NEW VENTURE CREATION (MBSA 2313)

Case Study:
Holista CollTech: Direction for Focused Growth

INDIVIDUAL ASSIGNMENT

LECTURER’S NAME: DR. ADRIANA MOHD. RIZAL

SECTION: 02
COURSE: MBA GENERAL PART TIME (JB)

NAME: SITI ZAINAB BINTI ZAINOL

MATRIX ID: MBS 141025

Case III Assignment Questions (Holista CollTech):

Case Summary

In December 2009, Holista CollTech Ltd. was established as a biotechnology company and its core business was the production of ovine collagen and Kacip Fatimah extracts. The ovine collagen was used mainly in a broad range of food, health supplements, cosmetics, and medical products, while Kacip Fatimah extracts were ingredients for food and supplements products. Holista CollTech's corporate vision was to be a global player in the multi-billion dollar collagen and herb extract markets. However, it faced fierce competition in the collagen market which was already dominated by a number of large multinational firms, and in the herb extract market in which competition was becoming increasingly intense due to the rising number of imitators. This was a challenging situation for Holista CollTech Ltd. since these competitions could prevent the company from achieving its objective to increase its control in these two markets.

1. What were Holista CollTech’s businesses? What were the company’s long-term objectives?

The Holista CollTech’s businesses can be divided into two catagories. The first business is R&D outputs and licensing. The company were a research-driven biotech company, a result of merger of Holista Biotech Sdn Bhd and CollTech Australia Ltd dedicated to delivering first class natural ingredients and wellness products. Moreover, the company research, develops, manufactures and markets “healthstyle” products to address the unmet and growing needs of natural medicine. Holista CollTech leads in research on herbs and food ingredients from Malaysia’s rainforest - the oldest in the world.
The second of Holista CollTech’s business is the production and sales of its own brands of cosmetics and health supplements. For example, Holista CollTech launched Lacto-5, which became the top locally cultured beneficial bacteria-based product in the market by 2009. The company long-term objectives were the company’s intention to be a leading global firm in the research, development and commercialization of natural products. It planned to develop novel ingredients and formulations that are derived from local medicinal plants and to patent these discoveries in order to build a steady income from the licensing of their patents. In addition, it also decided to self-manufacture and commercializes some of them into new products. Moreover, with its listing on the Australian Stock Exchange (ASX), Holista CollTech aimed to further exploit the botanical and collagen technologies, to move more aggressively into the global market and be one of the main players on the Australian Stock Exchange (ASX). In addition, Holista CollTech Group planned to extract, purify and standardize ovine-based collagen and then sell it in various grades for food, cosmetics and medical purposes. Besides its interest in marketing collagen to produce cosmetics, the company also planned to use collagen as food products because of the similar properties. Holista CollTech had also planned to collaborate with the Commonwealth Scientific and Industrial Research Organisation (CSIRO), an Australian research institution, in the near future to develop food grade ovine collagen of a finer substance for better consumption by humans.
Moreover, Holista BioTech group also planned to market Kacip Fatimah-based products to foreign markets, and to work together with distributors to create strong local brands. It also aimed to create scientific interest in this herb by working with large multinational partners, including with PepsiCo, to produce sport drink with Kacip Fatimah extracts. The group also planned to test markets and determine demands for Kacip Fatimah health supplements and cosmetics in the pharmacies. With regard to its collagen business, there were plans to set up joint ventures to produce ovine collagen in China and India

