ie application question d change in taiwan business
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IE Admissions Question D.Cite at least one example of when your leadership had an impact on or changed a certain situation, and justify how an IE Master’s Degree program would help you to strengthen or improve this competence.
1
“It is not the strongest of the species that
survives, nor the most intelligent that
survives. IT IS THE ONE THAT IS THE
MOST ADAPTABLE TO CHANGE
Charles Darwin
2
This presentation introduces my work in the
DIALYSIS Business, when we adapted
successfully to market changes
3
1. Background
2. Planning
3. Challenge
4. Results
5. Towards the Future
Agenda
4
Background
Dialysis Market Analysis• Price decreasing policy makes it difficult to survive without wide product range
Company
Customer(Market)
Competitor
• 30 years partnership with Company A (20% Shareholder)• Only focusing on a certain Dialysis Product (Dialyzers)• Best quality dialyzers in the market
• Dialysis treatments make up 7-8% of Healthcare care costs• Government`s policy of decreasing Healthcare reimbursements• “Price focus” by the hospitals and doctors
• Direct sales• Wide product range for dialysis treatments• Various ways to fulfill customer`s “price focus”
(e.g., acquiring hospitals, machine free lending)
5
Decreasing
Market share
Lack of the next generation CEO in Company A
Difficult to change the distribution
structurePoor Product
Portfolio
Background
Overview of the market problems• Three problems clearly required resolution
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Background
Lack of the next generation CEO of Company A• Founder of our distributor was 65 years old and he did not have any plan
for the next generation
Foster his sonas a successor ?
Vertical Integrationwith the manufacturer ?
Horizontal integrationwith the competitors ?
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Background
Difficult to change distribution structure• Holding 20% share of Company A
Investing 20% in the past
Makes it difficult to change the
relationship with Company A
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Background
Difficult to change distribution structure• Unable to sell the low-profit holding stocks of Company A
COSTS BENEFITS
ROI 2%PRIVATE INVESTMENT
(2M USD)
RETURN(40,000 USD)
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Background
Difficult to change distribution structure• A dramatic change of the distribution structure would lead to Company A`s bankruptcy
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The dramatic change of the distribution
structure….
Would lead to Company A`s bankruptcy….
…And make our shares worthless.
Background
Poor Product Portfolio• Price strategy was difficult due to the lack of revenue sources
Company A
Dialyzers
Our Competitor
Dialyzers Needles Tubings Medicines Machines
Isolated Offer
Package Offer (spreading the profit source)
Sales
11
Planning
Scenario Options• I led internally to brainstorm the strategic options by using 2 × 3 matrix
Distribution Structure
Pro
du
ct p
ort
folio
of
ou
r co
mp
any
No
Ch
ange
Wid
er
No Change Focus Others Direct Sales
-Increase Product range by ourselves and sell to Company A
-Increase Product portfolio by ourselves and emphasize other distributors
-Increase Product portfolio and sell by ourselves
-Start direct sales with the current Products
-Acquire company A
-Start business with other distributors who have wider product portfolios
-Try to fight with the current structure
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- Increase Product portfoliosand sell by ourselves
- Acquire company A
- Increase Product portfolio and emphasize other distributors
- Increase Product portfolio to company A
- Try to fight with the current structure
- Start direct sales with the current product
Imp
acto
fth
eScen
ario
Reality of the Scenario
High
Low High
Scenario Options• I reviewed the options and identified three possible options
Planning
Impact of the Scenario = The risk when we did not cover the scenario
- Start business with other distributors who have wider product portfolios
✔
✔ ✔
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Scenario Decision• I facilitated the discussion to decide “Option A” would be the best way to fight in a
mature and price decreasing market
Planning
Scenario Options Advantages Disadvantages Key issues
A. Start business with other distributors who have wider product portfolios
• Increase sales options to customers
• No successor problems
• Risk to lose customers
• Possibility to sell out the shares of Company A
B. Increase Product portfolio and sell by ourselves
• More flexible access to the market
• Non established sales forces
• Calculate the profitability to start direct sales from Zero basis.
