Example Of Case Study On Situation Analysisgeneral Environmental Analysis
Valeant Pharmaceuticals International Company
Valeant is a decentralized and diverse pharmaceutical company that commits itself to key stakeholders while at the same time delivering a consistent high performance. The company’s values centers on providing overall direction and necessary tools to stay on the edge with its competitors (Santos slide 1). The values help the company to come up with its goals and vision. The company focused on dermatology, ophthalmology, dentistry and neurology. The company attributes its growth from acquisitions and series if mergers.
The company revolves around several segments that attribute to its continuous growth. The Intellectual property makes up for the major percentage of the company’s growth. It boasts of good responses towards value, inimitable, in substitutable, competitive consequences and performance implication (Valeant Pharmaceuticals International par 2). The other segments include innovation, acquisitions, marketing, HR practice, reputation and financial capital.
The company will attribute its growth in the next 5 to 10 years from acquisitions, marketing, and innovations. The three segments have a continuous growth and challenges that will help the company to root itself in becoming better than its competitors.
The major force that affects the firm is competition. Since it does not stand among the major pharmaceutical industries, the company has to try and woe in new customers. Apart from that, it has a huge task of outdoing the major competitors. The next force is the customers. The company has a hard task in trying to expand into new territories because of acceptance. Most customers stick to their main products, and it is hard for them to change. The third force is the economy, which affects most companies. The fourth force is laws that govern products and new companies especially to newcomers. The final force is internal problems that affect the company’s ability to perform.
The main competitor for the company is the Teva Pharmaceutical Industries (Santos slide 4). It stands out as the largest maker of generic drugs across the globe. It made almost 14 billion in annual sales in 2014. It attributes its success to its market share and the expansion of its branded products. It enjoys continued publicity from the media and word of mouth. The company has great strategic alliances with other companies which in turn boosts their presence and market share. It benefits them as well as their partners.
The second competitor is the UCB pharmaceutical industry (Santos slide 4). Its main work revolves around the integration of biology and chemistry to come up with deeper insights towards categories in severe diseases. It focuses mainly on R&D and has nine products in its production pipeline. It had a collective annual sales of close to $4.2 billion in 2014. The main benefit for the company is the ability to gather great research for common diseases such as cancer and diabetes. Recent years show an increase in the two cases and researchers are on toes to come up with a solution to the problems.
The other competitors include Forest Labs, Allergen, Novarts and Roche Pharmaceuticals (Valeant Pharmaceuticals International, Inc Competition par 4). They have a better edge in terms of customer base and products in the market. However, they are not big league competitions, and the company can easily outdo them with a good strategy.
The company has more than 7500 employees and over 900 products in its product base (Valeant Pharmaceuticals par 5). It has a strong product pipeline that compose of many molecules in its final development stages. The latest acquisitions have made a greater impact on their general view on the market. They specialize in neurology and dermatology adds to their strengths in the general market share. They have manufacturing plants in Brazil, Poland, Canada, and Mexico.
The major weakness for the company is a limitation of presence in emerging markets (Valeant Pharmaceuticals par 6). The markets have a major potential that will benefit the company at large, but the competitors have a better advantage to them. The company relies heavily on America for its revenue generation; without the County, the company will sink in its debts.
The company has a possibility of venturing into newer markets such as Brazil and Russia from their recent acquisitions (Valeant Pharmaceuticals par 7). Most of the acquisitions have a good customer base in its parent country. The company will benefit greatly from generic and over-the-counter drugs because the demand keeps going higher and higher by the day. That will in turn affect their revenue positively as well as the customer base. The rise in usage of drugs comes from the population increase of aging people. The number has a steady growth, unlike earlier years.
The major threat to the company is the US health reforms (Valeant Pharmaceuticals par 8). The slow economy of the countries affects the healthcare industry by reducing the spending towards drugs. The strong competition from other established companies makes it hard for the company to have better returns. Most people tend to go for established brands because of its good history and the fear of testing out newer brands.
The company spans around four major customer base. The biggest customer base is the pharmacies (Gonzalez slide 3). They have a larger share of the company’s profitability because they sell most of their over-the-counter drugs. The second customer base is physicians. They give great recommendations to their patients to buy the company’s products. They play a major part of marketing through word of mouth. Apart from that, they stock their shelves with the company’s products and sell them to patients. The third customer base is the Pharmacy benefits managers. They play the role of best drug recommendation. Most hospitals take their word when it comes to the accusation of newer or better drugs. The last customer base is patients. They control the market through buying of the company’s products. It is through them that the other customer bases benefit as well as the company. They help in marketing the company’s products through word of mouth and recommendations.
Current business strategy
One of the company’s strategy is differentiation (Valeant Pharmaceuticals International par 9). The company boasts of more than 500 products under its portfolio belt. The products have a unique mechanism of action and formulation that make them distinctive from tits competitors. The benefit of these is the customers have a guarantee of good products in the end. The other strategy is acquisitions. Every company looks towards being greater and better them the competition. With acquisitions, the company has a better chance of continuous growth. The last strategy the company has is diversifying their products. The company seeks to open up its customer base and cover other areas of the globe.
The company can focus more on marketing its products. Diversification is good but having a good market base before bringing in the products will help in the increase of sales. Good marketing will ensure the company has a good customer base for its products. The next thing the company should focus on is a partnership. It is almost equal to acquisition but has a better ground in terms of acceptance in a new area. Partnering up with other pharmaceutical companies will help their products gain popularity among the people.
CapitalCube. Valeant Pharmaceuticals (VRX) Earnings Analysis. 24 February 2014. Web. 7 April 2015. < http://www.capitalcube.com/blog/index.php/valeant-pharmaceuticals-vrx-earnings-analysis/>
Gonzalez, Masayi. Strategy Recommendation. 26 May 2014. Presentation. 7 April 2015. <https://prezi.com/osatcmjhttkb/strategy-recommendation/>
Santos, Chelsea. Valeant Pharmaceuticals International Inc. 27 February 2015. Presentation. 7 April 2015. <https://prezi.com/t4qf3feg4nb3/valeant-pharmaceuticals-international-inc/>
Valeant Pharmaceuticals. 2014. Web. 7 April 2015. <http://www.mbaskool.com/brandguide/pharmaceuticals-and-healthcare/3315-valeant-pharmaceuticals.html>
Valeant Pharmaceuticals International. 2015. Web. 7 April 2015. < http://www.vault.com/company-profiles/pharmaceuticals-and-biotechnology/valeant-pharmaceuticals-international/company-overview.aspx>
Valeant Pharmaceuticals International, Inc. Competition. 2015. Web. 7 April 2015. < http://www.hoovers.com/company-information/cs/competition.Valeant_Pharmaceuticals_International_Inc.02627b70db0dafac.html>
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