2. What are the reasons (motivation) for the company establishment in 1995?

There are a few reasons (motivation) for the company establishment in 1995. The first reason for the company establishment in 1995 is Dr Rajen’s prior experiences in pharmaceutical sector. He graduated from Universiti Sains Malaysia (USM) in 1986 with a bachelor degree in pharmacy. He first worked as an intern pharmacist at Kuala Lumpur General Hospital for a year. In 1987, he joined a Malaysian-based pharmacy company as a community pharmacist. Following this, he worked for a multinational pharmaceutical company where he was the operation executive from 1987 to 1988. Dato’ Rajen then joined another large multinational pharmaceutical company as a medical representative, and was promoted to Junior Product Manager in 1989. Three years later, he was employed by a third multinational pharmaceutical company as a product manager until February 1995.
The second reason is Dr Rajen’s disagreement with the management. In 1995, he was forced to leave the company he was working for due to disagreement with the management, and decided to start his own business. This was a big turning point in his life when he established Total Health Concept Sdn. Bhd. (Total Health Concept) in April of the same year. The company’s mission was to promote good health by enhancing the mental state of a person’s well-being and not only focusing on curing the physical illness. Having a keen interest in traditional medicine, he promoted healthy living based on tried and proven traditional concepts such as the ancient Indian medicine Ayurveda, Chinese practice of traditional medicine and the Malay traditional medicine.
The third reason is social network. Dr Rajen’s long experience in the herbal medicine industry has able him to be involved various herbal medicine associations. Dato’ Rajen, for example, has been heavily involved in the herbal and related industry activities since 1998. He was a founding member of the Malaysian Dietary Supplement Association (MADSA), which was a member of the International Dietary Supplement Association (IASDA); a member of Herbal Working Group for Ministry Industry Group for High Technology (MIGHT); a member of Malaysian Ministry of Health (MOH) Standing Committee for Traditional Medicine; and also a technical advisor (Health Supplements) for Malaysian Direct Distribution Association (MDDA). He was also a guest lecturer on alternative medicine at the Department of Pharmacy, University of Malaya (UM), Universiti Kebangsaan Malaysia (UKM) and the International Medical University Malaysia (IMU) from 1998 to 2000. Dato’ Rajen has also served as a Course Director for Alternative Medicine at the Department of Pharmacy, UM. In October 1995, he began writing as a regular guest health columnist for The Sunday Star.

3. What trigger the company to spur into launching its high growth plan in the early stage of firm development?

The company was triggered to spur into launching its high growth plan in the early stage of firm development because of high currency exchange rates during that period. Even though the company managed to break even in 1998, it was badly affected by the 1997 Asian economic crisis. The company could no longer afford to rely on its trading business while fully outsourcing its products’ research and Indian business partners. Dato’ Rajen and his partners realized that, if their company was only maintaining its status quo and ignoring its future growth, it would not survive in the long run. They also agreed that the company needed to expand its sales to foreign countries and develop more of its own products.
Moreover, at that time, Dato’ Rajen and his partners have come up with the idea to develop new products that would support the high growth plan of the company based on their long experience in the herbal medicine industry.

4. Describe the business model using the business model canvas (9 elements) for HolistaCollTech.

The Holista CollTech’s businesses can be divided into two catagories. The first business is R&D outputs and licensing. The second of Holista CollTech’s business is the production and sales of its own brands of cosmetics and health supplements. The value proposition from R&D outputs and licensing business is Holista Biotech was the only company that had scientifically tested, validated and filed patents for the herb. The patents were crucial as a protection against imitators in the market, as only the company had the rights to using the indicators in its products. Moreover, the company was awarded the BioNexus status, which was a recognition granted to biotechnology firms that had fulfilled the criteria relating to biotechnology research and innovation set by the BiotechCorp, the agency responsible for monitoring BioNexus companies. The sale and production of the company’s own cosmetic and health supplements derives its product from plants and shrubs familiar to the local populace. In addition, the company also delivers first class natural ingredients and wellness products to its consumers. The customer segments can be divided into two groups. The first group of customer segments is producers who purchase licenses to use patented extracts in their own products like Nestle. Besides, Total Health Concept also initiated a partnership with the Malaysian company Furley, whose core business was supplying ingredients to the nutraceutical, pharmaceutical, and food and beverage industry. The second group of the customer segment is end-users or consumers. In term of channel, all Total Health Concept’s products had been distributed through pharmacies, but since the formation of Alterni, the company began to sell directly to the consumers. Total Health Concept believed that having two distribution channels would allow it to reach out to more consumers. In October 2006, Dr Rajen began writing a monthly column on biotechnology and business for The Edge, Malaysia’s largest business weekly. For Dato’ Rajen, being a guest writer at these publication lent credibility to herbal-based products in general, including his company’s products, and thus indirectly helped to market his company. Customer relationships are forged using thirty salespeople from Total Health Concept and Alterni. Salespeople from Total Health Concept continue to promote the company’s product to pharmacies while those from Alterni concentrate on selling the product directly to the customers. The key activities of the company are research and development (R&D) outputs and licensing and the sale, and production of the company’s own cosmetic and health supplements including generic products produced by other manufacturing companies. Key resources are its management team, financial grants received from venture capitalist and government agencies and its patents which were commercialize for monetary returns.
An important key partner for Total Health Concept was its first business partner, Dabur India Ltd which it helped market the latter’s products locally. Some of the company’s financial partners include Mayban Venture Capital, BiotechCorp and MTDC which helped fund the progress of the business. There are also research partners for example University of Mississippi, Indian Institute of Integrative Medicine (IIIM) and Universiti Sains Malaysia (USM) which the company collaborated with to research new products and finally local manufacturers which Total Health Concept signed non-disclosure agreements to produce its own products locally.
Cost structure of the company is mainly made up of research expenditure and wages to staff from operations, sales and research. Revenues streams are from licensing of research and development outputs, grants and the sale of cosmetics and health supplements sold at pharmacies or via its direct seling arm, Alterni.

