Communication Process of NOVARTIS
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Transcript of Communication Process of NOVARTIS
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CHAPTER 01 - INTRODUCTION
1.1 INTRODUCTION
Bangladesh pharmaceutical industry is mainly dominated by domestic manufacturers. Of the
total pharmaceutical market of Bangladesh, the local companies are enjoying a market share
reaching around 80%, while the MNCs are having a market share of 20%. Out of the top ten
pharmaceutical companies in Bangladesh, eight are local pharmaceutical companies, while
only two are MNCs. There are several sectors on which Bangladesh can be proud of and
undoubtedly the pharmaceutical sector is one of these sectors, rather it is the sector, which is
the second-largest contributor to the government exchequer.
Novartis International AG is a multinational pharmaceutical company based in Basel,
Switzerland, ranking number one in revenues, which accounted over $53 billion in 2008, and
number three in sales, which accounted 36.172 billon in 2008. Novartis is one of the largest
healthcare companies in the world and a leading giant among pharmaceutical companies.
Novartis produces medications for many diseases, cancer and cardiovascular medications that
make up the bulk of sales. These medications include blockbuster drugs Gleevec and Diovan,
which will benefit people who are more susceptible to cancer or cardiovascular problems. In
addition to their current drugs, Novartis has one of the strongest pipelines in the
pharmaceutical industry, with over 50 new products set to premier in the next several years.
In 1973 the Ciba Geigy (Bangladesh) was registered as a joint stock company (Novartis
Bangladesh website). It then launched researched pharmaceutical products in the Bangladeshi
market. In 1986 Ciba Geigy introduced its first generic product in the Bangladeshi market,
Servipham. The company began to export its products from Bangladesh in 1995. In 1997,
Ciba Geigy and Sandoz merged to form Novartis (Bangladesh) Limited and introduced its
first OTC product. In 2000, Novartis (Bangladesh) Limited became the first pharmaceutical
company in Bangladesh to be awarded the EU GMP certification.
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1.2 SCOPE & OBJECTIVES OF THE STUDY
My broad objective is to know the multinational companies internal and external
communication process in both home and host country. What is the marketing policy that
they apply for success in the host country? How a multinational company adapt in the host
country culture.
The scope of this term research paper is to present the text contents from different source
rather than fully textual basis. The company‘s website, company profile by employees are
found to complete this term research paper. The scope of arranging the term research paper is
condensed that the scope is only limited to secondary source of cyber information.
1.3 METHODOLOGY OF THE STUDY
As I mentioned earlier, that the prime source for the term research paper content is the
secondary source called internet. It is really not easy to find the ultimate information from
internet. The searching criteria must be different. There are various types of PDF and
document files which contain only the text I have typed in the search box but the rest of the
file is totally useless for the term research paper. The search for Power Point Slides also helps
to understand the main points and probable information which I need to present on the term
research paper. The PowerPoint also helps to get the graphs and statistics in an easy way.
1.4 LIMITATION OF THE STUDY
There are few limitations of this report for which the findings of the study may not represent
the complete scenario of the positioning activities. The limitations are summarized below:
The Marketing and Finance Departments are core units of the Pharma division of
Novartis. So most of the information is confidential and is not communicable
publicly.
Most of the tasks of this unit involve negotiating with the third parties (Clients)
which require being an employee of Novartis Pharmaceuticals. So, as an Internee, I
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could not participate in those activities directly, I just had the basic concepts from
interviewing.Novartis (Bangladesh) Limited has three core divisions working in
Bangladesh i.e.
Pharmaceuticals (branded and patented products), Sandoz (generic products) and
Consumer Health. As the Internship was performed in the Pharmaceutical division,
the strategies of the other two divisions were not included in this report.
In the following parts of this report, various aspects of Novartis (Bangladesh) Limited are
illustrated and the full work flow of the Marketing department is described.
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CHAPTER 02 - DISCUSSION : AN OVERVIEW OF NOVARTIS
2.1 AN OVERVIEW NOVARTIS GLOBAL
Novartis International AG is a multinational pharmaceutical company based in Basel,
Switzerland, ranking number one in revenues, which accounted over $53 billion in 2008, and
number three in sales, which accounted 36.172 billon in 2008. Novartis is one of the largest
healthcare companies in the world and a leading giant among pharmaceutical companies.
Novartis produces medications for many diseases, cancer and cardiovascular medications that
make up the bulk of sales. These medications include blockbuster drugs Gleevec and Diovan,
which will benefit people who are more susceptible to cancer or cardiovascular problems. In
addition to their current drugs, Novartis has one of the strongest pipelines in the
pharmaceutical industry, with over 50 new products set to premier in the next several years.
