MacMedia - Tollgate 3


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Enterprise Proejct Assessment

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MacMedia - Tollgate 3

  1. 1. Today’s Agenda •Current Situation •Business Strategy •Business Plan •Competition •Go-to-Market Plan
  2. 2. MacMediaAn internet channel support forAcademic Detailing delivery Luis Quiroz MEEI Candidate
  3. 3. Market Revision Year 1 2 3 4 5 Projected No of Canada physicians 66,405 67,593 68,782 69,970 71,158 Market Size for A.D. rating 0.69 45,819 46,639 47,460 48,279 49,099 Web-based A.D Technology Factor 0.63 28,866 29,383 29,900 30,416 30,932 Adjustment for adoption rate 4,089 6,515 10,375 16,519 26,293 Year 1 2 3 4 5 Projected No of Ontario physicians 24,115 24,567 25,019 25,471 25,923 A.D. Rating 0.69 16,639 16,951 17,263 17,575 17,887 Market Size for Web-based A.D Technology Factor 0.65 10,816 11,018 11,221 11,424 11,626 Adjustment for adoption rate 1,532 2,443 3,894 6,204 9,882 Year 1 2 3 4 5 Proportion of adoption 14.17% 22.17% 34.70% 54.31% 85.00% Adoption Rate Adoption rate in Effective year 5 85.00% (datum) growth 500% (datum) Annual growth of adoption Years 4 (datum) rate 56.51%
  4. 4. Expectations & Impact KEY FINANCIAL PROJECTIONS (in thousand CAD) Advertisers’ Reasons Y1 Y2 Y3 Y4 Y5 expectationsEnd-Users 60% 1,200 1,913 3,050 4,859 7,740 •Service needs to •Service must be be testedRevenues $ 242.40 $ 463.71 $ 739.32 $ 1,177.82 $ 1,876.18 attractive •Unknown marketExpenses $624.38 $655.60 $780.25 $868.72 $1,239.41 •Steady growth responseNet Profit ($381.98) ($191.89) ($40.93) $ 309.11 $ 636.77 •Stable online •See to believeCash Balance before community attitudefinancing ($381.10) ($191.39) $41.33 $354.87 $681.98Financing $ 400.00 $ 300.00Cash Balance after financing $ 18.90 $ 108.61 $ (48.68) $ (45.85) $ 281.26Ending Cash (Accumulated) $ 30.90 $ 139.51 $ 90.83 $ 44.98 $ 326.24 KEY FINANCIAL PROJECTIONS (in thousand CAD) Academic Detailing Reasons Y1 Y2 Y3 Y4 Y5 expectationsEnd-Users 25% 500 625 781 977 1,221 •Academic Detailing needs to beRevenues $ 242.40 $ 151.50 $ 189.31 $ 236.82 $ 295.97 promoted in OntarioExpenses $624.38 $639.99 $752.75 $739.01 $767.75 •Conservative number •Unknown market of enrolments responseNet Profit ($381.98) ($488.49) ($563.44) ($502.19) ($471.78)Cash Balance before •Conservative rate of •Service needs tofinancing ($381.10) ($487.99) ($481.17) ($456.43) ($426.57) growth be displayed & testedFinancing $ 400.00 $ 300.00 •Limited resourcesCash Balance after financing $ 18.90 ($187.99) ($571.19) ($857.14) ($827.28) have been allocated for similar programsEnding Cash (Accumulated) $ 30.90 ($157.09) ($728.28) ($1,585.42) ($2,412.70) in the past
  5. 5. Business Strategy: Current Situation Market Opportunity •New market in Ontario •Almost 10,00 physicians who would potentially sign up into the service within the next 5 years •Around $ 2 million in revenues a year in advertising services for hosting a stable community of health care professionals •Rate of familiarity with technology is 65%in Ontario •Online CME adoption rate is the fastest in N.A. (85%) Strengths Weaknesses•Extensive primary and secondary market research •MacMedia has no track-record of any product or service for the health sector•Expert advice and monitoring from the School ofEngineering and other McMaster departments or •No feedback from real use of the serviceprograms •Unknown market response•Academic Detailing programs have been alreadydeployed and successfully evaluated •Opposed views and expectations about market size and growth•The Family Medicine Dpt. is open to cooperation as asupplier of A.D knowledge •Lack of Capital•McGraw Hill Canada is open to cooperation undercertain conditions as a sponsor/advertiser
  6. 6. Business Strategy: Strategic Decisions It is necessary to: •Raise Capital •Build a prototype & run a pilot education program in Ontario •Promote the service •Create interest among advertisers to invest in the channel Options for Raise CapitalVenture Capitalist•No track of success•Very riskyEarly Stage Investment Prototype & Pilot Education•Ministry of Research and Innovation-Ontario Do it aloneGovernment•Knowledge Development and Exchange – •No Academic Detailing knowledge & materialsHealth Canada •No credibility•Microsoft Pharmaceutical and Life Sciences •No access to physicians who receive CMEInnovation –Private company Establish Partnership with Academic Detailing Ontario Options for Bringing Advertisers •Access to A.D. expertise and materials Launch the system and look for advertisers •Access to detailers or educators •Access to physicians •It can take time to convince •Expose physicians and advertisers to the •Payment for the operating costs will be delayed prototype and real system •Bundle MacMedia system with A.D for funding Invite advertisers in the early stages •Allow to compare the benefits with other advertising options •Allow to identify the advertiser with the channel