5. What were the important milestones in Holista CollTech’s business life?

The important milestones in Holista CollTech’s business life can be categorized based on its business cycle. The trough phases was started by the established Total Health Concept Sdn. Bhd. (Total Health Concept) in April 1995. The company’s mission was to promote good health by enhancing the mental state of a person’s well-being and not only focusing on curing the physical illness. Total Health Concept started by being a sole distributor for Dabur India Ltd, which was India’s leading producer of ayurvedic and natural healthcare products. In addition, Total Health Concept also started to develop its own products. Its first product, a herbal toothpaste, was launched in 1995. In the same year, Total Health Concept launched its second product, Neem, which is a non- prescribed herbal medicine.
The next business cycle phase is business expansion which started in September 2000, as part of its move for higher growth, the company incorporated a subsidiary, Tropical Botanics Sdn Bhd (Tropical Botanics), to formalize the Group’s research activities. In 2001, the company introduced its third product, Pristin, a toxin-free fish oil, in the market. It was the first molecularly-distilled fish oil approved by the Malaysian Ministry of Health and also was the first fish gel marketed in Asia. After about two years of development, the company launched its fourth product, Bonex in 2002. The product was a purified hydrolyzed collagen made from bovine hide (cow) skin and it was certified as a halal product. Bonex was the company’s first collagen-based product and its production introduced the company to collagen. In April 2004, Holista Biotech launched Lacto-5, which became the top locally cultured beneficial bacteria-based product in the market by 2009. It was also the fastest selling probiotics in the market with a pending patent.
The year 2007 marked an important milestone in its middle business expansion phases for Holista Biotech Group’s development when the company filed four patents for its research on Kacip Fatimah in November 2007. Generally, it takes about two years for a patent to be granted, although the company can declare that its products’ patents are pending. Holista Biotech co- owned these patents with several IIIM Indian scientists. Moreover in July 2007, the company was awarded the BioNexus status, which was a recognition granted to biotechnology firms that had fulfilled the criteria relating to biotechnology research and innovation set by the BiotechCorp, the agency responsible for monitoring BioNexus companies.
Meanwhile, in year 2008, the company also launched Vavalert, which the company claimed to be the world’s first and only patented natural supplement made from cocoa extract that has been clinically proven to increase a person’s ability to memorize. Vavalert was manufactured using a patented Belgian process, Supercritical Fluid extraction, whereby theobromine was extracted naturally from cocoa beans. In the same year, Holista Biotech received a total of RM3 million (approximately USD1 million) grant, i.e. RM2.5 million from Biotech Corp and RM500,000 from Malaysian Technology Development Corporation (MTDC). In early 2008, Holista Biotech decided to take over an Australian company, CollTech Ltd. (CollTech), which has been listed on the Australia Stock Exchange (ASX) since 2004. CollTech, which was based in Perth, was a producer of sheep- based collagen, which Holista Biotech believed would have a potentially substantial demand in the future.
On July 13, 2009, the takeover of CollTech by Holista Biotech resulted in the listing of a newly merged company, Holista CollTech Ltd. It was a reverse stock takeover with swap shares and no capital was involved. However, after the listing, Holista CollTech group conducted a private placement in which it offered some of its shares to a group of investors to raise some money. The company managed to raise approximately AUD3 million (or RM7.5 million or about USD2.5 million, at the exchange rate of USD1 = RM3.0) through two private placements. Furthermore, in 2009, Holista CollTech had also obtained a US$6 million (RM20.34 million) grant in the US to conduct R&D on ovine collagen for wound dressing as an alternative to the existing bovine collagen. By September 2009, Holista CollTech was one of about 126 companies in Malaysia awarded with the BioNexus status . At that time, Holista CollTech had entered into an exclusive agreement to market the next generation mosquito larvae control, called MOUSTicideTM, which was a US trademark, for the Asia-Pacific region.