C. Acquire company A • Customers and organizations
• Limited product portfolio
• Only 5% share in the market
• Negotiation for additional investments
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Detailed plan• Try to sell the 20% stock by concluding a 5-year exclusive distribution contract with a new
distributor (which is also a shareholder of Company A)
Planning
MyCompany
New Distributor
Company A
New DistributorCustomers
Company ACustomers
+
+
1. Sell 20% share of Company A
Already holding 14% share
+20% Share
Distribution flow☓
2. 5-years exclusive distribution contract
&Package
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Change
Project Management• I led the project, including on the key issues
Project Leader (Me) Project Milestone Negotiation
Legal AspectsFinancing
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Change
• Figuring out the conditions so that parties can achieve a win-win opportunity
• Negotiating with the distributor together with the Taiwan subsidiary CEO
• Identifying the reasonable price to sell Company A shares
• Confirming with the finance team and obtain internal approval
• Drafting the contract with the new distributor
• Checking legal aspects to sell the shares
• Finalizing the contracts with the legal team
Negotiation Financing Legal Aspects
March-June July 1st
Cleary state the requirements and set up a deadline
Project Milestones• I created a clear schedule and Milestones and shared it with the related depts
• Also gathered and led various departments to meet the tight schedule
Push Push Push
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Change
Negotiation• The negotiation was concluded in a win-win situation by resulting to conclude
a long term “Exclusive contract” with private branded products, in exchange for selling out our holding share of Company A
Pri
ori
tyP
riority
Our Company New Distributor
Increase the market share with more stable distribution structure
Conclude a “Long term exclusive” contract with our company
Sell out the holding shares of the Company A
Obtain private label brand products
Flexibility to change the distribution channels
Diversification of the product from various companies
Sell products with our own brand Purchasing the shares of Company
A
High
Low
High
Low
Win Win
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Change
Financing• I collaborated with the financial team to identify the reasonable price to sell the
Company A shares
Assets
Liability
Dividing the Equity Amount by the Total No. of outstanding shares
Calculating the Present Value of the accumulated profit for next ten years
>Higher Price
PV=
D1
(1+K1)+
D2
(1+K2)2・・・
D10
(1+K10)10+
L
(1+K10)10
D1… D10= Annual profits estimationK1… K10= Discount rateL = Remaining Value of the distributor
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Change
Legal aspects• I drafted several contracts and led the internal communication with various
departments, in addition to the negotiation with the new distributor
Drafting
Legal Affairs
Taiwan CEO
Director of the distributor
Communication
Feedback
Feedback
Communication
Basic Knowledge of international contracts
Basic Knowledge of international trading
Considering how to manage the counter offers
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Results
Adapting to Change
• Increased the sales quantity from 1.2M pcs → 1.3M pcs• Created more stable environment to expand in the future
• Managed the project within the deadline
• Sold the 20% share of company A with profits of 200,000 USD
• Ousted competitor`s product by providing private label Dialyzers to new distributor !!
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Towards the Future
Summary of my competencies in this experience
Strategic thinking skills Basics of finance Basics of international contracts
Team-building experience Strategic negotiation Internal communication
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Towards the Future
What I need to become …
Global Strategistin Medtech industry
Strengthen my strategic thinking skills to create business plans in healthcare industry
Strengthen my financial skills in order to effectively calculate the impact of the investments
Improve my team-building and communication skills to manage people in different locations
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How IE`s Executive MBA+ can help
What IE and other TOP Schools have
Case study Fundamental study
Why IE is Excellent
Strengthen Multi-Cultural Communication & Healthcare Focus
Outstanding Faculty
Enhance Knowledge & Strategic Thinking
Diverse nationalities improve my cross cultural communication skills
Blended Format is the best way to experience building up teamwork at distances
Healthcare+ module matches my will to focus on the HEALTHCARE industry
• IE Executive MBA is the best program for my career progression, especially because of its unique blended format and high international component
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By entering the IE`s master program,
I WILL BE THE ONE THAT IS THE MOST
ADAPTABLE TO CHANGE
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