Question: Please submit a Short Cycle Analysis for Case 4 1 : The Investment Proposal. All short cycles should succinctly answer the following four questions: 1
Please submit a Short Cycle Analysis for Case : The Investment Proposal. All short cycles should succinctly answer the following four questions: Decision Maker: Who is the principal decision maker? What is hisher title? And what do you know about himher and their background that is relevant to this situation? Problem Definition: What appears to be the taskissuechallengedecision for this person? Why is the company facing this issue now? In other words, why has the problem arisen? When must the decision or action be made?Read the case as if you were being asked to invest in the business. You will want clarification on a number of uncertainties in their presentationwe will call them issues. Identify issues on which you want clarification, what question you would ask, and why the answer to the question matters. caseIn early January of Manuel Pena, a venture capitalist, was attending a presentation conducted by two brothersDr. Adya Bharat and Dr Sidhu Bharatin New York City. Manuel had been invited to the meeting by Sydney Smithers, a friend of his who knew he'd been actively looking for small businesses in which to invest. Sydney, a fellow Canadian, owned two businesses: one was a nursing home and the other, Durable Medical Equipment DME sold medical supplies for elderly people, including such items as walkers, canes, and special toilet seats. Sydney and the Bharat brothers were hoping Manuel would agree to invest $ in their business proposition.Sydney had gotten to know Adya while they were graduate students together at a major Canadian university. Adya had earned a PhD in neuroscience there, and when he subsequently obtained work with a company that developed artificial human organs, he moved to New York, where its research facility was located. He was later joined there by his brother, Sidhu, who'd recently completed a PhD in aeronautical engineering and had gotten a job building mathematical models for a big drug company in the city. His models amalgamated statistics on patient responses to a range of drugs so that doctors could better achieve their clinical intent when prescribing medication.All three had since come together with the idea of providing an integrated medical service. Their original plan had been to target the US market; given that the United States lacked public health insurance, the business would help individuals determine what medical treatment they could afford. Providing the service required first compiling medical records and personal financial information electronically; an adviser would then use this information to recommend a course of treatment. However, after spending $ developing the programming, the three had concluded that their idea would be too difficult to implement in the United Statesgovernment regulations and legal issues there had proved too challenging. So they turned to their birthplace, India, in search of opportunity. The Bharat brothers had since established their business in the city of Pune.THE PROPOSAL"This is a great time to expand in India," Sidhu said. There's no such service there, since of health care is private pay. And Pune is the best city to do it in Plus, by being first with our service, we'll be better able to establish our reputation. Any competition that may come along afterward will simply help sell our service to customers.""Pune is known as the Oxford of the East because of its educational institutions," Adya put in "But it also has well established manufacturing industries. We grew up there, but since then it's changed completely. It's grown tremendously as more people have moved to the city to work with companies that have set up operations in information technology and automotive manufacturing.Pune's population is now million, and it has the highest per capita income of any city in India higher than India's average income."The need for our service stems from the increasing mobility of Indian society," Adya continued."Young people used to live with their parents and support them. Now they're moving to Pune and other cities for highpaying jobs that have them working hours a day. Since they're no longer living with their parents, the parents have had to become more selfreliant."We realized the need for this service because of our own parents' situation. Our father is and has diabetes, and our mother is and has cardiovascular problems. We were paying an agency a monthly fee to send a nurse around once a week, but we got worried when we'd talk to them. They seemed to be becoming ever more depressed. I went home and discovered that we weren't getting the medical care we thought we were paying for the socalled nurse was just doing housekeeping.This is a common problem in India: you don't get what you think you're paying for."Six months ago I started our business in Pune, and began by serving our parents. I hired a registered nurse who visits our parents once a weekshe takes them for walks, talks to them, and provides therapy. She also takes them to see their respective doctors every month.""I used to dread talking to my parents," Sidhu added. "They seemed really unhappy. But now when we talk to them we can tell they're in good spirits, and we know their medical needs are being met.""When I saw other people in Pune with circumstances similar to ours," Adya resumed, "I knew our business had potential. So I went out and hired a manager, who used to work for a notforprofit organization that helped young girls escape from prostitution. He's now sold our service to four other families. We're charging $ per month for itand given that Pune's average per capita income is $ per month, this isn't expensive. Plus, we're in the process of getting government certification, which will guarantee to potential customers the quality of care the company provides.Unfortunately, government services move slowly in India, so getting the certification is taking much longer than we expected.""Nonetheless," said Sidhu, "our service is meeting with great success. Just the other day our manager told us that one of our customers came in to pay ahead of time because he was so pleased with what we were providing his parents." Sydney, who'd so far been silent, now spoke up with obvious excitement. "And the great thing is that people will need DME. Right now there's so little awareness of what's available to help patients. We should be able to sell lots of equipment once people become aware of what we can offer. To grow this business in India, we're looking for a total of $ from three interested investors. Do you have any questions?"THE DECISIONManuel reflected on what he'd heard. As the presenters spoke, he'd noted various issues.Now he had the opportunity to ask for clarification and further information before he committed to making a decision. He knew, though, that the three men expected a firm answer.
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