6. What drove the company’s progress from one milestone to another?

There were few internal and external factors that drove the company’s progress from one milestone to another. The first internal factor is the company’s ability to collaborate with other parties. The company’s past and present experience in working together with external parties was useful in managing cross- cultural collaborations. Moreover, the company’s many joint ventures had created a repository of innovations, which it could utilize in the future.
The second internal factor is Dr Rajen and his team’s ability to identify the opportunities. For example, in year 1998, Dato’ Rajen and his partners have come up with the idea to develop new products that would support the high growth plan of the company based on their long experience in the herbal medicine industry. However, by 2000, while trying to accomplish their company’s high growth plans, the partners realized that they could not depend exclusively on their own experiences and knowledge to move forward and there was a need to add depth to the company’s managerial and technical expertise. Thus, in 2000, Dato’ Rajen brought in Professor A.N. Rao, an Indian national who was a botany expert, as the group consultant.
Next is external factor which is the company effort to outsource. In the early days of their business ventures, most of the product concepts or market development ideas generally came from Dato’ Rajen and his partners, and through discussions with Professor Rao. However, with the setting up of the development team, new ideas were discussed with the R&D, marketing and sales teams, and their related product development activities were then outsourced to the company’s external networks and collaborators. The company did not operate its own R&D and manufacturing facilities because the owners believed that their company would function better without them and this provided more flexibility in outsourcing the activities to the best suppliers. At around the same time the company started seeking external consultation and conducting structured market research to make decisions regarding new product developments.
Last and not least, the company’s strong networking and outsourcing parties also had drove the company’s progress from one milestone to another. For example, through the business network of Professor Rao, Holista Biotech group managed to link up with the Council of Scientific and Industrial Research (CSIR) of India in the year 2004. The research collaboration was a R&D joint effort and was initiated through a MoA in the area of botany. CSIR was a premier R&D organization, with a chain of 38 laboratories in India, and was recognized as one of the world largest publicly funded R&D organization, with links to academic institutions, other R&D organizations and industry.

7. What were Holista CollTech’s competitive advantages? What are the factors that contribute to Holista CollTech’s current success?

There were few of the Holista CollTech’s competitive advantages available. First, Holista CollTech was the only producer of sheep (ovine) collagen worldwide using patented extraction methods. It was also in the process of developing a nano-encapsulated ovine collagen. Moreover, the company had also developed a ‘proof of concept’ for its electro-spin-based ovine collagen, which was a requirement for its future commercialization of collagen-based health products. As for the local medicinal plants, the company had filed four patents for Kacip Fatimah (Labisia pumila), which is a famous and popular local herb used by Malaysian women to enhance their health. The company had also filed patents for several other well-known herbs from the Malaysian rainforest, including Tongkat Ali (Eurycoma longifolia), Misai Kucing (Ortosiphon stamineus), and Senduduk (Melastoma malabathiricum). In addition, in July 2007, the company was awarded the BioNexus status, which was a recognition granted to biotechnology firms that had fulfilled the criteria relating to biotechnology research and innovation set by the BiotechCorp, the agency responsible for monitoring BioNexus companies. This allows for better market acceptance in local and foreign markets as the BioNexus award is not easily granted to biotechnology firms which stipulates that the firm must be involved in exploiting leading edge biotechnologies.
In general, there are few factors that contribute to Holista CollTech’s current success. The first factor is Dr Rajen and the team ability in problem discovery. As an example, prior to 2002, the company did not implement any systematic market research as the need for its products’ developments was based on the owner’s business instinct. On hindsight, Dato’ Rajen realized that this was one of the reasons why several of the company’s products failed in the markets.
The second factor is the company’s ability to increase value creation through collaborative entrepreneurship. For example, in early 2009, Holista Biotech began a joint research with Tsinghua University in Beijing, China, which focused on developing a sugar-free micro propagation of Kacip Fatimah and growing identical plantlets of the herb. These plantlets were to be supplied by Holista Biotech to the farmers so that they would be able to cultivate Kacip Fatimah on a large scale. This was one of the efforts taken by the company to ensure it would have a continuous supply of high-quality herb.
The third factor is Dr Rajen’s prior experience. For Dato’ Rajen, his company’s past and present experience in working together with external parties was useful in managing cross- cultural collaborations. He also added that the company’s many joint ventures had created a repository of innovations, which it could utilize in the future. The fourth factor is a continuous action that been taken by Dr Rajen and the team in ensuring Holista Biotech’s business sustainability. Holista CollTech aimed to further exploit the botanical and collagen technologies, to move more aggressively into the global market and be one of the main players on the Australian Stock Exchange (ASX). Next, the company’s research and development drive was instrumental in the success of the company. Rather than just rebranding existing products in the market, Holista CollTech invests time and money in the research of new products. This enables the company to be the only firm with the absolute rights to commercialize the results of their research as in the case when it started supplying its Kacip Fatimah extract to Nestle for its pre-mix coffee products. The fifth factor is Dr Rajen’s involvement in social networking. As an example, in March 2009, Dato’ Rajen’s appointment as the Deputy President II of Technopreneurs Association of Malaysia (TeAM) Biotech, an offshoot of TeAM has gave Dato’ Rajen the opportunity to meet other active players in the industry and learn from them and the current progress of their businesses. This has inspired him on how to grow his business further.
Lastly, the factor that contribute to Holista CollTech’s current success is the company effort to outsource. In the early days of their business ventures, most of the product concepts or market development ideas generally came from Dato’ Rajen and his partners, and through discussions with Professor Rao. However, with the setting up of the development team, new ideas were discussed with the R&D, marketing and sales teams, and their related product development activities were then outsourced to the company’s external networks and collaborators. The company did not operate its own R&D and manufacturing facilities because the owners believed that their company would function better without them and this provided more flexibility in outsourcing the activities to the best suppliers. At around the same time the company started seeking external consultation and conducting structured market research to make decisions regarding new product developments.

