Exit Strateies

First of all, the exit strategy is applicable for several special cases, in which we should cause great change in production

1. Severe entry barrier

2. We cannot get approval from the pharmaceutical industry, and our company is no longer profitable

3. The price has dropped to a low enough level during a long enough time that we cannot sustain the production any more

First method: product shift

We can produce another product which can be made utilizing the same operating line ( e.g bio butanol and some other biofuel.

Second method : finding more profitable markets

Since there are many undeveloped areas in the world where people cannot afford Tamiflu® from Roche ( the company controls the market), we can sell our product at a much lower price since the profit margin on shikimic acid is quite significant. This method is applicable especially when entry barriers mean our company cannot sell our product, but we receive regulatory approval.

Third method: merger & acquisition

We can sell our company if the price drops down to an unacceptable level during a long enough time that we cannot sustain our production any more