As Determinants Of Competitive Advantage - Myassignmenthelp.Com

Question: Discuss About The As Determinants Of Competitive Advantage? Answer: Introduction PBS is one of the largest areas in the health sector. The cost of PBS is high and rapidly growing. The problem is whether the PBS remains sustainable at the available cost and if not what measures of cost control are necessary for continued operation. In our report, we will give a business case on an initiative of pharmaceutical schemes and medicine consumption. This is to ensure that the scheme achieves medication and other related services. This will help in achieving economic development and optimal outcome for the health sector. Objective of the project The objectives of PBS are to: To determine if increasing co-payments for concessional patients and general patients makes the project viable To determine the trends in relation to PBS growth. To identify drivers of PBS growth. To determine if increased safety income thresholds more than inflation will benefit the business (Armenakis Bedeian , 1999). Rationale of the project The government is offering subsidies on expenditure on medicine. However, following the current changes on the PBS expenditure, cost of medicines has become expensive and the government is unable to finance most of the costs are left to the community. Considering current changes in the health sector, cost of medicines has become expensive and the government is unable to finance. The aim of these changes is to help the government by reducing the cost of subsidies they pay to pharmacists and discouraging the doctors to prescribe expensive drugs if there alternative drugs and therapies that can be used (Burke, 2008). Therefore, PBS wants to increase Co-Payments for concessional patients and general patients and increased safety income thresholds more than inflation. Other factors that have led to the growth of PBS is an aging democracy, expensive drugs, sources of finance, time and human resources. The government is out to finance these changes. Therefore the report aims at analyzing the budget in order to determine the viability of the project. Requirements of PBS This is the issues managers should consider before starting a project. This shows challenges that decision-makers should consider before deciding on a project and who to seek financial help having the desired outcome in mind will help make an action that will have more benefits than others. Time schedule This shows all activities scheduled that must be achieved within a specified period of time prior to the date of commencement. It shows when the outcome needs to have been generated. Managers should consider enough time for planning. This will make them decide on a project that will yield more profits (CHF, 2010). Project budget This budget allows an evaluation of the new investment. All items of interest must be captured in their project. The budget template will have information about income and information on the cost of expenditure. This will direct us on making the right decision. It will help us calculate possible profits that are expected to be gained from the project. Consider the financial support by stakeholders when needed. The sources of finance could be contributions or shares and loans. Human resource This involves information on human activities and all resources of use in achieving those activities. This involves payment of staff, training, and bonuses. Consider who will ensure the assets of the company are properly managed for the smooth running of the business. This department should ensure it decides on the right people for the right job (Carnall, 1999). Return on investment This is used to measure the amount generated from the activities of investment.it is a value to an investor as a result of investing in a new project. It measures the efficiency and evaluates the project by analyzing different investment projects. The desired outcome is to determine a viable business to invest. It will help to have more recruits on PBS and generate more profits by selling more PBS drugs. PBS drug Medicines must be assessed on safety, efficacy, and quality by ADEC. If the drug is recommended by ADEC then it should be made for sale in pharmacies in Australia. The company selling the drug must be evaluated by PBAC on the PBS. PBAC analyzes the effectiveness of the drug i.e. cost effectiveness. They advise the MOH and aged care if the medicine is to be listed on PBS (DoH, 2009). After MOH accepts the drug recommended by PBAC the medicine is referred to PBPA to negotiate the price which will be on the PBS with the manufacturer. Finally, the PBPA advice the MOH. Eligible persons for PBS Those eligible for the PBS drugs are Australian residents, visitors from other countries that have health care agreement with, refugees, pensioners, low-income earners, beneficiaries and commonwealth seniors. They get HC cards from Centre link to allow them entitlement to the scheme (Egan, 2007). Sponsorship From Koen (2005), this refers to the act of financing or supporting an event, person, activity, or a project in an organization they are used to increase awareness, propensity to buy and financial support. Companies can succeed by the help of celebrities to do campaigns about