8. What were the problems faced by the company in late 2009? Using Porter’s five forces competitive model, analyze the herb extracts industry.

Holista Colltech was in a dilemma. The company faced a limited budget for future expansion. The company has to decide which direction to pursue with the limited funds and resources available to business. It is currently suffering from a low share price and faces difficulties in sourcing for funds especially in the biotechnology industry. Dr Rajen need to make a decision on which strategies his company should pursue to achieve its goals, whether the company’s revenues should be derived from its R&D outputs and licensing, or from the production and sales of its own brands of cosmetics and health supplements. He also needed to determine the timeframe to implement these strategies. Product development in health and cosmetics is well-known to have a long gestational period and requires huge investment. He also knew that marketing his company’s own cosmetics and health supplement brands was going to be difficult, since ‘copycat’ behavior was rampant in the industry. Most important, even if the products were launched, he knew that consumers were fickle and their needs could not be easily determined. In addition, the company’s main target customers were Malaysian and other Asian customers and they had the tendency to prefer foreign brand products. This was a difficult business situation for Holista CollTech, which was just about to build its own brands. However, Dato’ Rajen knew that postponing the development of his company’s own brands would result in an even longer delay in the future, as the number of potential competitors would certainly increase. Dato’ Rajen has to decide if the company was to concentrate in its research and development projects or the pool its resources behind a branding campaign to create a stronger image for its own products. Figure 1- Five Forces Analysis (Porter)- Research and Development Business

