Первый раунд turboboys

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

CL >> Cup Russia 13

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.

TurboBoys

CL >> Cup Russia 13

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.

TurboBoys

CL >> Cup Russia 13

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.

TurboBoys

CL >> Cup Russia 13

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

CL >> Cup Russia 13

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

CL >> Cup Russia 13

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

CL >> Cup Russia 13

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

CL >> Cup Russia 13

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

CL >> Cup Russia 13

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

CL >> Cup Russia 13

11