Presentation slides by Betty Derose Inc. at 2017 Johnson & Johnson OSU Campus Competition

1. Thomas & Thomas
Consultation
BETTY DEROSE, INC.
Alexander Banerjee
Brandon Donelan
Luke Lee
Judy Liang
Andy Lin
Brett Thomas
Xuejing Xu

3. Stakeholder Hierarchy
Patients
Medical Professionals
Employees
Shareholders
3

4. Consumer
Needs
Constant
blood testing
Excessive
supplies
Limiting
daily
activities
Market Research

5. Company Strengths
Strengths
Miami Co.
Acquisition
Strong Parent
Brand Equity
Opportunities
CGM & Predictive
Tech
Growing IPT
Market

6. Risk Analysis

7. Recommendation
Launch Vice Pump
Partnership Selling (2017-2026)
Silver Pricing  Small Increase (2019-2026)
Standard Marketing (2017-2019)  Advantage (2019-2026)

8. Vice Pump with
Sleek Design
Satisfies
Customer
Needs
User-friendly
Design
Trendy Product
Product Decision

10. Selling Strategy)
Partnership (2017-2018)
Retain current employees; Create jobs
Increased support for Vice Pump
Opens new marketing channels (Type II)
More cost-effective than Standard

11. Selling Strategy
Partnership (2019-2026)
Maintain long-term employment
Avoid unforeseen expenses from outsourcing
Ex: Training, lost sales, etc.

12. Pricing Strategy
Silver Pricing
Reasonable price  Patients
Balance profits & growth  Shareholders
Flexibility
Brand image

13. Pricing Strategy
Small Price Increase (2019-2026)
5% increase:
Ensures product quality
Addresses previous issues
Justified by brand reputation
Must be clearly communicated

14. Marketing Strategy
 Objectives:
 Customer-focused
 Target Market
 Relationships with Medical professional
 Market Share Growth
 Minimize expenses

15. Marketing Strategy
 Standard:
 Relationship marketing with diabetes community
 Facilitate consumer interaction with brand
 Ex: Diabetes Online Community
 Identify key opinion leaders/early adopters

16. Marketing Strategy
Advantage:
Targets Doctors
Key influence on brand decisions
Builds strong brand reputation

18. Market Outcomes
10.19%
66.88%
11.90%
11.03%
Market Share Percentage (2026)
Premiere Insulin
Rider
Miami Diabetes
Other
13.00%
68.00%
8.36%
10.64%
Market Share Percentage (2017)
Premiere Insulin
Rider
Miami Diabetes
Other

19. Revenue Trends
$0.00
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
$3,000.00
$3,500.00
$4,000.00
$4,500.00
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Revenue(Millions)
Years
Annual Company Revenue
Premiere Insulin Rider Industries Miami Diabetes Care
$4.00 $4.20
$4.41
$4.63 $4.86
$5.11 $5.36
$5.63 $5.91
$6.21
$6.52
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenue
($USDBillion)
Year
Projected U.S. Insulin Pump Revenue
(2015-2025)

20. Financial Metrics
Net Present Value (NPV)
Internal Rate of Return (IRR)
Payback Period
Market Share Growth

21. Net Present Value
444
428
426
419
423
441
405
410
415
420
425
430
435
440
445
450
Silver, Small,
Std/Adv, Part.
Silver, Small,
Adv, Part.
Silver, Small,
Std/Adv,
Std/Part.
Bronze, Small,
Std/Adv, Part.
Bronze, Small,
Std, Part.
Silver, Small,
Std, Part.
NetPresentValue
($USDMillion)
Strategy
NPV Comparison

22. Internal Rate of Return
37%
33%
38%
36%
37%
38%
30%
31%
32%
33%
34%
35%
36%
37%
38%
39%
Silver, Small,
Std/Adv, Part.
Silver, Small,
Adv, Part.
Silver, Small,
Std/Adv,
Std/Part.
Bronze, Small,
Std/Adv, Part.
Bronze, Small,
Std, Part.
Silver, Small,
Std, Part.
InternalRateofReturn
Strategy
IRR Comparison

23. Payback Period
3.44
3.32
3.75
3.66
3.80
3.55
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Silver, Small,
Std/Adv, Part.
Silver, Small,
Adv, Part.
Silver, Small,
Std/Adv,
Std/Part.
Bronze, Small,
Std/Adv, Part.
Bronze, Small,
Std, Part.
Silver, Small,
Std, Part.
PaybackPeriod(Years)
Strategy
Payback Period Comparison

24. Conclusion
Company
Deliverables
Affordable,
high-
quality
pump
Employee
well-being
Profitable
Innovative

25. Appendix

26. Strengths
• Acquisition of Miami Co. and its
accurate dosing technology
• Internal Funding for projects at low
interest rates
• Distributing networks in
Pharmaceuticals, Medical Devices &
Consumer Products
• Balanced exposure to domestic and
foreign markets
Weaknesses
• Relatively low insulin pump global
market share (~9%)
• Pump lacks predictive dosing
technology
• SoloDose 2-piece system misaligns with
consumer needs
• Product focus over consumer focus
(Marketing myopia)
Opportunities
• Annual Growth in domestic and int’l
diabetes markets (2% & 20%
respectively)
• Create brand loyalty by satisfying
newcomers to market
• Demand for integrated and predictive
technology(i.e. CGM tech)
• Big Data created through devices
Threats
• Cultural shifts toward healthier lifestyles
may reduce long-term market growth
• Volatility of ForEx rates as market
reacts to new U.S. economic policies
• Unplanned obsolesce of R&D driven
products(3 Year Lag)
• Breaches to company data warehouses

