APPLY the product life cycle model to product portfolio of Niramaya Pharma Limited and ANALYSE the balance therein; with detailing on current…

The Descriptive Questions 2.7 The product life cycle model classifies products into four main phases – Introduction, Growth, Maturity, and Decline. It is important here to note that above mentioned phases are based upon the marketing of the product. In reality, there is one additional phase which takes place prior to the introduction of the product to market i.e. product development phase (in which R&D related to product take place). Typically, the product life model is used to evaluate the overall balance of firm's product portfolio in terms of growth (new products replacing those at the end of their life cycle), risk (having some stable low-risk products to offset other high-risk ones), cash flow (positive cash flows from some products can assist fund those that are currently cash negative), and resource requirements. Sales and profits The model can be applied to Niramaya as follows: The product development phase of the product life cycle includes the 132 medications that are in different phases of development, either being tested or going through clinical trials. Despite being a major financial burden on the entity, they are a necessary component of the portfolio since they replace older medications that have reached the end of their useful lives, ensuring the company's continued profitability. Giapride and Immunol are presently in the advanced stages of the Introduction phase, as they have not yet witnessed substantial growth in sales revenue. At this stage, the products are still working toward achieving breakeven sales revenue, which implies that they will continue to consume the company's financial resources until the breakeven point is attained. This reflects the typical scenario of the introduction phase, where significant investments are required in product promotion, awareness, and distribution, while revenues remain insufficient to cover costs. Lifedipine, a drug used in the treatment of heart disease, has been on the market for two years and has achieved considerable success. However, its sales have now stabilized and are not expected to grow further, indicating that the product has reached the maturity stage of its life cycle. Consequently, it is expected to generate steady net cash inflows that can be utilized to support other products in the portfolio that are currently operating at a loss (i.e., cash negative), rather than reinvesting in expanding Lifedipine's market presence. Nevertheless, while Lifedipine will continue to contribute cash, it is not expected to play a role in driving the company's future growth. Combi-relief is nearing the end of its maturity phase and is expected to enter the decline phase within the next 12 months, coinciding with the expiry of its patent protection and the subsequent entry of generic alternatives into the market. At present, the product continues to generate positive cash flows, which can be leveraged to finance new product development. However, beyond the upcoming year, Combi-relief is unlikely to contribute meaningfully either to cash generation or to the company's future growth. Overall, the portfolio demonstrates a satisfactory balance between future growth potential and cash flow generation. It is crucial that Giapride and Immunol achieve break-even, particularly cash break-even, in the coming years to contribute meaningfully to Niramaya's sales growth. Additionally, the successful transition of the remaining 132 medications, which are currently in various stages of development, from the development phase to market launch will be key to sustaining the company's long-term growth trajectory.