Novartis is different from any other major pharmaceutical company in that it also has a strong
presence in the generic market. Sandoz - one of its divisions - brought in 18% of the
company's total sales in 2008. With $7.6 billion in annual sales, Sandoz is the largest generic
manufacturer under a major pharmaceutical company. This investment in the generic market
allows Novartis to be somewhat insulated from patent expiration. At the same time, however,
the investment in generics may complicate Novartis's stance towards patent issues since it has
large stakes on both sides of the issue.
2.1.1 HISTORY OF NOVARTIS
Novartis was created in 1996 from the merger of Ciba-Geigy and Sandoz Laboratories, both
Swiss companies with long histories. At the time it was said to be the largest corporate
merger in history. Ciba-Geigy was formed in 1970 by the merger of J. R. Geigy Ltd (founded
in Basel in 1758) and Ciba (founded in Basel in 1859). Combining the histories of the merger
partners, the company‘s effective history spans 250 years.
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Ciba-Geigy
Johann Rudolf Geigy-Gemuseus began trading in 1758 in materials, chemicals, dyes
and drugs of all kinds in Basel, Switzerland. Johann Rudolf Geigy-Merian and Johann
Muller-Pack acquired a site in Basel in 1857, where they built a dyewood mill and a
dye extraction plant. Two years later, they began the production of synthetic fuchsine.
In 1901, they formed the public limited company Geigy and the name of the company
was changed to J. R. Geigy Ltd in 1914.
In 1859 Alexander Clavel took up the production of fuchsine in his factory for silk-
dyeing works in Basel. In 1864, a new site for the production of synthetic dyes was
constructed, and in 1873, Clavel sold his dye factory to the new company
Bindschedler & Busch. In 1884 Bindschedler & Busch is transformed into a joint-
stock company with the name ―Gesellschaft für Chemische Industrie Basel‖
(Company for Chemical Industry Basel). The abbreviation Ciba was adopted as the
company‘s name in 1945.
In 1925 J. R. Geigy Ltd. began producing textile auxiliaries an activity which Ciba
took up in 1928.
In 1939, Geigy chemist Paul Hermann Müller discovered that DDT was effective
against malaria-bearing insects. He received the Nobel Prize in Medicine for this
work in 1948.
Ciba and Geigy merged in 1971 to form Ciba Geigy Ltd., and this company merged
with Sandoz in 1996 to form Novartis.
Sandoz
The Chemiefirma Kern & Sandoz (―Kern & Sandoz Chemistry Firm‖) was founded in
1886 by Dr. Alfred Kern and Edouard Sandoz. The first dyes manufactured there
were alizarine blue and auramine. After Kern‘s death, the partnership became the
corporation Chemische Fabrik vormals Sandoz in 1895. The company began
producing the fever-reducing drug antipyrin in the same year. Further pharmaceutical
research began in 1917.
Between the World Wars, Gynergen (1921) and Calcium-Sandoz (1929) were brought
to market. Sandoz also produced chemicals for textiles, paper, and leather, beginning
in 1929. In 1939, they began producing agricultural chemicals.
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The psychedelic effects of lysergic acid diethylamide (LSD) were discovered at the
Sandoz laboratories in 1943 by Albert Hofmann. Sandoz began clinical trials, and
marketed the substance, from 1947 through the mid 1960s, under the name Delysid as
a psychiatric drug, thought useful for treating a wide variety of mental ailments, from
alcoholism to sexual deviancy. Sandoz suggested in its literature that psychiatrists
take LSD themselves, to gain a better subjective understanding of the schizophrenic
experience, and many did exactly that. Research on LSD peaked in the 1950s and
early 1960s. Sandoz withdrew the drug from the market in the mid 1960s.
Sandoz opened its first foreign offices in 1964.
In 1967, Sandoz merged with Wander AG (known for Ovomaltine and Isostar).
Sandoz acquired the companies Delmark, Wasabröd (a Swedish manufacturer of crisp
bread), and Gerber Products Company.
On 1 November 1986, a fire broke out in a production plant storage room, which led
to a large amount of pesticide being released into the upper RhineRiver. This
exposure killed many fish and aquatic lives..
In 1995, Sandoz spun off its speciality chemicals business to form Clariant.
Subsequently, in 1997, Clariant merged with the speciality chemicals business that
was spun off from Hoechst AG in Germany.
Novartis
On March 7, 1996, the news shook the business world. It has been formally announced that,
Sandoz and Ciba, two proud Swiss based companies with almost three hundred years of
tradition, agreed to integrate to become one. The creation of Novartis was at that time one of
the largest corporate merger in the history. Ciba-Geigy Ltd. and Sandoz both have a colorful
and rich history spanning more than hundred years. Preceding the merger, there were months
of top-secret negotiations and meetings of the minds on a bold strategic move.
