Write a change management strategy after the acquisition of the life science company. Exit strategy recommendations and plan:

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Recommendation

               While selecting the guiding coalition team, it is essential to consider three major aspects, including composition, trust level and common goals across the team members. Based on the organizational chart and the employee personas, the list of individuals with the most appropriate characteristics for the change initiative plan includes:

· Juanita Gonzalez – Business Development Manger

· John Martensson – Research Director

· Leslie Krupp – Sales Representative

· Elaine Hartwick – Acting Director

Rationale

               Juanita Gonzalez: Juanita is the organization's Business Development Manager. She does not manage any individual since no one reports to her. Juanita has been in the organization for two years since joining the workforce. Most importantly, she influences the organization's relationships with potential clients and arranges for the organization's sales executives' appointments. She also helps find potential and new opportunities while researching for the organization's leads. Juanita is a potential guiding coalition member mostly because she is an extremely intelligent manager. Besides, she has been rated high regarding productive rate and motivating others. Although she has never engaged in any acquisition before, she has experience working in a completely reorganized entity. As such, she has some skills and experience in the organizational change process. Her intelligence helped to locate and establish an effective relationship with the potential buyers who could offer the organization a good profit after the acquisition. Moreover, since successive changes depend on each member's contributions, she will help motivate other team members during the implementation process to achieve the common goal of all stakeholders.

               John Martensson: John is the organization's Research Director. He manages three people who report to him to have the final decisions. John has been in the organization for twenty-two years and has been rated high regarding his job satisfaction over the period. He particularly influences the entity's research and development department. Following his characteristics of commitment, he is capable of engaging in the company's projects to ensure they successfully obtain the intended goals and objectives. Also, based on his long experience in the company, he will help to oversee the entity's data collection and analysis to evaluate the overall value and price it can be sold. His effectiveness can be measured by the high rated score in job satisfaction he has shown over the years.    

               Leslie Krupp: Leslie is the organization's sales representative. She has been working in the organization for fourteen years, with her score in job satisfaction reading relatively high. She is responsible for influencing sales for the company by selling products and services either directly or indirectly to the clients. Leslie has the characteristic of maintaining consistency in her sales targets and has shown the capability of surpassing her quotas every quarter. She has an average score in job satisfaction, indicating her commitment and competency in her assignments. Also, throughout her career life, she has dealt with numerous changes meaning she knows what is needed for a successive organizational change. Leslie will play the role of engaging and persuading prospects to buy the organization.    

               Elaine Hartwick: Elaine is the organization's acting director, and she manages one person who reports to her. She has been working in the organization for ten years, where she has scored relatively high in job satisfaction. She influences the management of the organization's business and essential affairs. She is also responsible for ensuring the organization's workforce is offered an effective and efficient workplace environment. She is a true visionary, an essential aspect of the organizational change strategic plan. She is also a strong leader, especially when organizational changes concern. Her experience in the organization also proves her expertise in the leadership field. Moreover, she was recently promoted, as indicated by her two years since the last promotion, proving her credibility in the organization's change. She will lead the guiding coalition in the change implementation process to its completion with her leadership skills. He will help to ensure that the team members have the best working condition while implementing the organizational changes. It will help inspire and motivate the team members by complementing their good work performance.  

Team-Building Strategies

               One of the strategies I will use is holding regular corporate retreats. During the implementation process, the organization leader needs to accomplish team members' mental and physical well-being while engaging in their respective tasks (Fapohunda, 2013). This will help keep the members motivated and socially close to each other to share ideas on how they can increase the organization's value to obtain high profit. Besides, the leader should encourage and enhance effective communication and collaboration among the members. The team should communicate their findings in real-time and collaborate to improve the entity's value and find the potential buyer who will generate more profit for the stakeholders.

               One step to consider in building a sense of urgency is building a culture of urgency prior to its requirement. The problems or issues surrounding the organization's sales should be curbed before they erupt beyond its control. Also, the guiding coalition members should be well educated concerning the rationale for the urgency (Maximin, 2015). The organization leadership should clearly state the rationale or reasons for selling the organization to the stakeholders. Then, it should focus on empowering the members to deliver their best performance by motivating them with the appropriate workplace, wage and employee benefits (Kotter, 2018). In essence, engaging employees in decision-making and effectively communicating the organization's intentions and objectives will help improve their performances. They feel belonging to the company, which will then boost their morale to offer their best outcomes.