  7. 7. Benefits from Partnership A potential formal agreement with the ACADEMIC DETAILING SERVICE ONTARIO and MCGRAWHILL CANADA to start the project will lead to the following benefits: MACMEDIA ACADEMIC DETAILING MCMGRAW HILL ONTARIO •Disseminate Academic Detailing in a broad scale •Build track of success •Reach prospective customers in •Deliver CME and credit a more personalized way •Confirm assumptions on education in a more efficient market size and growth manner •Tailor the message for the type of user •Evaluate the influence of A.D on physicians’ prescribing •Access to a captive audience all behaviour the time This is Win-Win deal for al parties
  8. 8. The Business PlanMACMEDIA’s Mission Statement•MacMedia’s mission is to serve as a channel for research institutions that disseminate medical knowledge. MacMedia helps these institutions in their quest to reach the healthcare sector by using online supporting tools.•By positioning as an online channel, MacMedia builds permanent online community of HCPs which become attractive for advertising services. MACMEDIA delivers your medical knowledge and messages fast and efficiently
  9. 9. The Business TeamBusiness Development:•Luis Quiroz Bachelor of Industrial Engineering, Master in Business Administration, Master’s Candidate of Engineering, Entrepreneurship and Innovation at McMasterTechnical Expertise:•Mohammed AmjadGraduate from the MEEI ProgramCEO of ISDN Technologies. Telecommunications & Energy
  10. 10. The Organization Structure CEO TBA Advisory Board •Dr. David Potter •PharmD. Lisa Dolovich •Dr. Kamran Sartipi Operations Business Administration Commercialization R&D Development & Finance Mohammed Luis Quiroz TBA TBA Amjad
  11. 11. Operations: The locationLocation: HamiltonThe city is center of Hamilton Health Science (HHS) group ofHospitals:•Chedoke•Hamilton General•Henderson General•McMaster Childrens Hospital•McMaster University Medical Centre•The Juravinski Cancer Centre-CBRT (Community Based Residency Training): It is provided by McMasterFamily Practice-CBRT provides residents with the opportunity to train in a ”typical”community practice*Proximity to almost 4,200 physicians (Hamilton-Niagara-Waterloo-Wellington-Brampton)The Ontario Physician Human Resources Data Centre
  12. 12. Products & Price Structure Products Cost per year Subscription & Banner* $ 2,000 (Basic Service) Value Added Services** In-session advertising $ 36,000 (short infomercials before or after the (3 times a year per physician x session) $12 per infomercial) Customized emails $ 60,000 (Surveys, discounts, specials offers, (10 times a year per physician product list/information delivered to x $6 per customized email) personal accounts)*Renewable annual subscription. Banner visible to all subscribed physicians**Packets of 1,000 physicians
  13. 13. Products Costing: ABC Existing CostsWeb-Conferencing Annual Existing costs Activities areSubscription are allocated allocatedInternet Services proportionally proportionallyEBM Annual Subscriptions into activities into productsPhysicians Databases Organization’s ActivitiesAnnual Tax Services Development & Testing Products containedOffice Supplies Service Maintenance/Availability in an advertisingTelephone Services package Operations AdministrationAmortization Office Rental Banners Sales ActivityFurniture Depreciation In-Session Advertising General Administration &Amortization of Equipment & Finance Customized emailsSoftwareAccounting Soft DepreciationTrademark Amortization •Whenever more than one product is produced. It is advisable toPayroll IT/Programmers - Fully calculate the cost of each product by estimating the proportion ofLoaded effort/resources allocated specifically to that product.Sales Salaries - Fully Loaded •Direct costs become into fixed costs. Fixed costs are allocated proportionallyOffice Administrator - FullyLoaded the making of the productsManager - Fully Loaded •In this case, the only variable costs are those of sales commissions
  14. 14. Product Costing for Year 4(in thousand CAD) Banners In-session advertising Customized emails Total Unit Cost Total Unit Cost Total Unit Cost Sales for Year 4 (Units) 29 12 12 $ $ Sales $ for Year 4 58.31 $ 2.00 419.82 $ 36.00 $ 699.70 $ 60.00 $ 1,177.82 $ $ Variable Costs 2.92 $ 0.10 20.99 $ 1.80 $ 34.98 $ 3.00 $ 58.89 $ $ Fixed Cost 127.61 $ 4.38 316.59 $ 27.15 $ 316.59 $ 27.15 $ 760.80 $ Profit ($) ($72.22) ($2.48) 82.23 $ 7.05 $ 348.12 $ 29.85 $ 358.13 Profit (%) -123.86% 19.59% 49.75% 30.41% Even Break Point = Fixed Cost / (Unit Price - Unit Variable Cost) Break-Even Point 67 9 6 (Q=) To encourage advertisers to purchase a package, the service charges less on banners Therefore, banners subsidizes in-session advertising and customized e-mails
