CONTENT
Part One
1. Key Issue
Charles Rivers Laboratories (CRL) is evaluating a joint venture proposal that a Mexican company creates a state-of-the-art specific pathogen-free (SPF) egg for the vaccine. If the proposal is approved, CRL is going to invest 2 million dollars to the Mexican company. However, CRL must consider the potential risks of cooperation.
Part Two
2.Internal Analysis: VRINE ANALYSIS
2.1VALUE
Charles River Laboratories has a large variety of customers more than 15 countries, which means CRL is already capable to expand overseas market. The demand of SPF eggs is very high due to making flu vaccine. More than 100 million SPF eggs were consumed for influenza vaccines each year. The demand even exceeds its supply between 5 to 10 percent worldwide. Accordingly, the operation margin will be improved around 20 percent and revenue will be doubled in four years. Therefore, joint venture is valuable.
2.2RARITY
The rarity of normal eggs switching to SPF eggs is relatively high. First, Charles River Laboratories is still using standard eggs to produce influenza vaccines. Many franchisees haven’t totally changed to cultivate SPF eggs. They still use old chicken farm, This goes to show that the traditional eggs haven’t been replaced and new eggs are rare. Second, most companies don’t intend to take an adventure to try new products due to political instability and corruption. However, SPAFAS took long time to do sufficient research on APLES. It means the rarity exists because not many companies decide take advantage of new eggs.
2.3Inimitable & Non-Substitutability
The degree of inimitable and Non-Substitutability is medium. Even though not many companies start to produce vaccine by SPF eggs, there are still some like APLES working on it. Therefore, technology might be imitated by several companies to some extent. As far as APLES, it is the only company