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Current Market

The most potential buyer that the team identified for the pharmaceutical company is Novartis International AG. It is a Swiss multinational pharmaceutical corporation based in Basel, Switzerland. Based on the last financial report, the company managed to record a revenue of 49.89 billion USD. In addition, the number of employees working in the company has concurrently increased to over one hundred thousand workforce members by 2021. The company had been in the pharmaceutical market for a while, a period of not less than fifteen years of operation. 

               Novartis International AG majors in manufacturing three primary types of products, including pharmaceuticals drugs, consumer health, and animal health drug products. A healthcare organization focuses on the development, discovery, marketing and manufacturing of generic and prescription pharmaceutical items and eye care drugs. Moreover, the pharmaceutical company provided drugs for cancer treatment, dermatological conditions, cardiovascular diseases, ophthalmic and respiratory diseases, neurological disorders, immune disorders, and other infectious disease remedies (GlobalData, 2021).

Novartis manufactured various pharmaceutical drugs, including Adakveo, Afinitor Disperz/Votubjia, Afinitor/Votubia, Aimovig, Arzerra and Azarga/Azorga and many more relatable pharmaceutical drugs. The animal health items offer drugs for pet care, bio protection (insect and rodent control), and livestock care. Besides, it conducted various research in different regions through its NIBR (Novartis Institutions for Biomedical Research). It was formed from two separate entities, including Sandoz and Ciba-Geigy, which merged to form the current Novartis International AG. Based on the merger, the company focuses on two main types of drugs, including pharmaceutical and agrochemical drugs derived from the two divisions. The entity operated through its offices and subsidiaries network across various regions, including Europe, the Americas, Asia-Pacific, the Middle East and Africa. The majority of its customers came from all these regions. T

The principal customers for Novartis's products and services included patients in need of pharmaceutical, eye care and generic drugs. Recently, with emerged of the COVID-19 pandemic, the company's customers significantly increased as people worldwide went for vaccination. In 2021, the company was approximated to have served over eight hundred customers with its products and services worldwide (Novartis, 2022). In addition, it served customers who needed medical care for their pets and livestock. The company also competes in pharmaceuticals, where it majors, and the agrochemical industry.

Financial Situation

               Revenue: Based on its revenue trend over the past three most recent years, Novartis is a growing pharmaceutical company. Over the last three years, the company's revenue has shown improvement, although the figure slightly declined in 2019 from 2018. In 2020, it had a total revenue amounting to 48.9 billion USD. This incline was about 1.3 billion USD based on the previous year's report. Besides, the Besel based entity, which the team considered the most potential buyer generated the largest portion of the total revenue through the sales of its pharmaceutical products. In total, the company's segment made about 40 billion USD in that same year. Moreover, the company is confident of delivering revenue growth of 4 percent or even higher based on its predictions for 2026. (Reuter, 2021). This is true especially following the multi-billion dollar sales of its experimented and approved drugs such as psoriasis medicine Cosentyx and arthritis, which it intends to introduce into the market. The company intends to use the new products to cover and exceed the 9 billion USD hit that it experienced from the copycat version of some of its items. Over the years, the increment in its revenues showed that the company was constantly increasing its sales through good marketing and selling structures.  

               Expenses: The operating expenses of Novartis have been increasing over the last three most recent years. In 2018, the annual operating expenses of Novartis AG were 37.7 billion USD. The expenses increased by 1.9 billion USD in 2019 as it recorded operating expenses of 39.6 billion USD. In 2020, it further increased its expenses with a margin of 0.16 billion USD to make it 39.75 billion USD (Macrotrends, 2021). In general, this implied that the company was growing with each annual report. The growth in expenses signified the expansion of its operations, which required more funding.  

               Profitability: The Company's measurement of its assets and investments' utilization to generate profits had also shown impressive results. Over the past three recent years, the company's profitability has increased over the period. In 2018, the annual gross profit for the company was recorded at 31.6 billion USD. The profit then increased in 2019 by eight per cent as it recorded an annual gross profit of 34.3 billion USD. In 2020, the entity's gross profit slightly inclined by 1.53 per cent to 34.8 billion USD as its most current recorded gross profit. This was a clear indication that Novartis International AG efficiently utilized its assets and investments to generate profits from its operations and sales.

