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3.Pharmaceutical Company Business Strategies

What’s the secret behind successes? For one, the company operates in niche formulations (chronic) segments such as psychiatry, cardiovascular, gastroenterology and neurology. While most of the top Indian companies have focused on antibiotics and anti–invectives (acute), Sun Pharma focused on therapeutic areas such as depression, hypertension and cancer. The company has introduced the entire range of products and has gained leadership position in each of these areas. Being a specialty company insulates Sun Pharma from the industry growth. The first quarter results for FY02 explain this to some extent. While the industry was affected to a large extent by a slowdown in the domestic formulations market, Sun Pharma logged a growth of 26% in revenues. Over the years Sun has also used the strategy of acquisitions and mergers to grow quickly. It acquired Knoll Pharma’s bulk drug facility, Gujarat Lyka Organics, 51.5% in M. J. Pharma, merged TamilNadu Dadha Pharma & Milmet Labs and acquired Natco’s brands. Post Merger with TamilNadu Dadha Pharma the company gained presence in gynecology and oncology segments.

The bases of marketing strategies can be best described in these two models in both acute and chronic segments:

(i) Super Core Model involving the search for, and distribution of a small number of drugs from Chronic Threapy Area that achieve substantial global sales. The success of this model depends on achieving large returns from a small number of drugs in order to pay for the high cost of the drug discovery and development process for a large number of patients. Total revenues are highly dependant on sales from a small number of drugs. This model incorporates highly specialized approach in all the manner . Initially the competition is seems more at entry level but since growth is stable and more in this area ; every company is striving very hard to enter in this area. The major strategy in this model involves right focus to highly specialized customer by well trained team.

(ii) Core Model in which a larger number of drugs from Acute Threapy Area are marketed to big diversified markets. The advantage of this model is that its success is not dependant on sales of a small number of drugs. Here presenting a large number of product and taking the advantage of opportunity cost is one of the important strategy. Other strategy includes daily reminders to cross the perceptual filter and get the brand name in to the sub-conscious state of mind .

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