
The internal issues focus on IPO preparation, lack of knowledge regarding IPO, and personal conflicts and attitudes within management. Gene One is concerned with IPO approval on the first submission to the SEC. The preparation for the IPO will increase expenses for many departments within Gene One. The HR, IT, Finance, and Training organizations will be tasked with developing and delivering courses on GAAP, leadership and conflict management.
There are two glaring external issues for Gene One to deal with while implementing the plan. Raising funds for the IPO and the fast paced technological changes in the biotech industry are external issues. The Public Relations team will be responsible for generating hype about Gene One and R&D will be responsible for keeping abreast of technological changes that could impact Gene One.
The opportunities are vast for Gene One. By going public Gene One can increase the profits, product knowledge, market share, and develop a cohesive management team. Table 1 depicts several key issues and opportunities for Gene One.
Stakeholder Perspectives/Ethical Dilemmas
There are many ethical dilemmas in Gene One with the key stakeholders, employees and management. The management team has conflicting goals for the company and this is causing leadership issues with several officers and board members. Table 2 depicts several conflicts between individuals on the management team.
Frame the “Right” Problem
Gene One will become a publicly traded company by increasing leadership competency and technological breakthroughs in the biotech industry.
Describe the “End-State” Vision
Below are the End-State goals for Gene One.
Increase growth by 40% each year for the next three years.
Apply for IPO and obtain approval on first submission to SEC.
Upgrade all systems, processes, and procedures to comply with GAAP.
Increase management competency by providing training in leadership, conflict management, GAAP.
Identify the Alternatives and Benchmarking Validation
Gene One conducted benchmarking to develop alternative solutions to the end state goals. The benchmarking focused on many topics such as expanding market territory, the biotech industry, GAAP, leadership competency, and companies that had successfully and unsuccessfully applied for IPO. By focusing on these topics sufficient knowledge will be gained to make informed decisions regarding alternatives for Gene One.
The data received from this research was extremely valuable to Gene One. The research on expanding market territory indicated that Gene One should increase customer base to gain the volume necessary to improve profitability in the highly competitive organic food industry. Increasing the customer base will improve the chances of meeting the 40% annual growth for Gene One. The benchmarking identified Nobel as one of the fasting growing companies in the country. Nobel expanded their market territory and posted a four year sales growth of 1420 percent and a five year growth of 14,000 percent. Nobel is proof that expanding market territory can be extremely profitable. (Nobelworld, 2004)
Gene One plans to develop two breakthroughs and six new products in the next 36 months. Research was conducted on biotech and organic firms to determine the success of launching new products into the market. A success story is Natures Own, a Flowers Foods subsidiary, introduced in 1977. The company is still thriving and introducing new products after 29 years. In September 2006 Natures Own expanded its successful line of breads by introducing six new whole grains products. Natures Own has annual sales of more than $450 million. I would say they are a success story when it comes to expansion. (Natures Own, 2006)
GAAP is another issue we addressed in the benchmarking. GAAP (Generally Accepted Accounting Principles) is a “set of accounting principles, standards and procedures that companies use to compile their financial statements” (Investopedia, 2006). To insure conformity with financial information and verify assets are safeguarded with GAAP companies should review accounting systems, reporting methods, auditing procedures and internal control systems. (Weinstei, S., November 1984) Gene One is planning on going public and the government and investors will require all financial statements are credible and comply with GAAP.
Gene One researched WorldCom and Enron on issues to avoid with GAAP to have a successful IPO and remain compliant once they are a publicly traded company.