Recent Developments

               One of the notable announcements the company had made over the past year was its collaboration with Alnylam. In essence, the company announced that it would collaborate with Alnylam to leverage the entity's proven and proprietary technology of siRNA. The technology was essential to Novartis because it would enable it to inhibit its target discovered Biomedical Research. The technology would effectively develop a treatment-designed program that would enhance the regrowth of functional liver cells to its patients. Besides, the technology would provide an alternative approach of transplanting the failed livers for its patients. As a result, the company would earn a competitive advantage over its competitors due to the advanced technology that would increase its sales and revenues significantly. Another significant announcement is the approval of its Leqvio (inclisiran). In December last year, the US Food and Drug Administration approved introducing its Leqvio substance into the market. In essence, the approval is a major win to the company because of the significant increase in demand for remedies for minimizing low-density lipoprotein cholesterol. With the approval from the US FDA, the company was looking forward to increasing its sales and revenues over the next five years, which would help to top up in its competitive industry. Finally yet importantly, Novartis announced last year that it had introduced T-Charge, which was its next-generation CAR-T for serving new investigational cell therapies. Based on the announcement, the management reported having successfully treated several patients using the platform with an overall response of 100 per cent with the highest doses of PHE885. This was essential for the company as it helped keep it ahead of its competitors in terms of technology, which is a necessary component in the contemporary competitive industries.

Buyer Rationale

               Based on the buyer's financial status and progress, the owners of the sciences organization should have considered Novartis as the most appropriate potential buyer. The sciences organization was currently moving as it has recently done great in its market. Therefore, it would be wise for the owners to consider a buyer who was also growing at the same pace as the organization. In essence, Novartis AG could grow with the company and make it more productive than it is currently. Based on its financial reporting, the company had shown the potential ability to efficiently utilize its resources and shareholder's equity to generate more profits. It was an indication that Novartis would effectively manage the organization's assets to continue growing with it over the coming years. It would have been in the interest of the owners and the organization's stakeholders. Besides, the company's most recent announcement would promise the owners and the stakeholders a better future for the sciences organization. The announcements promoted the company's growth and development, predicting prosperous future progress for the sciences organizations.

Acquisition Road Map

Acquisition-related tasks

               Goal Identification: the first task was to identify the primary reason for selling the company and what the owners and the stakeholders would achieve from the goal. For instance, the owners saw the need of selling the company to reduce the burden of risks or management, given that it was rapidly growing.

               Arrangement for the Acquisition Process: The strategic management team met several times to plan how the process of selling the organization would be smooth and successful. This included identifying roles and responsibilities that would be assigned to the team members.

               Contingency Planning: after the VP noted the possibility of the process failing with the first potential buyer, the team had to search and evaluate for an alternative buyer.

               Conduction of Valuation: the team had to assess the value of the potential buyers to decide on the most appropriate alternative for the acquisition transaction. The team had to evaluate numerous criteria from the list of potential buyers, including assessing the financial position and various activities that would guarantee the organization profitable growth in the future.

Recommendations

               Over the next year, the team should have performed due diligence that should lead to definitive agreement negotiation and transaction execution. This should have enabled the organization to fully comprehend the issues, risks, and opportunities related to the acquisition transaction. Another recommendation I would make was for the team to implement the ongoing performance of the acquisition transaction and monitoring to maximize strategic value and reduce barriers to the existing operations.    

Gantt chart

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North American Industry Classification System (NAICS) code

The NAICS code identified for this research report is 4242210; Drugs and Druggists' Sundries Merchant Wholesalers. The code was based on the industry that comprises the establishment of wholesale merchant distribution of medical, biological, and pharmaceutical products meant for both internal and external consumption (NAICS Association, 2021). The products appeared in the form of tablets, vials, capsules, ampoules, powders, suspensions, and ointments. In essence, most marketers tend to face the dilemma of choosing the potential prospects or buyers for their items. Similarly, the business development manager for the life science organization was likely to experience the challenge of finding another potential buyer for the company if the first buyer pushes her reconsideration further. Alternatively, the manager would have to use the NAICS code by identifying specific buyers based on the entity's industry (NAICS Association, 2021). The manager decided on the alternative buyers following the NAICS code's information.

               The content of the information was typically about an organization's general classification and specified vertical applications of engaged items. Here, the manager would be targeting the buyers or the entities under the classification of medical and pharmaceutical products. The life sciences organization used the code for the database to pull data for entities in the medicine and pharmaceutical industry. In other words, it easily organized the code to locate better the closest matching medicine and pharmaceutical industry within the database. The code was based on the industry that comprises the establishment of medical and pharmaceutical products such as tablets, vials, capsules, ampoules, powders, suspensions, and ointments. It also focused on other healthcare services such as consultation and distribution of branded, generic, and over-the-counter pharmaceutical products through its facilities network across the United States.   