27. Selling Expense Comparison
139.6
161.6
181.8
203
222.1
237.8
253
269.7
146
167.6
189.5
211.6
233.8
252.3
268.3
286.8
0
50
100
150
200
250
300
350
2019 2020 2021 2022 2023 2024 2025 2026
Selling expense (2019-2026)
Selling expense (partner) Selling expense (outsource)
273.1
231.8
210
220
230
240
250
260
270
280
Standard Partner
Selling Expense (millions)

28. Initial Price Comparison
Bronze Sliver Gold
Market Share High Tradeoff Low
Reasonable Price Same as Soledose Fair Too high
Profits(NPV/IRR) Low Tradeoff High
Accessibility Easy Relatively Easy Hard
Flexibility High High Low
Compete in Market Hard to differentiate
form Solodose
through pricing
Relatively easy Hard to attract
customers

29. Marketing Strategy – Cost Analysis
37%
33%
38%
33%
30%
23%
11.90%
13%
10.40%
12.30%
13.40%
16.50%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Standard + Advantage
Standard + Premium
Standard + Standard
Advantage + Advantage
Advantage + Premium
Premium + Premium
IRR and Ending Market Share
Ending Market Share IRR
444
377
441
428
360
333
0 50 100 150 200 250 300 350 400 450 500
Standard + Advantage
Standard + Premium
Standard + Standard
Advantage + Advantage
Advantage + Premium
Premium + Premium
NPV

30. The Role of Social Media In HealthCare
70-75% of internet users will go online for treatment options
and side effects
42% use social media to find out about healthcare issues
25% discussed a health related issue online
20% joined an online community or forum

31. Cost Projections
109
106
105
105
104
104
104 103 103 103
99
100
101
102
103
104
105
106
107
108
109
110
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Dollars
Year
Unit cost (dollars)

32. Cost Projections
32.87%
30.06%
32.62%
34.51%
45.85%
43.67%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Silver, Small,
Std/Adv, Part.
Silver, Small, Adv,
Part.
Silver, Small,
Std/Adv, Std/Part.
Bronze, Small,
Std/Adv, Part.
Bronze, Small, Std,
Part.
Silver, Small, Std,
Part.
ProjectCost
(%ofNetTotalSales)
Strategy
Project Costs Relative to Sales

33. 33

34. Possible Future Opportunities
An app that is connected to the device
A device that promotes healthy life style
i.e. Step counter

35. Cost Projections
35
379.79 380.21
381.80
379.79
357.52 357.52
345.00
350.00
355.00
360.00
365.00
370.00
375.00
380.00
385.00
Silver, Small,
Std/Adv, Part.
Silver, Small, Adv,
Part.
Silver, Small,
Std/Adv, Std/Part.
Bronze, Small,
Std/Adv, Part.
Bronze, Small, Std,
Part.
Silver, Small, Std,
Part.
TotalCost($USDMillion)
Strategy
Projected Costs

36. Financial Analysis
Step 1
• Fixed “Development of new product” alternative
Step 2
• Fixed “Sleek Design” alternative
Step 3
• Test Assumptions
• Exception: a. “Outsource Strategy”
b. “Premium strategy

37. Compare payback period
Trade-off between profitability and market share
NPV should be at least 400
At lease 10% Ending Market Share at 2026
Option Selection

38. Breese, Matt. “Perspectives on Influencer Marketing in Healthcare.” MMIT Blog. N.p., n.d. Web. 24 Feb. 2017.
http://care.diabetesjournals.org/content/37/6/1499
Sandrine Ding, and Michael Schumacher. “Sensor Monitoring of Physical Activity Improve Glucose Management in
Diabetic Patients: A Review.” Sensors (Basel), vol. 6, no. 4, 2016, pp. 589
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4851102/
Dexcom, Inc. “Innovative Dexcom G4®PLATINUM Continuous Glucose Monitor (CGM) Receives FDA Approval
For Use In Children Ages 2 To17 Years.” The Streer, 03 Feb. 2014. Web. 22. 2017
https://www.thestreet.com/story/12302772/1/innovative-dexcom-g4174-platinum-continuous-glucose-monitor-cgm-
receives-fda-approval-for-use-in-children-ages-2-to-17-years.html
Home, P. H., Riddle, M. R., Cefalu, W. T. C., Bailey, C. J. B., Bretzel, R. G. B., Prato, S. D. P., . . . Raz, I. R. “ Insulin
Therapy in People With Type 2 Diabetes: Opportunities and Challenges?” Diabetes Care, vol. 37, no. 6, 2014, pp. 1499-
1508
http://care.diabetesjournals.org/content/37/6/1499