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launch stage to growth stage

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › launch stage to growth stage

  • This topic has 2 replies, 2 voices, and was last updated 8 years ago by mansoor.
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  • October 30, 2016 at 2:43 pm #346682
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    goode evening

    “Beta is a drug used hospital treatment of serious infections. it is a very specialized drug, and cannot be obtained from a doctor or a pharmacy for use outside a hospital environment. it was launch only 3 months ago and has yet to generate significant sales volume.

    the directors can invest in Beta to promote it, which should lead to significant growth in sales of Beta. however, there is a competitor who is actively promoting a rival product with similar performance to that of Beta”

    we are asked to evaluate the potential impact of investment in beta.

    i made an extra point that the answer did not mention and i want to know if this is valid:

    My Point: that beta is a niche product and even if takes the market share as desired by the company, it may not have the volumes and thus may not support the product portfolio in terms of cashflows or profits.

    thanks

    October 30, 2016 at 4:31 pm #346723
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10597
    • ☆☆☆☆☆

    Might be true and is certainly a valid point. However, many drugs are niche products for rare diseases. They are priced accordingly otherwise they would not be developed.

    October 30, 2016 at 5:47 pm #346729
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    ok… thanks

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