  15. 15. The CompetitionAcademic Detailing MacMedia AcademicCollaboration Detailing CMEOther CME programs Currently, do not use other Traditional CME party to disseminate knowledgePharmaceutical Customer Relationshipcompanies Management (CRM) companies E-detailing Products E-detailing Academic TraditionalServices Detailing CMR Detailing session via Web- X X conferencing Printed Educational Materials X X (Unbiased sources) Product Description X (Commercial)For Physicians Sales Reps Appointments X CME Credit X X Drug sample ordering XFor Academic Intelligence System XDetailingFor Pharmaceutical Intelligence SystemCompanies X
  16. 16. Competitors’ Response & Strategy Type of Competitor Type of threat Most Likely Response Other CME programs Very Low Create partnership E-detailing & Customer Relationship Very Low None Management (CRM) companiesOther businesses offering solutions Emulate MacMedia but may create Very Low& support for Academic Detailing switching costs for A.D.Competition Strategy•Initially focus on Academic Detailing Collaboration in Ontario -Gain experience, build credibility, create success•Move quickly to establish partnership with other CME programs -The first mover creates switching costs issues for the future•Use the experience, credibility and success to propose similar solutions to Academic Detailing Programs in other provinces to use the existing platform and enhance collaboration•Plan for other ways to update HCPs beyond pcs and laptops•Explore new markets. Example: universities in North America
  17. 17. The Path for Growth New Markets: Universities New Services: Wireless Devices Target other A.D. programs in other provinces Other CME ProgramsA.D. inOntario
  18. 18. The Business Model Facilitation of Partnership Online sessions & material distributionAcademicDetailing MacMedia Physicians AcademicCollaboration Detailing channel knowledge Promotion of Products & Pays for services Advertising service Advertisers
  19. 19. Customer Acquisition Strategy:Physicians Stage Pilot Education Program Full Service for 2 years •Personal Visits (Recruiter/Promoter) •Online invitations (Physicians DBs) Strategy •Online invitations (Physicians DBs) ONLINE REGISTRATION Performed by MacMedia Academic Detailing Collaboration •Focus on residents to create a strong •A.D. will be in charge of the online critical-mass and word-of-mouth invitations and registration information •Aim at Community Based Residency •Promote intensively the use of system Training Centres forum Description (state-of-the-art technology) •Provide incentives to encourage •Promote service to the HCPs in the referrals. Example: one personal web surrounding areas page for the physicians who invited a number of new subscribers •Promote the use of system forum
  20. 20. Customer Acquisition Strategy:Advertisers Stage Pilot Education Program Full Service for 2 years •Employ full-time •Personal Visits Salespersons (Recruiter/Promoter) Strategy •Advertising charges are applicable •Service at no costs according to yearly contracts ONLINE REGISTRATION Performed by MacMedia MacMedia •Try the service •Add new features. Description Example: wireless •Suggest improvements
  21. 21. Go-to-Market Plan Business and Service Marketing Promotion Conferences & Organizations Media Journals & Newsletters Conferences •The Canadian Medical Association •Public Health Without Borders Journal Annual Meeting. San Diego. California •Archives of Internal Medicine •Events of the Canadian Advertising •ACP Journal Club Research Foundation (CARF) •Local Academic Detailing Newsletters Organizations •Canadian Advertising News •The Canadian Agency for Drugs and Technologies in Health Website •Association of Canadian Advertisers Completed and functional for Pilot Educational Program beginning 2010
  22. 22. The Path to the Market Full Service -Launch to the market- Pilot Education Program - Year 2- Pilot Education Program - Year 1- Visual & Functional Prototype - 6 months-
  23. 23. Marketing Estimate Budget In Canadian Dollars Description Year 1 Year 2 For academic detailing Conferences Fees $1,500 $3,000 Travel Expenses $1,200 $2,400 Publications in Journals $2,200 $2,200 Association Fees $1,300 $1,300 For advertising Conferences Fees $1,500 $3,000 Travel Expenses $3,000 $4,000 Publications in Journals $3,500 $3,500 Association Fees $2,600 $2,600 Recruiter for physicians Salary (Fully loaded) factor 2.5 $31,250 $62,500 Related Expenses 15% $4,690 $9,375 Recruiter for advertisers Salary (Fully loaded) factor 2.5 $31,250 $31,250 Related Expenses 15% $4,690 $4,690 Total $ 88,680 $ 129,815
  24. 24. Sales Projection
  25. 25. Financial Projection
  26. 26. Business Break–Even Point
  27. 27. Risk & Mitigation Plan
  28. 28. Thanks for your attention