With the approval of the EU and US Federal Trade Commission, Novartis finally came into
existence on December 20, 1996, clearing all the regulatory hurdles of the merger.
Headquartered in Basel, Switzerland, Novartis innovates for the benefits of its customers. It
operates through 360 affiliates in 140 countries and offers its products through its
Pharmaceuticals, Generics, consumer Health, CIBA Vision, Animal Health and Business
Development & Licensing Unit.
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2.1.2 MAJOR FUNCTIONS OF NOVARTIS LIMITED
At present, Novartis is one of the top 5 global pharmaceutical companies in the world. The
complementary healthcare businesses of Novartis address the changing needs of patients and
societies worldwide. With innovative pharmaceuticals at the core, Novartis is also a global
leader in generics, vaccines and consumer health products.
Businesses:
Pharmaceuticals: The Pharmaceuticals Division of Novartis is recognized worldwide for the
innovative medicines provided to patients, physicians and healthcare organizations. This
business develops and markets patent-protected prescription drugs for important health needs.
The products are concentrated in major therapeutic areas:
1. Cardiovascular and Metabolism
2. Oncology and Hematology
3. Neuroscience and Ophthalmics (NSO)
4. Respiratory
5. Immunology and Infectious Diseases (IID)
The current product portfolio includes more than 45 key marketed products, many of which
are leaders in their respective therapeutic areas. The product development pipeline involves
about 155 projects in various stages of clinical development – including potential new
products as well as potential new indications or formulations for existing products.
Vaccines and Diagnostics: The Novartis Vaccines and Diagnostics Division provides more
than 20 products to fight vaccine-preventable viral and bacterial diseases, and makes
sophisticated equipment to test blood donations for infections. Novartis formed this division
when it acquired Chiron Corporation in 2006.The division consists of two businesses:
º Novartis Vaccines and Chiron
º The blood testing business.
Sandoz: Novartis is the only pharmaceutical company with a global leadership position in
both patented prescription and generic pharmaceuticals. Sandoz plays a critical role in the
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Novartis strategy of offering a range of treatment options to patients, physicians and
healthcare providers worldwide. This broad portfolio helps to make affordable, high-quality
medicines available to patients around the world and stabilize healthcare systems.
There are two main elements to the Sandoz business strategy:
1. Global reach and reputation: In addition to its unique position within Novartis, Sandoz
benefits from a strong global presence and powerful brand recognition worldwide.
2. Unique expertise: Sandoz differentiates itself through its ability to develop and produce
difficult-to-make medicines. Sandoz is the pioneer of biosimilars — follow-on versions of
biopharmaceuticals following patent expiry — with the first two marketed products (human
growth hormone Omnitrope and anemia medicine Binocrit). A third product, oncology
medicine Zarzio, was approved in 2009.
Consumer Health: The Consumer Health Division creates, develops and manufactures a
wide range of products designed to restore, maintain or improve the health and well-being of
the customers.
The division focuses on three business units:
1. Over-the-Counter: Novartis Consumer Health, Inc. is a world leader in consumer
healthcare, providing self-medication products for the treatment and prevention of common
illness and conditions, and the enhancement of overall health and well-being.
2. Animal Health: Novartis Animal Health focused on the well-being of companion animals
and on the health and productivity of farm animals.
3. CIBA Vision: CIBA Vision is a global leader in the research, development and
manufacturing of contact lenses and lens care products.
2.1.3 BUSINESS PROFILE
Novartis sustained momentum during 2008 from continuing operations. Net sales rise 9% to
USD 41.5 billion on accelerating growth in Pharmaceuticals along with important
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contributions from Vaccines and Diagnostics and Consumer Health. Operating income
advances 32% to USD 9.0 billion. Net income up 25% to USD 8.2 billion, impacted by a
higher 2008 tax rate and start of financing costs for 25% Alcon stake. Basic EPS rises 28% to
USD 3.59 from USD 2.81 in 2007. Dividend of CHF 2.00 per share proposed for 2008, a
25% increase from 2007 and representing a payout of 53% of net income from continuing
operations. Novartis expects record results again in 2009 in an increasingly challenging
environment.
Novartis is one of the leading pharmaceutical companies around the world. The main
competitors of Novartis are GlaxoSmithKline, Sanofi Aventis, Pfizer, Johnson & Johnson etc
Novartis had the 3rd
highest sales in the year 2008 with a sales of $ 36,172 million. Pfizer had
the highest sales with USD $43,363 million followed by GlaxoSmithKline withUSD $36,506
million. Sales.
