Syntex

 Salesforce Sizing Example

 Syntex and BCG-matrix

10.0%
Real
Market 7.5% Norinyl
Growth
Rate 5.0%
(%) Topicals Naprosyn

2.5% Anaprox

1.5 1.0 0.75 0.5 0.25 0.1

Share/Largest Competition Share (Log Scale)

ME Syntex 2006 - 2
 Allocated Compared
with Strategic Plan
Saturation
FP
GP Naprosyn
IM Lidex
Rheu
Ent ORS Nor 155
OB Nor 135, Nasalide
Derm
Alleg Anaprox
Synalar

0.5 1.0 1.5 2.0 2.5 3.0 3.5

Ratio of Allocated/Planned (Saturation = ???) ME Syntex 2006 - 3
 Syntex Results

 Added about 100 sales people per year.

 Saw increase of profit of about $24 millions.

 Management claims that it left $36 millions “on

the table” by not focusing on Naprosyn,
spending too much effort on oral contraceptives.

 Was this a salesforce sizing or allocation

problem?

ME Syntex 2006 - 4
 Key Insights

 Most gains come from “reallocation” and not from incremental

spending.
 Model can help you assess the opportunity costs of existing
organizational policies, or of adopting political solutions.
 Good decisions are more likely when you have an interplay
between model and judgment.
 Getting agreement of managers on model inputs is more likely
than getting an agreement on allocation.
 There are strong anchors based on prior experience that must
be overcome in implementing rational allocations.
 Normalization of response functions around the current
business context makes it easier to understand the model and its
implications.

ME Syntex 2006 - 5
 Other Applications

 Applications in airlines, banking, pharmaceuticals,

chemical products, computers, charitable
institutions, etc.
 Average 3.5% to 5.5% improvements in profit (over
70% of that due to resource reallocation!).
 Half day to one day needed for initial assessment.
 Bigger gains possible with more detailed marketing
research and market monitoring!

ME Syntex 2006 - 6