Functional Area

Question:

Describe about the Strategic Management: Home Pharmaceuticals Case Study?

1.0 Gap Analysis I

1.1 Capability Gap Analysis Table

Capability 1. Manufacturing: Home Pharmaceuticals is doing well in its manufacturing of It’s products of varied quality such as OTC, Food health supplement etc. The other competitors are also working well on their own fronts as they are big players of the market and have strong finance background to support the various functioning of their companies.  

Capability 2. Research and development: Home Pharmaceuticals is working heavily in the development of the products to offer its customers nationally and even to expand its market share by diversifying its business by selling its innovative and technologically advanced products globally. The competitors of Home Pharmaceuticals are also spending on research and development as they also want to expand their market share as they even now are operating in many countries (Zutshi, 2005). So to cater the needs of different customers’ proper research has to be done to cover large market share and have competitive advantage over the other competitors.

Capability 3. Sales and distribution:  Home pharmaceuticals have a strong sales and distribution network but it is working within national boundaries. On the other hand the competitors are working globally so have a better state of working with competent sales and distribution network (Wheelen, 2011). For being competitive and even to attain huge share in the market the company has to take proactive steps to keep its working strong and even have to adopt newer means of being in touch with the customers like the other competitors are doing by providing online services for being in constant touch with the customers.

Capability 4. Human Resource management: Home Pharmaceuticals is having a loyal and committed staff that are willing to work but the general management staff of the company is not well versed with the global culture and lack experience on that front. Home pharmaceuticals had to develop its competency level so as to work globally (Hendry, 2004). The competitors are already working in various countries and are having competitive staff to work on global level. This is a threat situation for Home Pharmaceuticals and it should be taken care of to remain in competition in the market. 

Capability 5. Advertising:  Home pharmaceuticals are spending considerable amount on advertising for various products within the country and has strong prospects for the future.  All the competitors are also spending heavily on advertising as they are working in many countries and secondly government is also providing aids, support and relaxations from the government.

2.1 Capability matching:

Discuss each of the total rankings above. Why was one higher than the other? How did the relationship between KSFs and the capability influence your answer?

The most rated capability was related to advertising and sales and distribution as Home pharmaceuticals is working hard with its innovated technique to expand its business out of Malaysia. The answer is influence by the KSF and capability relationship as they both are working with combined efforts for strengthening the growth of the company. 

3.1 Choose five strategies:

1. Digital marketing strategies: Home pharmaceuticals for increasing its market share and availing the opportunities provided by the government should work to become technologically advanced. It should increase the efficiency and effectiveness of its marketing strategy by using digital and social media and make their marketing efforts more integrated (Youndt, 1996).  By doing so they can reduce the cost of advertising and even costs related to other overheads and become more effective in being constant touch with the customers. By using this strategy even their sales channels will become more effective.

Capability

2. Sales representative approach strategy: Under this kind of strategy the sales representatives of the company conducts regular visits to the doctors, chemists and hospital with free samples of the products produced in their companies. Pharmaceutical companies all over the world are adopting this technique for increasing the number of their clients and even for promoting their brands (Freeman, 2010). Other promotional approach adopted by companies is providing the clients with expensive foreign trips and meals etc.

3. Mobile sales platform strategy: This strategy allows a continuous interaction between the company and the physicians. It is quite an interactive approach conducted through the use of social media platforms through which companies use social media forms for e-detailing. These platforms offer sales integration techniques which results in building strong customer relationships. It even allows the companies to maintain its customer relationship management data which can be very useful in dealing with clients spread worldwide (BurgeSmani, 2004).

4. Market assessment and commercial strategy: This strategy will work with an approach of combining the knowledge of pharmaceutical sector with the future market trends to have a proactive approach for dealing with future scenarios in which the clients of the company will be operating in the near future (Rugman, 2005). This approach will help in laying a base of solid foundation for building factors that will result in the success of business in the market.  Leverage is provided by prioritising present assets of the company for maximizing their value and the ways that will fill the gaps between the desired and the actual performances of the company.

5. Product and portfolio management through the life cycle: In this strategy the advice and recommendations are provided for the effective management of the assets of the company. The advice is provided on both on single product basis and even for an overall portfolio with the utilization of intense experience of the company on value management in pharmaceutical sector (Atuahene, 1996). This discussion helps the company in the accurate identification of product or overall portfolio assets strategy which will offer the perfect fit and value adding options for various assets of the company in future.

3.2 Prepare Matrixes:

Corporate Level Matrix

Home Pharmaceuticals is using the approach of innovation and being proactive he laid the foundation stones of innovative culture in the Home Pharmaceuticals with an aim of expanding itself worldwide. The company is progressing through its research and development into new and innovative products that includes bio-medical and health food supplements (HFS). In recent years it has also worked for manufacturing of radically innovative hearing devices (HD). 

2. What product & services does it plan to produce?

The home pharmaceuticals for now are manufacturing products like health food supplements, OTC drugs and are working for the manufacture of Hearing devices. The company has a potential of manufacturing other products also which are allowed in Malaysia such as prescribed medicines, over the counter products, medicines that are being manufactured in the country since many years. Home Pharmaceuticals also manufactures proprietary drugs and generics that are manufactured locally by the company as these are generally imported in the country (Pearce, 2000).

Home Pharmaceuticals

3. What customers does it plan to service?

Home pharmaceuticals with its core products is not targeting any specific segment but due to its varied range of products the such as food-health supplements is for all age people as due to extra health consciousness people are diverting their interest towards food health supplements instead of intake of food in real. The company can easily serve customers of various classes and age groups as the government also is extending its schemes for basic health insurances (Teece, 1997).  Home pharmaceuticals can even expand its operations by taking active part in the research and development activities conducted by Australian pharmaceutical industry.

4. Which generic strategies will it follow?

5. i) Cost leadership strategy: This strategy works with a principle of being a low cost producer with the high quality product in a particular industry.  The basic of firms adopting this strategy is attaining market share by keeping the prices of the product of the company lower than the prices of the competitors (Ansoff, 1990). The other way of using this strategy successfully is selling the products at averages prices in an industry for having higher profits than the competitors in the industry.

ii) Differentiation strategy: This strategy works on the phenomenon of providing the customers with different products with unique attributes that are not being offered by any one especially the competitors in the industry. Due to the unique features of the product the company can charge premium prices with the customers if the customers feel that the product offered is better than the products offered by any other company.  In this way the firms can cover the extra costs incurred by them in the manufacture of the products on the basis of the unique features of the product.

iii)  Focus Strategy: This strategy works with an aim of focussing on a small segment from the large market and within that market segment the companies can attain a situation of cost advantage or differentiation.  This strategy if adopted by the firm leads to higher customer loyalty and higher costs can be charged from the customers due to non-availability of any close substitute in the market (Keller, 2011).  The success achieved through this strategy will lead the firm in making products of broad range with high level development of products in terms of its qualities and prices. 5. What position in the industry will it occupy?

The Home Pharmaceuticals is having a strong position in the domestic market of Malaysia as the company is offering its services to the customers since many years. It has a relatively flat structure of working with a small SBU staff that quickly responds to the attacks of competitors. Home pharmaceutical is holding a different position as it provides major manufacturing facilities in Kuala Lumpur with facilities of manufacturing and product distribution.   

References:

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