Part 1 - Framing the Project Portfolio Management Problem
The objective is to analyze the appropriate portfolio for the XYZ to allocate fund and additional resources to be able to increase the growth of the Company.
The constraints to the project include the limited resources made available. The funds are not sufficient to cater for all the projects that the Company can invest. Owing to this constraint, the Company needs to assess with caution on the proper way to invest using the available resources so that growth is realized in the XYZ business. The other constraint is fierce competition that the pharmaceutical industry faces from rival firms. With the high competition market, it becomes a challenge for the pharmaceutical industries, as it needs to set up in the making an appropriate decision to ensure perpetual growth despite stiff competition. The brand names of the drugs are constrained to the pharmaceutical since it affects the ability to sell the drugs.
In this case, the risks involved include investing in the drug development that takes many resources. The funding of the drug development as well takes much time before the approval of drugs. It is however not a mandate that the drug under trial will be accepted at all. Drug development can occur, takes many resources over an extended period, and at long last fail to be approved. The cost invested in the drug becomes a waste.
The available alternative is to reduce the cost that is used for drug development. It can be achieved by merging efforts towards drug development with other companies. The resources as well as the risks are shared amongst the merged Companies. The Company shall therefore focus on making more sales using the appropriate brand name for the drugs in various countries as well as come up with the strategies to overcome the competitors.
The information needed for project portfolio at XYZ is on the sales made in the various countries and on the different drugs. Statistics on the costs and duration of the drug development also need to be obtained. Furthermore, the stiff competitors should be determined and their quality and amount of drug they deal with is identified. The information about the brand names and the effect they pose on the market should be collected for XYZ. The information is obtained from secondary sources such as magazines, journals, and publication from various organizations that deal with drugs. Interview and internal auditing provide information on the sales the Company makes in multiple countries.
Part 2 - Project Valuation
The value of the Project 1 in XYZ portfolio is determined by evaluating the steps and recorded statistics during each phase of the drug development. The activity associated with the project is usually recorded and once this information is synthesized accurately it leads to an evaluation of the value of the project. The information about the number of the skilled personnel hired for the project is important as well. Besides, the effectiveness and cooperation during the project point towards understanding of the project. The survey is an appropriate qualitative tool that helps in the determination of the value of the project.
Part 3 - Project Risk
The risk assessment is important before venturing into the project. To assess the risk associated with the project, the outcome that may arise in the market and the technical section of the project is determined. The consequences of the result are evaluated about the benefits. Similarly, the ability and extent of the undesired consequence to be manifested are assessed based on the Market variability and technological change. The risks are the adverse outcome that the Company may get from the project. The additional information necessary for the assessment of the dangers is the economic state of the country, inflation, and competition since they affect the market. The availability of the resources should be determined as it affects the project operation. Survey quantitative tool helps to gather information that enables to identify the risk associated with the project.
Part 4 - Project Portfolio Decisions
When the available finances changes, which is it has reduced, the line of the project to focus on the differences. The consideration when choosing the project to invest in the financial state of the project, which is if the project monetary demand can be catered, it has higher chances of being chosen. Secondly, the profitability of the project that the project will be able to yield a higher profit margin using the available fund will be selected over the others.
Lastly, the sustainability of the project- the project that can be sustained with the available resources will be exploited over those who cannot be maintained. Sustainability is important as it determines the future progress should be projected be initiated. The additional information to be addressed includes the experts required in the project and their financial demands, the level of competition from each project and the companies' customers' preferences. Analytical technique forms an essential quantitative tool to be exploited in determining the best portfolio. It enables critical analysis of the statistical data provided in each project to come up with the best portfolio of the Company.
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Appropriate Portfolio for the XYZ to Allocate Fund and Additional Resources. (2022, May 17). Retrieved from https://proessays.net/essays/appropriate-portfolio-for-the-xyz-to-allocate-fund-and-additional-resources
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