Novartis‘s mission is to care and cure.They want to discover, develop and successfully
market innovative products to prevent and cure diseases, to ease suffering and to enhance the
quality of life.They also want to provide a shareholder return that reflects outstanding
performance and to adequately reward those who invest their money, their time and their
ideas in our company.
2.1.4 BUSINESS STRATEGY
A global leader in healthcare, Novartis is uniquely positioned to take advantage of the fast-
changing industry environment and to fulfill its mission of caring and curing. As we enter our
next growth phase, we are accelerating the execution of our strategy of leading through
science-based innovation to deliver positive health outcomes for patients and payers. Our
strategic priorities are to extend our lead in innovation, accelerate growth and drive
productivity across our diversified portfolio in order to generate profits and increase
shareholder return. Committed to high performance with integrity, we are engaged in an open
and cooperative dialogue with all of our stakeholders.
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Extending lead in innovation: Science-based innovation is at the heart of Novartis. We
follow a distinct research and clinical approach to build an industry-leading pipeline of
differentiated medicines and treatments with the goal of delivering real-world benefits to
patients and healthcare providers.
Accelerating growth: Novartis is pursuing long-term growth by maximizing product
launches and leveraging its robust portfolio. We are expanding in established and emerging
markets and adapting our commercial model to the rapidly changing healthcare environment.
Driving productivity: Novartis is driving productivity by simplifying its processes,
accelerating cross-divisional collaboration, and improving global procurement and supply
chain management. We are using rigorous resource allocation to improve cash management
and profitability.
Our four strategic enablers allow us to pursue high performance with integrity.
Commitment to people: We strive to attract and retain the best talent in the industry, nurture
team diversity and cultivate high engagement.
Quality beyond compliance: We are dedicated to producing high-quality pharmaceutical
and medical therapies that exceed industry standards to protect patient safety and build trust
with our stakeholders.
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Ethical business practices: Through global adherence to our Code of Conduct, we
consistently strive for the highest ethical standards around the world.
Corporate responsibility: We are committed to enhancing access to medicines and
healthcare services for underserved populations through innovative patient support programs
and Social Ventures.
2.1.5 MARKETING STRATEGY
Extending lead in innovation: Science-based innovation is at the heart of Novartis. We
follow a distinct research and clinical approach to build an industry-leading pipeline of
differentiated medicines and treatments with the goal of delivering real-world benefits to
patients and healthcare providers.
Accelerating growth: Novartis is pursuing long-term growth by maximizing product
launches and leveraging its robust portfolio. We are expanding in established and emerging
markets and adapting our commercial model to the rapidly changing healthcare environment.
Driving productivity: Novartis is driving productivity by simplifying its processes,
accelerating cross-divisional collaboration, and improving global procurement and supply
chain management. We are using rigorous resource allocation to improve cash management
and profitability.
Our four strategic enablers allow us to pursue high performance with integrity.
Commitment to people: We strive to attract and retain the best talent in the industry, nurture
team diversity and cultivate high engagement.
Quality beyond compliance: We are dedicated to producing high-quality pharmaceutical
and medical therapies that exceed industry standards to protect patient safety and build trust
with our stakeholders.
Ethical business practices: Through global adherence to our Code of Conduct, we
consistently strive for the highest ethical standards around the world.
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Corporate responsibility: We are committed to enhancing access to medicines and
healthcare services for underserved populations through innovative patient support programs
and Social Ventures.
Promoting our products gives us an ethical responsibility to provide accurate information
about our products to healthcare professionals, patients and consumers. These fundamental
principles guide our marketing practices and interactions with healthcare professionals and
customers:
Promotional practices must accurately reflect the benefits and risks of a medicine.
They must be ethical and be in good taste.
Any information we provide must consider the needs of customer. It must be based on
product information as approved by local authorities.
Sponsorships of medical or scientific events must be clearly disclosed, and the event‘s
purpose must be sharing relevant medical or scientific information.
Hospitality must be appropriate, modest, consistent with local practices and secondary
to the main purpose of any meeting.
Gifts may be given only when local standards permit it. Gifts must be inexpensive
compared to local standards, relevant to the practice of medicine and may only be
given infrequently.
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We prohibit any personal incentives to prescribe products.
Samples may only be provided to help healthcare professionals become familiar with
a product. This must adhere to all local requirements.
All interactions and activities must comply with applicable local laws and regulations.
Our global standards represent the company‘s minimum standards, and each Novartis
division has specific standards. For example, the Novartis Pharma Principles and Practices
for Professionals (NP4) governs how associates in our largest division conduct business and
interact with customers, including promoting medicines to healthcare professionals. All
Novartis divisions have similar policies, and the Novartis Group Audit team works to ensure
compliance.
