# Forecasting DENOSUMAB Harvard Case Solution & Analysis

## Forecasting Denosumab Case solution

Introduction

It was founded 1983

It had been a profitable company and had ten drugs approved for sales in the US, all producing considerable sales, until 2011 when the sales for its products were not increasing and patent for its product were to expire. All these issues affected the share price of the company as its share value fell to \$55 per share from \$85 in 2011.
Amgen planned to launch a new promising product that could allow them to grow. The product was made up of an element named “Denosumab”, which took sixteen years to launch. The product was to be branded under names “Prolia” and “Xgeva”. Experts believed that the products could be very effective and optimistic for patients with Osteoporosis and Metastases.

Therefore,before launching the product completely in the market, Amgen required sales forecast the products to ensure that the product was profitable and to produce as much as the demand would be.

Question.1)

Outline how the sales of a new product can be forecast?

Forecasting

It means to estimate a future demand by predicting what the customers are likely to do in a set environment in future.

Process of Sales Forecasting

The steps involved in preparing a forecast for sales revenue are as following;

1. Setting Goals

Setting goals means to select appropriate targets for the product, it involves selection of customers whom we are going to target for sales revenue. The targeted customers are those who would most likely buy our product under given conditions.

Following are steps to determine your customers;

 Understanding what is the use of our product. This may involve the benefit that our product provides or any problem that our product or service can solve for the customer.

 After that we need to find out the different types of people who are facing the problem that our product can solve for them or those who will benefit from consuming our product. These people can be further subdivided as per there locations, worth or stakes or sectors and etc.

 Search for the market where we can find the types of people that we believe can be our customers. After determining those markets, divide them into different segments as per the requirements of the customers. For e.g. based on the quality they desired and the price they are willing to pay.

 Preparing goal for our products that will satisfy the requirements of potential customers.

Gathering and Analysis of Data

Data for forecasting sales can be gathered in different ways, it includes

 Extracting data from the past performance of the company

 Using data from a competitors statements to assess the growth of similar projects already in the market

 Asking the sales persons who are actually observing the market from very close about their opinion for the product.

3. Selection and Use of Appropriate Forecasting Techniques

Techniques

Qualitative Techniques

Qualitative techniques involve use of judgment, knowledge of experienced peoples and other non-quantitative data to prepare a sales forecast for our product. It involves following methods;

• Consumer/User Survey Method

Different surveys are conducted by the company to assess the demand of the customer and to understand what they want from the products of the company.

• Jury for Executive Opinion

As people of different departments in a company sit together to prepare a sales forecast, this meeting is regarded as Jury of Executive panel. It can be of great value when the demand is expected to be changed or for launch of a new product or when the quantitative data is not available for the product.........................

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