SMS for Life Changellenge>> Cup Russia 2013
TurboBoys Svyatoslav Dulyaninov Artemiy Zamaletdinov Artem Kasatkin Anton Boyko
1
Summary
Social aspects
New markets
Best practice
Management
Resources
The initiatives proposed will allow to solve all the current problems and increase the competitiveness and social view of the company by taking all the benefits from SMS for Life project 1
Objectives 2
Initiatives
3
Find the resources
4
5
Set up organizational structure in Novartis for its own benefit from SMS for Life Decide on roles of IT and Business management in Novartis
1
Informing society about the malaria problem
2
Penetrating new markets of Africa
2
Implementing proven methods and techniques successful in Tanzania
4 5
3
Year
Company position
Sales volume
TurboBoys
Sustain the social value of SMS for Life Develop the competitive value of the SMS for life system to enhance sales in emerging markets
Forming a new department and stating its duties Cooperation with universities, sponsors, telecom and NGO 2013
Presence in 5 countries with the project and in 15 with subdivisions $51,000,000
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2016
Presence in 11 countries with the project and in 30 with subdivisions $121,000,000
2
Summary
Social aspects
New markets
Management
Best practice
Resources
Informing society about the malaria problem proactively will improve SMS For Life’s image of a visible commitment to corporate social responsibility The global number of malaria deaths is driven by the pattern seen in Africa…
1
Malaria deaths by regions
Age of death, 2010
37%
Af rica
90% 56%
Rest of the world
2
Number of malaria deaths
7%
On the global scale Af rican continent is af f ected by malaria the most, especially children
+130%
1 613 000
1 133 000 493 000
From 5 to 15 years Under 5 years
3
The number of deaths has decreased but only reinf orced use of services like SMS For Life can eliminate the problem completely.
-30%
Over 15 years 10%
…and solving a supply chain problem with stock-outs will help stomp off malaria
1980
Raising awareness of the general public will sustain social value…
4
2004
2012
…by doubling the number of people acquainted with the issue
Projected awareness level growth, million people
1
Social value will be sustained if Novartis’s activity is widely recognized
2
Novartis saves lives and completes the fourth Millenium Development Goal (reducing child mortality)
600 500
3
The work the company does is for the humanity’s good and is undoubtedly of great social value
4
People will get to know the company’s contributions to society by getting to know the malaria problem better
400 300
518
200 100
Raising awareness of negative impact of malaria is the solution
Fundraisers, concerts Collaborating with NGOs* Celebrities and politics Social network making campaigns statements (Facebook, Twitter)
250
300
360
432
*NGO – nongovernmental organizations
0 2013
2014
2015
Sources: case data, the Lancet research, team estimates.
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3
Summary
Social aspects
New markets
Best practice
Management
Resources
Upcoming challenges force Novartis to penetrate new markets as fast as possible to sustain commercial value 1
There are 6 countries with enough mobile coverage and most malaria and TB cases 1…
Country
Cases of malaria per mil
Zambia
Cases of tuberculosis per mil
1,3
Gambia
1,5
Mobile Coverage, %
… where within 3 years we plan to launch the following services in pilot projects… Gabon (Mar 2016 national)
Gambia (Aug, 2014 pilot) 38 Facilities, 5 districts -
2,9
3,3
Benin
2
2,3 3,5
1800 Facilities,96 districts
4 Antimalarials RDTs 2 Anti TB: Pa-824 Malaria surveillance data
- Anti TB: Pa-824 - TB surveillance data - RDTs Zambia (Sep, 2015 pilot)
Benin (Apr, 2014 national)
52 Facilities, 6 districts
2600 Facilities, 98 districts
South Africa
0,2
Botswana
0,2
Gabon
0,1
4,6
-
- 8 Antimalarials - RDTs - Blood products, Bed nets
5,0
South Africa (Apr 2014 pilot) 97 Facilities, 11 districts
4,5
Botswana (Nov, 2015 pilot)
- Anti TB: Pa-824 - TB surveillance data - RDTs 1
3
See Appendix 1 for thorough analysis
2
9 Antimalarials Anti TB: Pa-824 RDTs Bed nets
90 Facilities, 6 districts
- Anti TB: Pa-824 - TB surveillance data - RDTs
Rapid Diagnostic test
…that are vital for securing our presence in Africa due to an upcoming challenge…
As Coartem will no longer be protected by exclusive rights to market af ter April 2016, Novartis needs to capture all possible markets in Af rica as soon as possible
Novartis needs to: • Establish highly ef f icient supply system of drugs to hinder competitors penetration • Provide governments with valuable results through new services • Advertise Sandoz subsidiary that produces generics to establish goodwill in Af rica in the next 3 years
Low presence
Novartis 2016
Strong goodwill Lack of goodwill
High presence
Novartis 2013
Sources: case data, globalhealthf acts.org, itu.int, team estimates.