Top competitors

The top competitive organizations within the medicine and pharmaceutical industry and NAICS code included McKesson Corporation Texas, AmerisourceBergen Corporation in Pennsylvania, and Cardinal Health, Inc. in Ohio State. The manager used three criteria, including performance, reliability, and sustainability, for the companies' shortlisting. The criteria are essential, especially to the entity's stakeholders. The reason for choosing the criteria was because they are at the core of the decision-making process that will determine the most potential buyer that could offer the best interest of the owners and the stakeholders in the long run. For instance, performance was a criterion that enables the entity to choose a buyer or company based on the analysis of its performance revenue against its goals and objectives. It helped the manager analyze the performance growth in terms of revenue over a period, and it impacted the organization's outcomes or results of its projects.

Especially in the contemporary error of economic and market instability, the reliability criterion impacted ways the organization could avoid catastrophes or risks that might emerge. Failure to effectively plan to mitigate such events, the organization might lose sales of its new cancer treatment drugs due to the market risk factors and complexities. To continue with the company's prosperity, the manager needed to consider buyers with key principles such as reluctance to simplify deference to expertise, commitment to resilience, and sensitivity to operations. On the other hand, the sustainability criterion is more likely to affect the organization's operational efficiency. The manager used the criterion to locate the buyer that will sustain and improve the organization's leadership talent pool and have proper insights and change strategies that will incline the operation performance in the long term.         

               One of the criteria I did not consider using includes risk. In essence, after the company's acquisition, the owners will liquidate or reduce their stake in the organization's business. The owners will not incur substantial losses if the entity falls after the acquisition. In addition, the entity did not use risk criterion because it does not mean that the company with more or fewer risk factors is prompt to failure. Another significant criterion I considered but did not use was returned on investment. After the acquisition process is completed, the responsibility of capitalizing on investment will be more on the new buyer or company, thereby making it less worry to consider.

Company information

The strategic vision of McKesson Corporation was to bring together the technology, clinical knowledge and skills, process expertise, and the Fortune 15 Company's resources to drive changes in cost and quality of medical products and services. The entity's primary products and services included delivery of generic and prescription drugs to retail and global institutional pharmacies. Besides, it also supplied medical and surgical equipment to alternate health care sites, including surgical centers, doctors' offices, and long-term care institutions. Moreover, the organization offered various management, consultation, clinical, administrative, and operations services. According to the recent report, the buyer's overall market share of the buyer was 4.3%, while its compound annual growth was 4.5% (5y) (Bloomberg.com, 2022). This represented an incline to its growth rate compared to the previous year.     

               The strategic vision of AmerisourceBergen Corporation, on the other hand, was to become the leader in services, solutions, and distribution in the healthcare industry. It intended to top up its major competitors within the industry to emerge as the healthcare organization with the highest revenue share in the industry. It was a distribution entity that acts as a go-between for makers of drugs and pharmacies, hospitals, doctors, among other healthcare providers. It distributed branded, generic, and over-the-counter pharmaceutical products through its facilities network. In particular, the organization's specialty unit of distribution dealt with complex and sensitive biopharmaceutical products and services. Other services included healthcare consultation services, commercialization, and pharmaceutical packaging. The entity had a market share and CAGR greater than McKesson Corporation as it recorded a market share of 15.66% and 7.8% (5y), respectively, based on the most recent financial report (Dun & Brastreet, 2022). It had experienced growth in both market share and CAGR (5y).

               Cardinal Health, Inc.'s strategic vision was to be the most trusted healthcare organization and partner by developing its distribution scale and heritage, items, and solutions while enhancing growth in the evolution of healthcare areas. Such areas focused on resources, customer insights, and data and analytics. In essence, the healthcare organization was the leading distributor of pharmaceutical products and other suppliers and equipment related to medicine across the United States. It had a pharmaceutical division that offers supply chain-related services such as distributing generic, branded, and specialty OTC and pharmaceutical drugs. Also, it had a medical division that parcels out laboratory, surgical and medical supplies. Its unit of distribution deals with complex and sensitive biopharmaceutical products and services. Other services included healthcare consultation services, commercialization, and pharmaceutical packaging. The entity had a market share of 7.66%, which is an incline from the previous year (Yahoo Finance, 2022). In contrast, it had a Compound annual growth rate of 15% (5y), a decline from the previous year.         

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