2.1.6 PESTEL ANALYSIS
The following PEST analysis shows how political-legal, economic, socio-cultural and
technological forces affect Novartis in terms of business and development of the company
and what are some of the Novartis approaches to tackle these forces:
Political: With exhaustive need for new development of medicines to meet all the
medical requirements, Novartis requires political and legal support in order to venture into
this pharmaceutical and biomedical industry. Besides, Novartis being a MNC, it needs to
accordingly abide to the legislations of different countries. This would greatly influence the
development of Novartis when it‘s one of the emerging global healthcare leaders.There is a
factual article that claims that Novartis has achieved certain degree of stability in the political
involvement in most of the countries by being part of public affairs operations in Basel,
Switzerland; Brussels, Belgium; and Washington D.C., in the US under Novartis Global
Public Affairs department.
Economic: The global economic crisis would greatly impact the trust of the society
towards Novartis. The people believes that the above mentioned crisis might lead the
business and its entrepreneurs to be involved in misleading factors such as scandals,
bankruptcies and unethical practices.Nonetheless, Novartis had been engaged in Novartis
Foundation for Sustainable Development (NFSD) with associative alliances with ethicist,
economist and business people to show how they are tackling the current economic crisis.
With above said involvement, they are ensuring consumer needs, truthful business practices,
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use of natural resources without destroying the ecological balance are met ethically. On the
other hand, globalisation which is always been emphasized nowadays would influence
Novartis business unconstructively if there is no adaptation is made as advancements are
being declared.
Socio-Cultural: In those days, consumers were not aware of proper ethical guidelines
in order to get the right pharmaceutical products which only caused problems and resulting in
higher expenditures of resolution in the end. Though, nowadays consumers prioritize the
quality of the product in terms of overcoming the current health concerning issues with less
expenditures and proper prescriptions. This change in consumers perspective has also
manipulated as in enhanced the quality of products being developed by Novartis International
AG.In which Novartis had undertaken a lot of measures in order to ensure good medicines
are developed with high quality values and at the same time ensuring that they are affordable
to the society. They continue to venture into this journey by promoting their products
extensively.
Technological: As for Novartis which has an extensive involvement in research and
development, innovation in technology would affect the business and development to the
highest degree. Understanding this, Novartis has always been ensuring that the
instrumentations as well as pipelines of theirs are brought up to date from time to time with
the maximum efficiency to enhance the productivity of the company.
Environment: In order for a company to successfully enter the pharmaceutical
industry, Research and Development and also patent for their products is very vital. Due to
the scattered distribution of buyers throughout the world for Novartis, there isn‘t much
bargaining leverage for them. On the other hand, as the products of Novartis is all protected
by patents, there isn‘t much of a choice for the buyers to ponder upon which would not
influence the pricing of the products. There are numerous suppliers that have registered in the
portal of Novartis which aims to do business with Novartis. This actually initiates a sense of
competitiveness within them due to the very fact that Novartis can switch from their suppliers
without incurring a very high cost. Therefore, it is not easy for the supplier to drive up their
prices.
Legal: Novartis has also been actively deploying ethical and legal tools for their
research and development in pharmaceutical sectors with active involvements of people who
are members of certain trade union who contributes to achieve common goal together in
developing new medicines.
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2.1.7 SWOT ANALYSIS
SWOT stands for strengths, weaknesses, opportunities, and threats associated with a business
and it is an effective strategic analytical tool used to assess businesses. The following table
illustrates GlaxoSmithKline SWOT Analysis:
Strengths
Has a global reach in over 140 countries
Core businesses in pharmaceuticals, vaccines, consumer health, generics and animal
health
Novartis Biotechnology leadership camp organized by it is a unique step
Mergers and acquisitions have it a strong brand
First company-wide health and well-being initiative at Novartis
Employee strength of over 120,000.
Weaknesses
Controversies regarding their advertising of certain products affected brand image.
Case regarding Indian patent laws also created a problem for the brand
Opportunities
Broad-based medical innovation, in technologies and businesses across the spectrum
of health care
Venture into health needs in under-developed and poor countries
Leverage its core business expertise and resources to create sustainable solutions in
countries around the world.
Threats
Increasing obsolesce of technology.
Competition from peers
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2.1.8 CULTURE AND BEHAVIOR
At Novartis, our performance-oriented culture and responsible approach are the foundations
of our success. We recognize that our business depends on the creativity, dedication and
performance of our associates. We encourage associates to focus on achievement through
collaboration and innovation.
