Business Plan Analysis: Private Concepts

Topics: United States, Cervical cancer, Marketing Pages: 5 (1772 words) Published: March 24, 2013

Re: Business Plan Assessment - Private Concepts

Critically analyzing a business plan for its viability and opportunity for success is absolutely necessary from any stakeholder’s perspective. Doing so aides an investor in knowing whether or not to invest, a bank in deciding on a loan, or even a partner in his/her decision to join a venture. But perhaps most importantly, a critical analysis of a business plan can and will help the entrepreneur to assess whether or not an idea under its current platform is worth undertaking, or if it is back to the drawing board they go. The purpose of this memo is to assess the business plan of Private Concepts, a company hoping to bring to market The Pevlon, a cervical cancer screening device made for private, in-home use.

The opportunity for such a device absolutely exists both here in the United States and abroad. For one, the plan mentions The Breast and Cervical Cancer Mortality Act of 1990 which, “mandated a nationwide program to increase access of medically underserved women to comprehensive breast and cervical cancer screening services,” and when coupled with the Patient Protection and Affordable Care Act that was recently passed, the amount of free (to consumer; paid for by the government) access to this product creates potential for a high demand in this country. In foreign countries however, such as rural China and even Africa, where access to healthcare and proper healthcare facilities can be extremely rare, the appetite for this type of product could be tremendously significant. And there lies the first issue with this business plan.

According to the Lancet Oncology medical journal, Volume 11, Issue 12, “75,000 women develop cervical cancer and 40,000 women die from the disease in China each year.” Those numbers in the United States are only about 12,000 and close to 4,000 respectively ( This exemplifies a larger need for this product abroad as opposed to right here in the states. And to focus on the opportunity in China, a Wall Street Journal publication explains how China’s healthcare system is lacking in general, but puts a microscope on the disparity in quality healthcare between rural and urban areas (Burkitt, 2012). These rural areas in China represent a large opportunity (much larger than any market in the United States) for The Pevlon. And so although the opportunity does exist for the business plan’s product, it is evident that the opportunity accentuated in the business plan is not the optimal one (aside from appealing to non-profits or other entities that would utilize the Pevlon in charitable, undoubtedly foreign ventures – this should have been a more significant portion of the plan). Additionally, the opportunity in the United States has not necessarily been proven to the point where one could consider the need for the product as pervasive enough to where the consumer is willing to pay for it.

And pay for they would have to, because as the plan notes in the chart on page 10, a Pevlon screen costs 50% more than a typical pap smear. This exemplifies that pricing is going to be an issue. The health care market is highly dependent on the insurance industry, especially when there are product substitutes. Take pharmaceuticals for example. In group health care, policies are dictated by the contract that is in place and the majority of these contracts will sway the policy holder to utilize generic medications. This is done by the insurance carrier covering a larger percentage of generic medications than name brand ones, which ultimately costs the carrier less. So if a pap smear is less costly by 50% than a Pevlon test, carriers may still cover the device, but the “incentive” to utilize the cheaper procedure will absolutely be in place. Additionally, the business plan identifies lower income women as a target market, but fails to explain how a more expensive procedure will be a viable option for this segment group. But even when the entire...
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