STRATEGIC ANALYSISBONE MEDICAL LIMTED
...o take advantage of these.’ On the other hand, strategic stretch is the, ‘leverage of the resources and competences of an organisation to provide competitive advantage and/or yield new opportunities (Johnson & Scholes 2002).’ Often companies will adopt and use both strategies, depending on the current state of the industry they are operating in. In relation to BNE, strategic stretch is the main strategy being implemented. With the companies extended research and experiments in a variety of new resources, the organisation is frequently providing a competitive product to the community. As the product is being continually researched and updated, BNE has an opportunity to continue strong growth for the future. It could also be argued that BNE takes on a strategic fit approach. In that the company and partners develop their products so as to adapt to their market. CORPORATE STRUCTURE BNE management system is divided into four sections; the Scientific Advisory Committee, the Board Nominations Committee, Audit and Risk Management Committee and Remuneration Committee. § The Scientific Advisory Committee- provide assistance to the Board of Directors in fulfilling its corporate governance and oversight responsibilities. The members of this committee include a Chairman, Chief Executive Officer (CEO), Co-Founder, Chief Scientist and Director (Bone Medical Ltd 2004). § The Board Nominations Committee- provide advice on the process to be adopted by the Company in selecting persons to fulfil the role of a Board Member of the company. As well as taking the responsibility for evaluating the Boards performance. The members of this committee include a Chairman, Non-Executive Chairman, Co-Founder and Director (Bone Medical Ltd 2004). § The Audit and Risk Management Committee- provide assistance to the Board of Directors in fulfilling its corporate governance and oversight responsibilities. It also advises on the modification and maintenance of the company’s financial reporting, internal control structure, risk management systems, external audit functions, and appropriate ethical standards for the management of the company (Bone Medical Ltd 2004). The members of this committee include a Chairman and an Independent Non-Executive Director. § Remuneration Committee- ensures that the company provides disclosure in relation to it remuneration policies to shareholders. This allows them to understand the costs and benefits of the policies to the organisation’s financial performance. It also shows that there is a link between the remuneration paid to directors and the companies’ performance (Bone Medical Ltd 2004). The members involved in this committee include a Chairman and an Independent Non-Executive director. The diagram below outlines the organisational hierarchy within the four sections of BNE. DIRECTORS CHIEF EXECUTIVE OFFICER CHIEF OPERATING OFFICER CHIEF FINANCIAL OFFICER COMPANY SECRETARY CHIEF SCIENTIST ADVISORS (Adapted from Bone Medical Ltd 2004) STRATEGIC BUSINESS UNIT STRATEGIES BNE separates its business operations into four main areas and each of these areas are individually accountable for their profits, losses and daily operations. For example, partner Proxima Concepts Limited may be designing and constructing a new drug for women suffering with osteoporosis and Bluewater Capital Limited may be designing a drug for men with arthritis. Overall, each partner is responsible for any costs and development procedures in which they take out. However, BNE still operates in a way that the directors and executive board is responsible for the overall business and ensure that each of the units (partners) operates to their full potential. Setting financial restrictions and targets to each of the three partners conduct this. They are required to report to the executive board on a regular basis (monthly) to discuss future business needs and any business concerns that may arise. STRATEGY BY DESIGN, EXPERIENCE & IDEAS § The design lens is often present throughout BNE’s operations. The members involved in the company are continually researching, testing and designing new treatments for bone and joint diseases and degeneration, in particular osteoporosis and arthritis. § BNE also operates in an industry that is constantly changing. The members of the business have a vast amount of experience, with some of the leading directors having up to twenty-five years of experience (Annual Report 2004). Through experience in the company, new ideas are also generated. § Strategy by idea is created by the ‘emergence of order and innovation from the variety and diversity which exists in an around organisation’s’ (Johnson and Scholes 2003, p50). BNE have been very successful in generating new ideas and technologies and have demonstrated that they are more developed than other competitor products. The development status of BNE’s new project ideas is listed in the diagram below. (Bone Medical Limited 2004) PESTEL ANALYSIS The PESTEL analysis provides a summary about ‘key forces at work in the macro-environment’ (Johnson and Scholes 2003, p102). The acronym PESTEL stands for: political, economical, social, technological, environmental and legal. Political: BNE and partners are located throughout major cities in Australia. The Australian government is known for being very stable and is a good location for the operations of BNE. The 2004 budget explained that the Australian government would be supporting businesses such as BNE. As stated by Pincock, ‘the government policies have consistently emphasised the important role that science and innovation can play in lifting Australia's future prosperity.’ As further explains, ‘The development and application of new products and processes significantly enhance economic growth and create new employment opportunities (Pincock 2004).’ Economic: The Australia economy can have a variety of impacts on organisations such as BNE. According to Gordon 2004, ‘The cost of producing in Australia is rising at its fastest in three years, addi...