Figure 2-Five Forces Analysis (Porter)-Production and Sales of Own Brand of Cosmetics and Health Supplement Products In general, Holista Colltech’s business operations can be divided into two main categories which are the commercialization of research and development (R&D) outputs and licensing and the production and sales of its own cosmetics and health supplements. Its commercialization of research and development (R&D) i.e. for licensing business is unique as indicated by the very small number of patents filed for Malaysian herbs. For example, by 2009, only Holista CollTech had a patent pending on the Kacip Fatimah herb extract. One such commercialization activity with regards to this research is the company’s supply of Kacip Fatimah extract to Nestle for its pre-mix coffee products. In term of new business entrants of this segment, there are particularly low as research and development activities well-known to have a long gestational period and requires huge investment. There is also the possibility of failure and this discourages many competitors from embarking on this option. The results of successful research and development (R&D) activities usually results in patents which are exclusive to the originator for a period of time. This allows the company to fully maximise any marketing potential their findings have. The patents also eliminate any substitutes for the same period the patent is in existence therefore limiting substitute products which may exhibit or market the same benefits of the company’s original product, in this case Kacip Fatimah for Holista CollTech. Moreover, the patent provides protection for a predetermined period (20 years) which keeps their competitors at bay. This has caused the rivalry among existing competitors to be low. Finally, the bargaining power of buyers and sellers are low as the product is unique and in the case of Kacip Fatimah, easy to cultivate and matures in six months. Buyers will have to pay the price demanded by the company if buyers (manufacturers) want to use the patented findings (extract) in their final product. Bargaining power of sellers or suppliers of the raw material are also limited as the Kacip Fatimah plant is easy to cultivate and matures in six months. In addition, Holista Biotech has begun joint research with Tsinghua University Beijing for Kacip Fatimah propagation to ensure plentiful and stable sources of this plant in the near future. The second category is the marketing of Holista CollTech’s own brand of natural food and health supplements. This is where the company faces its hardest competition as copycat/imitator products are abundant and the target customers in Malaysia and Asia have a higher preference for foreign brands. For example, by 2009, there were many businesses in food and beverage that utilized herb extracts as condiments for their products. The market was also flooded with hundreds of herbal health supplements and cosmetics that claimed to use Kacip Fatimah extracts in their ingredients. Some businesses even claimed that their drink pre-mix contained both Kacip Fatimah extracts and collagen, which were the two main products of Holista CollTech. Therefore the threat of new entrants and substitute products is extremely high. Moreover, Holista CollTech’s target customers in Malaysia and Asia had a higher preference for foreign brand products. As a result, the bargaining power of buyers become high as the market for said products is very large so pricing becomes a major issue. In addition, rivalry among existing competitors is also high. This also meant that Holista CollTech not only had to compete with foreign companies, but it also had to compete against consumers’ perceptions. The only saving grace is that the number of suppliers is also high therefore limiting their bargaining power as sellers. 9. Which problem was the most significant threat? What caused these problems?
In my point of view, I strongly believed that the imitator products from other industry players was the most significant threat for Holista Colltech. It appeared that many Malaysian companies that produced herbal-based products were incline to imitate others. This occurred not only within the industry’s downstream (herb extracting activities), but also upstream of the value chain (herb-based product manufacturing), such as the food and drink, cosmetics and health supplements. As a result, the local herbal-based industry was more or less commoditized. Most industry players competed by imitating other successful firms’ products and offering similar products at lower prices. This practice has allowed them to gain initial profitability.
There were few factors that contributed to these problems. First, product development in health and cosmetics had a long gestational period and required heavy investments. Besides, it was difficult in getting funding within the biotechnology industry. That can be the main reason why other industry players preferred in doing imitation of other successful firms’ products. Moreover, Holista CollTech’s target customers in Malaysia and Asia had a higher preference for foreign brand products. As a result, the company would likely need to advertise and promote its products aggressively and this would certainly increase its costs. This also meant that Holista CollTech not only had to compete with foreign companies, but it also had to compete against consumers’ perceptions.

10. If you were the CEO, what would you do, and why? No. | Feasibility Analysis | Considerations | Option 1;R&D | Option 2; Marketing Campaign | 1 | Product | - Product desirability- Product in demand | YESYES | YESYES | 2 | Industry/Target Market | - Industry attractiveness- Target market attractiveness | YESYES | NONO | 3 | Organizational | - Management prowess- Resource sufficiency | YESNO | YESNO | 4 | Financial | - Total start-up cash needed- Financial performance of similar businesses- Financial attractiveness business venture | YES-YES | YESNONO |

By referring to the feasibility analysis done above, if I was the CEO, I will definitely pursue on R&D outputs and licensing. As we gone through, the commercialization of research and development (R&D) projects for licensing creates a unique product in the market. We have to take into account that Holista CollTech has a limited budget for future expansion. This limits the company’s ability to invest in new research and production facilities. As we can see, the company had fulfilled some of the important preconditions for survival in the biotechnology market which included being heavily involved in R&D. As a result, it had several patents filed, obtained capital through R&D grants, and was efficiently collaborating with external partners in R&D and manufacturing its products. As an example, the company already has already successful in the making ovine collagen. Thus, the management should continue its collaboration with its external partners to further exploit it into more marketable product. Therefore, the company should continue to outsource its research activities to the universities. It will allows the company to continue doing research and development in discovering new products without having to maintain a physical lab. In addition, the expertise, technology and facilities available in these institutions allow for a cost reduction of the long gestational periods which usually associated with research projects. Therefore, I would strongly again recommend that this is the best decision for Holista CollTech at this present moment.