Drug manufacturing outsourcing

Question

Hey I would like to hear your thoughts on how you would structure the framework for a case that involves a drug manufacturer who has capacity restrictions and is deciding whether to outsource with a close partner

Answer 1

Hi there,

A classic Cost-Benefit framework would do just fine here!

Cost-Benefit across the two options (outsource versus do it ourselves).

In terms of Costs you're looking at the upfront investment cost + ongoing costs of doing it ourselves versus the ongoing costs of outsourcing.

In terms of Benefits you're looking at the difference in volumes, quality, pricing etc.

Answer 2

There are many articles on “when should a company outsource” and what factors it should consider. While a coach may give you some ideas, this is one of the cases where business academia has given a lot of thought and research, and they should be able to provide a more interesting answer.

Just please don't forget that once you find a good framework, you have to consider the specifics of the industry (in this case pharma) and the specific goal(s) of the company (which have to be assumed given that the prompt doesn't provide much detail on that).

Answer 3

I would probably say the McKinsey M & A framework as it gives you a breakdown of all the buckets you would probably c... (read entire answer)

I would probably say the McKinsey M & A framework as it gives you a breakdown of all the buckets you would probably choose anyway but with a bit more math when it comes to finan... (read entire answer)