A global healthcare leader, Novartis has one of the most exciting product pipelines in the
industry today. A pipeline of innovative medicines brought to life by diverse, talented,
performance driven people. All of which makes us one of the most rewarding employers in
our field.
Novartis is committed to equality of opportunity, fairness, work and lifestyle, mutual respect
and dignity at work for all associates. Novartis values differences including disability, sexual
orientation, race, ethnicity, age, thinking styles, gender and religion.
Inclusion establishes and reinforces behavioral standards that foster a collaborative culture
and work environment, which will enable individuals and groups to contribute to their fullest
potential.
Diversity and Inclusion adds value for our company, our patients, our customers, our
associates, our shareholders, our suppliers and the communities in which we live and work.
2.1.9 COMMUNICATION
Novartis highly adheres to the concept of innovation within their business operations. Not
only is innovation specifically addressed in the mission statement13 in terms of the
discovery, development and successful marketing of innovative products, it is touted as “The
essence of our mission” (Novartis, 2012: 1). Furthermore, innovation is stated as the greatest
job satisfaction for Novartis employees in terms of working efficiently and innovatively in
order to improve the quality of life for patients (Novartis, 2013). In Novartis‘ 2012 annual
report, the term ‗innovation‘ is mentioned no less than 54 times, signifying a citation on
every 1 out of 5 pages. Furthermore, Novartis‘ official website commits a significant amount
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of information on the subject in terms of operations and values as a prioritized element of
their external communications.
While the various communication platforms, in theory, are deemed extremely beneficial in
the form of mechanisms to facilitate innovation communication, the functionality of these
vary to a great extent, thereby undermining the underlying intent. Moreover, the
configuration of these platforms serves to exclude certain levels of the organization, which
could be highly detrimental to future innovation generation as well as employee loyalty and
commitment. Furthermore, there seems to be a significant incongruity present in the sense
that innovation communication platforms are provided, yet discouraged by Novartis leaders.
One of the most promising initiatives in terms of innovation communication is the LEAD
program, which grants a communication bypass from lower levels of the organization directly
to ENC members. However, this program is laden with difficulties as a result of poor
communication skills, lacking self-awareness of self-efficacy, and questionable innovative
content on the part of participants, which severely affects the innovative outcomes and
underlying intent of the program.
Internal-Operational Communication: Novartis has an internal communication
system which holds the employee communicates each other on the platform of GSK.
There are so many platforms to communicate like as:
CEO engages a plat form from all over the world of 250 top people from different
sections of the company to help the strategic change in different sectors of the
company.
A CEO advisory board which helps the CEO from their ideas from across the world is
also established.
The online version of magazine is published on the 100% recycled paper.
An online access on Novartis TV to download the views and progress inside the
company.
Novartis has also an internal business communication system via intranet through that
the messages, meeting across worldwide be conducted.
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External-Operational Communication: The exponential increase in
communication platforms and medias in the marketplace today has provided private and
public businesses the opportunity to not only communicate directlyto their stakeholders, but
also receive feedback from these stakeholders instantaneously.
Regardless of what social media platform is accessed, Novartis has a presence, including
Facebook, Instagram, Twitter, Pinterest, and LinkedIn. In order to add a two-way,
symmetrical communications function to Novartis‘ external communications, these various
social media platforms are used, where external audiences are able to comment and provide
feedback directly. The degree to which this interactivity is feasible depends entirely on users
propensity to seek out the company online and connect with them.
This indicates that despite Novartis‘ significant efforts to reach external audiences through
contemporary medias, the actual audience is quite inconsequential relative to Novartis‘
geographical reach, size, and amount of patients using their products. This unproportionate
ratio may be affected by the nature of these medias, namely that users select and control the
information they deem relevant and interesting, thus representing the dominant party in the
external communications relationship. Such a dynamic is considered relatively new. In more
traditional medias, such as TV, newspapers, etc., the sender determines the content,
placement, and timing of the messages and as such, the audience relinquishes control of the
messages and information that they are exposed to.
2.2 AN OVERVIEW NOVARTIS BANGLADESH LTD.
In 1973 the Ciba Geigy (Bangladesh) was registered as a joint stock company (Novartis
Bangladesh website). It then launched researched pharmaceutical products in the Bangladeshi
market. In 1986 Ciba Geigy introduced its first generic product in the Bangladeshi market,
Servipham. The company began to export its products from Bangladesh in 1995. In 1997,
Ciba Geigy and Sandoz merged to form Novartis (Bangladesh) Limited and introduced its
first OTC product. In 2000, Novartis (Bangladesh) Limited became the first pharmaceutical
company in Bangladesh to be awarded the EU GMP certification.
