Analysis of MST - A Small Bio-defense Company :: Business and Management Studies:

Analysis of MST - A Small Bio-defense Company EXECUTIVE SUMMARY MST is a small bio-defense company with an exceptional product that is patented in the U.S. They are looking for second round financing, a source of cash, in order to fulfill their goal of going public. At this time there is an unsolicited sales call from Japan, which would mean a great amount of money. This sale would mean hundreds, maybe even thousands of units. MST knows that their product is one of a kind now, but their competitors are working hardly to come up with a similar item. They need to make the deal quickly, before the Japanese buyer has other choices. There are several risks that must be considered while considering this deal. The most important one is that they might lose the technology due to either licensing or to reverse engineering, which will probably also mean the end of the company, knowing that it is not strong enough. It is also known that American patents can’t be protected when exported to Japan, that is a big risk. There are a number of alternatives available to solve this problem. The first is for MST to export the product by itself, and sell it to the Japanese. The second alternative might be to contract with a Japanese trading company, and finally, the third alternative is to license the technology to a Japanese manufacturer. All of these alternatives will be evaluated according to the intellectual property risk, reverse engineering risk, costs and implications on profit, MST’s competitive and market leading position, time-to-market, and the concerns and implications of export licensing. Given an analysis of the alternatives, it is recommended to take the second one I have analyzed this alternative as the best because it takes a short period of time, helping MST to keep their position as market leader, as well as protecting its intellectual property due to the fact that trading companies have a reputation to maintain. Situation Analysis MST is a small bio-defense company with an exceptional product that is patented in the U.S. They are looking for second round financing, a source of cash, in order to fulfill their goal of going public. At this time there is an unsolicited sales call from Japan, which would mean a great deal of money, but they do not know how to address it. This sale would mean probably hundreds, maybe even thousands of units, plus training. It is in MST’s knowledge that their product is one of a kind right now, but their competitors are working fiercely to come up with a similar item. Therefore, they need to make the deal quickly,