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4
Summary
Social aspects
New markets
Best practice
Management
Resources
The experience of successful implementation of “SMS for Life” will allow Novartis to gain competitive edge in expanding and maintaining superior positions on emerging markets 1
Particular advantageous features of the project made it possible to fulfil all the objectives with exact goals of…
1
Low costs (annual cost not exceeding $100 per health facility)
2
Flexibility (possibility to track several drugs)
3
The effect of scaling (easy transmission from pilot to national level)
… improving stock management thanks to increased transparency and simpler communication…
2
100
Week 1
80
Week 21
4
Several sponsors involved and sundry consumers using
60
5
Easy staff training
40 Objectives
Result
-49%
57
All districs (129 health f acilities)
… and increasing response rate, which resulted in favourable rate of provision
Average response rate at the pilot
% of facilities with no stock of Coartem
Response rate, % 100
4
Sides involved in the process
140000 120000
26%
Government
3
6
9 12 15 18 21
PA-824* sales * TB drug
+32%
0,8% 1 week 21 week
+18%
80000
Partners
0
Kigoma Rural (51 health f acilities)
100000
-97%
85
Week
Ulanda (48 health f acilities)
Sales volume in Africa by drug grade, ‘000$ Organic growth
Investors
3
80
3
Coartem sales NGO1
2
90
Lindi Rural (30 health f acilities)
2
Therefore, the experience will secure success in “SMS for Life” and revenue growth in other states
1
95
47 22 1 0
To prove the effectiveness of a public-private partnership model
3
-100%
24
0
To implement data-gathering infrastructure simply and in remote locations
93
87
77
20
Reduce stock-outs, thus improving access to drugs
-75%
-69%
1. Non governmental orgs.
+14% 60000 40000 2012
2013
2014
2015
Sources: case data, novartis.com, Malaria Journal, TB Alliance, team estimates.
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5
2016
Summary
Social aspects
New markets
Management
Best practice
Resources
Specified duties of Novartis management and its competently formed department under current circumstances will allow the company to reap benefits from the project 1
The challenges Novartis faces now define the following transformations within the company such as…
Internal factors
• •
•
3
2
External factors
Jim Barrington is retiring in 2013 No transparency inside the company concerning the program Not much use f or the benef it of a company
…direct involvement of IT and Business management in the process chain hand in hand… IT Department* Business Department
•Expiration of exclusive right to sell Coartem in 2016 •Instable partners •Complex negotiations with governments •Intense policy of competitors in Af rican region
Necessity of f inding solutions by alterations in approach
1 Production
2 Estimations 3 Delivery to of the African amount state needed
*IT dep. will be involved in all the steps as it is inevitable, while business part does not comprise production
4 5 Transportation Delivery to to a hug a health (waarehouse) facility
SMS with information about 6 the stock situation
… with a special department to monitor “SMS for Life” and solve the major problem of sustainable development by expanding Sandoz coverage Sandoz penetration onto Africa
All the activities monitored and directed by the Department
2 1
4 3
6 5
•Monitoring every section of value chain •Organizing connections with partners on mutually beneficial terms and maintaining them •Assisting Sandoz and according initiative of promoting this provider •Furnishing “SMS for life” service to concerned institutes
2013
This initiative will allow to: • decrease operational costs • increase ef f iciency at every stage of the process • f ound f ruitf ul cooperation • develop the core business in Af rica
Number of states with Sandoz:
2016
Sandoz subdivision Rep office or trade alliance
2012 2016 Subdivisions
4
15
Rep offices or trade alliances
11
15
No bonds
39
24
Theref ore, Novartis will strengthen its positions in Af rica by its subsidiary Sandoz
Source: case data, novartis.com, sandoz.com, team estimates.