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Novartis Bangladesh awarded the National Export Trophy for the years 2002-2003 and 2003-
2004 from Bangladesh government‘s Export Promotion Bureau (Novartis Bangladesh
website). Novartis Bangladesh is one of the top pharmaceutical exporters of Bangladesh that
exported US$15 million medicines in 2007, which is 44 percent of the total pharmaceutical
exports from Bangladesh (Daily Star report, 2008). Though its export value is quite
impressive, Its generic division Sandoz‘s performance in Bangladesh‘s local market is not as
good as Novartis‘s patented products. Sandoz positioned 15 in top 20 pharmaceutical
companies in Bangladesh.
2.2.1 BANGLADESH’S PHARMACEUTICAL MARKET
According to the UKTI (April, 2010) the total size of the pharmaceutical market of
Bangladesh was estimated to be US$700 million in 2007. It also reports that the industry
produced medication worth $715 million in 2007 with the market growing over 12% annually
over the last half a decade and firms primarily focus primary on branded generic final
formulations by using mostly imported APIs. According to the World Bank report (2008)
about 80% of the drugs sold in Bangladesh are generics and 20% are patented drugs. It also
reports that domestically Bangladeshi firms generate 82% of the market in pharmaceuticals
and locally based multinational companies account for 13%, and the final 5% is imported.
There are 240 registered pharmaceutical companies in Bangladesh where 164 of these
actively involved in the manufacture or marketing of pharmaceutical products (Hussain et al.,
2008).
The top 30 to 40 companies dominate almost the entire market, where the top 10 hold 70% of
domestic market share and the two companies Beximco and Square capture over 25% of the
market (World Bank report, 2008). The pharmaceutical market of Bangladesh is dominated
by a few large companies. This kind of market structure is defined as oligopoly (Gillespe,
2010, p. 302; Griffiths & Wall, 2008, p. 226; Salvatore, 2007, p. 340; Besanko et al, 2010, p.
221). The decisions of one company influence, and are influenced by, the decisions of other
companies. For example, when the pharmaceutical market leader Square got the UK MHRA
approval, the second largest company Beximco immediately started the process desperately
to secure it (UKTI, 2010).
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2.2.2 BUSINESS PROFILE
Novartis is the only company with leading positions in each of these key areas:
Pharmaceuticals: innovative patent-protected medicines
Alcon: global leader in eye care with surgical, ophthalmology and consumer products
Sandoz: affordable, high-quality generic medicines and biosimilars
Consumer Health: self-medication products and treatments for animals
Vaccines and Diagnostics: vaccines and diagnostic tools to protect against life-
threatening diseases
Novartis manufactures such drugs as clozapine (Clozaril), diclofenac (Voltaren),
carbamazepine (Tegretol), valsartan (Diovan) and imatinib mesylate (Gleevec/Glivec).
Additional agents include cyclosporin (Neoral/Sandimmun), letrozole (Femara),
methylphenidate (Ritalin), terbinafine (Lamisil), and others.
Since Novartis was created in 1996 – when only 45% of net sales came from healthcare – the
company has shifted focus to fast-growing areas of healthcare. Their strategy is to provide
healthcare solutions that address the evolving needs of patients and societies worldwide.
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2.2.3 BUSINESS STRATEGY
a. Functional level strategies: Novartis Bangladesh Ltd follows different functional level
strategies to gain competitive advantages and sustain it in the long run in the matured
industries. They increase their efficiency through exploiting economies of scale and learning
effects.
b. Business-Level Strategies: Novartis strategic managers adopt different business level
strategies to use the company‘s resources and distinctive competencies to gain competitive
advantage over its rivals. These are:
They follow cost-leadership strategy as they have intermittent over capacity and the
ability to gain economies of scale. This way they can produce cost effective products
and yet be profitable.
They also target different market segments with different products to have broad
product line. By product proliferation they reduce the threat of entry and expand the
range of products they make to fill a wide variety of niches.
c. Strategy in the Global Environment: Novartis Bangladesh Ltd. is registered under
GlaxoSmithKline plc. As a part of a global company it follows some generalized strategies
and principals of GlaxoSmithKline. However, they also modify different strategies based on
the national conditions. The different strategies that they follow in the global environment are
stated below:
They import the raw materials from the places where it is less costly, thus achieve
location economy.
GSK follows a multi domestic strategy where the companies extensively customize
both their product offering and marketing strategy to different national conditions.
d. Corporate strategy: Novartis carries out the following corporate level strategies:
They have a diversified business. Novartis has reflected the changing market
dynamics there and to prepare for the launch of multiple new products. Novartis are
restructuring to improve efficiency and focus resources to growth opportunities in
what continues to be a challenging market environment.