the new project on social media platforms success is achieved when there is a good relationship between the organization and sponsor. Stakeholders They assist to plan for a promotional pricing strategy to use regularly in order to increase sales volume. They make plans to employ competitive pricing strategy that will help them compete favorably with its rivalry. Stakeholders have plans to finance campaigns plan the project in social media platforms e.g. blogs and youtube in order to increase customer base. They make plans on who to use e.g. use of celebrity who have had famous personalities to act in their adverts of new projects. Several images should be used to catch the attention of customers. This will enable the company to increase sales as well as sales for them to get huge profits (Government, 2003). Sources of PBS costs PBS expenditure is not financed by government and therefore, it is prescriber based. Expenditure is examined at the end of financial year Causes of high PBS Increased in aged persons who have chronic problems and benefits from the drug. The roles carried out by aged people are limited because they cannot work and therefore their income is low. PBS expenditure has risen up due to increase in the price of drugs. This affects the total cost of PBS. The increased cost of drugs. There are effective and new drugs available in the market but then they are expensive. Pharmacists have a challenge of prescribing few, expensive and new drugs and tests. The budgeted expenses are $57240 on physical tests, $ 45000 on glucose test, $ 21000 urine test and $ 18000yearly costs giving a total of $141000. PBS wants to provide medicines that are cost saving and cost-effective on health care services and other related resources (Hambrick Cannella , 1989). Inappropriate prescribing. This is because of lack of accurate, timely and clear information on effective use of drugs, promotional incentives, and misleading information making Pharmaceutical industries to spend more money on the drugs. Pharmaceutical costs. This includes costs of the pharmacy that arise due to daily activities. They include: Staff expenditure These are expenses that arise due to PSB cost on staff, training of staff, employing extra staff, staff motivation and incomes of staff. Currently, the total expense is approximate $ 381600 (Koen, 2005). Administrative expenses This involves costs of administration that the company supports. It involves approximately $116000. Rent expenses These are expenses due to using a premise. It is approximate $60000. Increase in preventive drugs. People are more aware the value of secondary and primary disease prevention and the role of drugs for each treatment. PBS wants to provide medicines that are cost saving and cost-effective on health care services and other related resources. The demand for the product is determined by the number of attitudes of consumers, pricing, availability, disposable income and investment income and population. Unemployment creates a reduced disposable income and wages leading to recession. This caused profitability and revenue to decrease. Increase in disposable income improves the economy and company at large. This increases market revenue thus increasing the profitability of the organization (Kotler Armstrong, 2008). Attitude concerning their health determines the demand of the product. There is a shift in diet and healthy eating among customers. This is a potential threat as consumers become aware of the problems related to obesity and weight loss. Menus have changed towards the use of healthy flavors. Inappropriate prescribing. This is because of lack of accurate, timely and clear information on effective use of drugs, promotional incentives, and misleading information. This makes the Pharmaceutical industries to spend more money on the drugs. PBS wants to provide medicines that are cost saving and cost-effective on health care services and other related resources. Inappropriate prescribing. This is because of lack of accurate, timely and clear information on effective use of drugs, promotional incentives, and misleading information making the Pharmaceutical industries to spend more money on the drugs (Kotler Armstrong, 2008). Co-payments of Patient The government provides subsidies on the cost of acquiring medicine through PSB. The requirement is that beneficiaries make co-payments. Currently, patients revenue has been increased. Some costs are facilitated by the government. For each patient, co-payments are deducted from those who spent within their PSB threshold. Co-payments by patients contributes to about 16% of revenue approximately $782000. Many people are paying low co-payments leading to high PBS costs. PBS benefits were improved calling for a high cost of PBS (Mathur, Jugdev, Fung, 2010). Payments for concessional Payments for concessional patients and general patients are expected to increase. It has increased safety income thresholds more than inflation. The pharmacy has decided to increase payments for concessional and general patients since the government will not finance these changes. Currently, PBS expenditure is $730528. The GDP for PBS is expected to grow rapidly. This is represented by $ 487000. The rest will be financed by the government. Pensioners