TurboBoys
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6
Summary
Social aspects
New markets
Management
Best practice
Resources
Concerning new issues for the company and the new initiatives proposed, we consider involving the following partners for the needs of the project 1
SMS for Life needs partners in Sourcing & Production… SMS for Life Value chain
Partners
… and current funding for disease control worldwide…
2
International funding for disease control, US$ mln 4800
Research & Development » 4600
*As 70% of esential components are imported from China and Vietnam
Sourcing & Production* »
Global fund 1930
1850 AMFm DFID
Access »
PMI
Distribution »
Governmental funding
Global fund
Capacity building »
2012
2013
Malaria Impact evaluation » 3
Value for Novartis
Funding
Supply chain
Human Resources
Inf rastructure
New projects in Africa
Implementation
2013
Tuberculosis
AMFm – Affordable Medicines Facility; DFID – Department for International Development; PMI – Presidential Malaria Initiative
… we recommend to cooperate with companies in the 3 following fields…
Initiatives
2012
4
… to reach the following financial effect:
Effect by 2016, SMS for Life contribution MTN, Airtel Google
Total Sales Growth
Cooperation with universities and volunteer programs
-Coartem sales growth
25 $mln
-Pa-824 sales growth
38 $mln
New markets African artemisinin suppliers
63 $mln
Awareness level
6 + 268 m. people
PMI
Source: World Malaria Report 2012, Global Tuberculosis Report 2012, team estimates
TurboBoys
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7
Anton Boyko
Artemiy Zamaletdinov •MGIMO 3rd year •Start-up experience •zamaletdinovartemiy @gmail.com
•MGIMO 3rd year •Semi-final Changellenge Cup Moscow •anthonyboyko@ gmail.com
Artem Kasatkin •MGIMO 4th year •Fincontest ’12 – 1st place •FinOpen’12 – 2nd place •Ernst&Young Intern •kasatkin.artem@ yandex.ru
Svyatoslav Dulyaninov •MGIMO 3rd year •Finalist of many case competitions •dulyaninov. svyatoslav@ gmail.com TurboBoys
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8
Summary
Social aspects
New markets
Best practice
Management
Resources
Appendix 1 Mobile coverage, % and number of malaria and tuberculosis cases per mil
Many cases of Tuberculosis
Many cases of Malaria
South Af rica 100
Botswana
Gambia
Gabon
90
Ghana
Gambia
80
Zambia Kenya
High Mobile Coverage
Benin
70 60 50 40 30 20 10 0
0
1
2
3
6
-10
-4
-3
0
Sources: case data, globalhealthf acts.org, itu.int, team estimates.
TurboBoys
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9
Summary
Social aspects
New markets
Best practice
Management
Resources
Appendix 2 Future use of SMS For Life is accompanied by certain risks that can be managed efficiently Risk
Management strategy
Cruciality level
Lack of government support
Making an agreement with governments ready to implement a f ull roll-out of the project, sign a cooperation contract f or a determined number of years
high
Expiry of Coartem exclusive production rights
Establishing goodwill and supply system f or Sandoz to hinder f uture competition
high
Insuf f icient f inancial support
Project launch delay if f irm partnership with investors isn’t established
high
Jim Barrington leaving the post
Setting up a new department responsible f or managing the system
medium
Failure of direct involvement of IT and Business management in the process chain
Perf ormance of regular ef f iciency audit
medium
Insuf f icient cellular network coverage
Thorough study of mobile network f acilities of each country
medium
Inef f iciency of the system in new countries
Regular reporting about troubled regions
TurboBoys
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low
10
Summary
Social aspects
New markets
Best practice
Management
Resources
Appendix 2 Future use of SMS For Life is accompanied by certain risks that can be managed efficiently
Critical risks 3
Lack of government support
2
Expiry of Coartem exclusive production rights
3
Insuf f icient f inancial support
Высокая
1 2
5 Средняя
Level of impact
1
4
6
Serious risks
4
Jim Barrington leaving the post
5
Failure of direct involvement of IT and Business management in the process chain
6
Insuf f icient cellular network coverage
Низкая
7
Insignificant risks
7 Low
Medium
Inef f iciency of the system in new countries
High
Probability
TurboBoys
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11