Blog Post 15

Part 1: 

The facts:

  • Neem is indigenous to India and is considered sacred
  • neem used extensively over the past 2,000 years for medicinal purposes, food production, toiletries, fuel, and pesticides. 
  • Neem products used widely across India and the industry as a whole employs many poor people
  • Chetan operates a small business of neem tree products
  • Chetan’s family has owned this business for the last seven generations
  • The business employs 60 people in different functions
  • Despite being familiar with over 200 applications of the tree and its derivatives, Chetan does not know the exact name of the neem seed extract, Azadirachtin. 
  • Ten years ago, Tom Johnson (OOPS) discovered the neem seeds’ use as a potent pesticide. 
  • Tom received a patent for the pesticide formula and brought the product to market
  • They have a worldwide patent and financial capital to manufacture and sell the product on a large scale.
  • People are likely to prefer buying products from US companies over small Indian cottage, affecting Chetan’s business

Stakeholders:

  • OOPS
    • Prof: Make a lot of money
      • Gain a huge market share
    • Personal: Also make money
  • Chetan
    • Prof: Keep his employees, and provide goods to his community, make money
    • Personal: Keep his employee’s jobs and put food on his family’s table
  • Chetan’s employees
    • Prof: Want to keep their jobs 
    • Pers: Need money for their families
  • Other Indian growers of neem trees
    • Prof: money/job security
    • Personal: feeding families, social worth
  • Secondary Stakeholders:
  • Competing companies (Chetan could help them instead)
  • Consumers in India

Solutions:

1. Try to design a new molecule that is different

Pros: Even a slightly different molecule is then patentable and Chetan can compete with OOPS. Chetan maintains his market control and can keep his employees and business.

Cons: Requires a lot of capital, and no guarantee new molecule exists

Ethics: It’s a risk to try this, but ethically you are trying to save your employees jobs and your family’s income.

2. Fight the patent

Pros: OOPS patented a molecule that wasn’t native to their country, therefore Chetan has some ground to stand on to fight the patent. If he wins, he can continue his business as usual.

Cons: Requires a lot of money to do so, and no guarantee the patent is reversed.

3. Work out a deal

Pros: Can possibly get OOPS to drop the royalty so the business can return as normal

Cons: No guarantee OOPS agrees to the deal, could increase royalty.

Speak to an expert:

We asked Prof. Cheng what she would do, and she stated that she would try to reverse the patent. She also believes that the patent is reversible, and at the minimum, the patent should only apply to the exact pesticide formula that they sell.

My solution choice:

I would also try to fight the patent. I believe that Chetan has solid ground to stand on, and the patent, if it stands, would only apply to the pesticide formula. This solution begins by Chetan gathering capatial to get a patent lawyer to help with the case. I don’t know the direct pathway to do this, but that’s the job of the lawyer. After the results come back Chetan can hopefully return to business as usual and support his family and emplyees.

 

Part 2:

The facts: 

  • Six months after launch, OOPS is crushing the Indian market.
  • OOPS now has over 20 different neem-based products being sold through partnerships with supermarket chains.
  • Tom refused to abandon the market but was open to collaboration if it would help him make more money
  • Chetan’s business is suffering and he will likely have to lay off half of his staff at the end of the month.
  • Chetan’s employees saw him meet with Tom Johnson several times and believe that he has cut some kind of a deal with OOPS.

The stakeholders: 

  • OOPS
    • Prof: Make a lot of money
      • Gain a huge market share
    • Personal: Also make money
  • Chetan
    • Prof: Keep his employees, and provide goods to his community, make money
    • Personal: Keep his employee’s jobs and put food on his family’s table
  • Chetan’s employees
    • Prof: Want to keep their jobs 
    • Pers: Need money for their families
  • Other Indian growers of neem trees
    • Prof: money/job security
    • Personal: feeding families, social worth
  • Secondary Stakeholders:
  • Competing companies (Chetan could help them instead)
  • Consumers in India

Solutions: 

1. Do the deal with OOPS

Pros: Save money, stay in business, keep employees

Cons: Employees lose faith in Chetan, OOPS has control over Chetan

2. Focus on one product

Pros: Can possibly survive by only focusing on one item, reduce the production cost of it, and sell it for a lower price than OOPS and gain market control

Cons: Not guaranteed to work, and if this plan doesn’t work, Chetan and his business will go broke.

3. Don’t do the deal with OOPS

Pros: Chetan saves his name and doesn’t sell out to OOPS

Cons: His business will probably go bankrupt and he will lose his employees and business

Speak with an expert: 

I asked my friend from Penn State that works on his own global social venture and he stated that he would do the deal with OOPS, becuase while some people may think that you sold out, at the end of the day, you keep your business, food on the table, and your employees.

My choice and the following actions: 

I would also do the deal with OOPS. Although OOPS may be the villain in this story, in order for Chetan to keep his own income, the income of all of his employees, and the business that has been passed down for generations. I would work out what figure keeps Chetan in business and make that the bottom line for the deal. Tom will not leave the market, so as the saying goes, “If you can’t beat them, join them”, and I feel that applies to this situation very well.

 

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