get an allowance to settle prescriptions of PBS. Currently, the allowance is at $2.8 per week paid regardless of the number of times prescriptions are made. Break-even analysis BEA BEA is a tool used to discover when the project will cover its expenses. It shows a point where the companys profit will start flowing. This is determined when the income is more than the expenses illustrated as: BEP = income- expenses It is crucial for the company to identify initial costs, costs of consumables and human resource costs (Ohmae, 1982). Financial analysis Income Budget Patient revenue $172,000 Yearly cost of medicine $110,000 Yearly cost of surgery $200,000 Yearly medical test $300,000 TOTAL $782,000 Expenses Budget Staff cost 10* nurses at 35*8*5 $168000 2*Nurses at 50*8*5 $48000 5*GP at 45*8*5 $108000 2*GP at 60*8*5 $57600 Physical test*6*30*10*5 $57240 Glucose Test*6*15*10*2 $45,000 Urine Test $21,600 Yearly cost $18,000 2000*4 88,200 water 3000*4 Electricity Admin Support 5000 Per week Rent $60,000 $730,528 Financial analysis Sustainability will depend on the subsidies. The question is whether the government will be able to fund an increase in the cost of co-payments. The policy of the government does not allow then the project is not viable. Like in our case the government withdrew from financing the changes. Sustainability of PBS is not only dependent on the cost of drugs but also the political and public willingness to sustain them at whichever cost. The company should consider the amount of revenue invested in the new changes to PBS and the cost of spending involved. Spending involves what it buys and what it pays for the company. PBS is sustainable if the outcome is positive (Ruhumar, Turel, Ofir, 2005). When the cost of PBS is high due to the high cost of drugs, this relates to the fact that expensive drugs are always of good quality and its effect fullness. On the other hand, poor quality and ineffectiveness may lead to low cost of PBS which may not be appreciated by those who value quality as their need. Therefore considering quality and the benefits that accrue from the drug the company should invest in the new project so that those who value quality should benefit from the scheme (Saunders, Lewis, Thornhill, 2007). PBS will be considered expensive if the expenditure cost is higher than the income generated. On the other hand, PBS is sustainable if the cost of expenditure is less than the income making the company break even. BEP = income - expenses Our income is $782000 and expenses is $730528 Thus BEP = 782000-730528 This gives a profit of $51472. For our case, the decision making action is to invest in the new project since the PBS cost of expenditure is less than income cost making it break even at $51472. Management risks Cost of medicines has become expensive and the government is unable to finance most of the costs are left to the community. Factors such as aging population increased awareness and the high cost of drugs related. They affect the community, eligible persons, and the company. Some drivers can be achieved without affecting beneficiaries e.g. preventive drugs. Some methods of containing the cost of PBS differ but will only be appropriate if the PBS expenditure is low (Thompson, Strickland, Gamble, 2010). Any project that results in a high cost of implementing causes a high cost of subsidy results in withdrawal by the government to finance such costs. Considering current changes in the health sector, cost of medicines has become expensive and the government is unable to finance. Therefore, PBS wants to increase Co-Payments for concessional patients and general patients and increased safety income thresholds more than inflation. This affects the users and prescribers which causes the risk of over-utilization. Some people may feel the cost is too high for them to prescribe to the PBS. This makes the business unsustainable. There is competition between companies arising from new and expensive drugs so that they are made PBS centers. There are high levels of expenditure on PBS. Conclusion Health care is an important consideration in the health sector. This is because it is responsible for peoples life. The healthcare ensures that people engage in social life. Even though the cost of buying drugs is expensive, the government should continue subsidizing the services. This is to ensure that the scheme achieves medication and other related services. This will help in achieving economic development and optimal outcome for the health sector. Therefore, social programs should be implemented in order to give support to the aging people in the community. The pharmacies should also offer subsidization on drugs in order to reduce health needs in future. The country should use drugs that are preventive rather than purchase expensive drugs. The decision making action is to invest in the new project since the PBS cost of expenditure is less than income cost making it break even at $51472. This is because the company should consider income and expenses to make a decision. There should be incentives programs in order to take care of the aged people. Care budgets should be encouraged in order to increase GDPs and change peoples life. 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