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Novartis have changed the traditional R&D so that it is better able to sustain a
pipeline of products that offer valuable improvements in treatment for patients and
healthcare providers.
As business continues to change shape, Novartis is transforming so that it can reduce
complexity and become more efficient.
2.2.4 MARKETING STRATEGY
Two main elements empower the Novartis business strategy:
Global reach and reputation: In addition to its unique position within Novartis,
Sandoz benefits from a strong global presence and powerful brand recognition
worldwide.
Unique expertise: Sandoz distinguishes itself primarily through its ability to develop,
produce and commercialize differentiated medicines. Sandoz is the pioneer and
global leader of biosimilars — follow-on versions of biopharmaceuticals following
patent expiry — with the first three approved and marketed products in the EU
(human growth hormone Omnitrope, anemia medicine Binocrit, and oncology
medicine Zarzio).
Marketing is the process by which companies create value for customers and build strong
customer relationships in order to capture value from customer inreturn (Kotler, 2005).
Marketing is the backbone of all industries. Though pharmaceuticals produce life saving
drugs, they also need marketing. But their marketing is to some extent different from other
industries. Some major characteristics of marketing sector are given below:
Their distributional channel includes invoice system, own distribution channel.
Medical representatives are the key persons in marketing.
For promotion, the groups such as doctors, surgeons are targeted.
Major promotional strategies include printed promotional materials, physical sample,
and clinical materials.
Special incentives are given to the doctors. For example, the doctors are given honeymoon
packages, the cost of which is borne by the pharmaceuticals. The field level executives are
playing the imperative role for marketing division. Basically, they have taken the
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responsibility to market the products of their companies. So, the success of a pharmaceutical
industry intensively depends on the efficiency and effectiveness of the medical
representatives. If an organization wants efficient employees in this section, he should to
satisfy these representative. The researcher conducted a small survey over the field level
executives, who are playing the prime role for marketing of the products of pharmaceutical
companies. Here, the study finds that, only 32% employees are in satisfactory and extremely
satisfactory level. So, how it is possible to expect, the executives will devote maximum effort
for marketing their products. Most of the interviewees think that the sector should increase
the benefits to the marketing executives with relevant effort.
2.2.5 PESTEL ANALYSIS
PESTEL analysis provides a framework to examine the external environment of a company
(Gillespie, 2010, p. 13; Morrison, 2006, p. 30). PESTEL stands for political, economic,
social, technological, environmental and legal factors. PESTEL analysis helps a company to
categorize the relevant issues in its environment, so that it can assess its relative importance
and develop an appropriate strategy (Sloman & Hinde, 2007). The following sections
provides an overview of the currently affecting the Novartis in Bangladesh.
Political factors: Experienced international businesses engage in political risk
assessment, a systematic analysis of the political risks they face in foreign countries and any
changes in the political environment that may adversely affect the value of a company‘s
business activities. Politically Bangladesh is now a stable country after decades of instability
and coups.
Support of Government: Bangladesh government regards the pharmaceutical industry as
one of the key sector for foreign investment in the country (BOI, 2010a). With strong
government support Bangladesh is developing a robust manufacturing and technically
experienced industrial base for this sector. Bangladesh was placed 15th
globally for the
protection which it affords investors in the World Bank‘s (2009) ―Doing Business‖ survey.
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Issues: General strikes by opposite political parties those caused huge loss to the businesses
and industries were a regular part of political life in Bangladesh. The situation has improved a
lot in past few years despite of very few occasions (BBC, June 2010). Companies are still
facing some corruption and bureaucracy issues when to do business in Bangladesh. For
example, according to the World Bank report (2009) it requires 7 procedures and takes 44
days to start a business there. Despite some bureaucratic problems in overall the current
political environment of Bangladesh is business-friendly for Novartis.
Economic factors: When a company wants to do business in another country, it
should have good knowledge on growth rate, inflation, unemployment, wages, income,
stability, poverty and the like of that country.
GDP Growth: The economy of Bangladesh has grown 5-6% per year since 1996 despite
many internal problems like political instability, poor infrastructure, corruption, and
insufficient power supplies and its growth was resilient during the 2008-09 global financial
crisis and recession.
Inflation: Inflation rate is a measure of the increase in the cost of living that influence on
many parts of the economic confidence, and the stability.
Unemployment:Daniels et al (2009) argues that unemployment depress economic growth,
create social pressures, and provoke political uncertainly. The unemployment rate in
Bangladesh was 2.5 percent.
Debt: The larger the total debt becomes, the more uncertain a country‘s economy becomes.
The internal public debt that was measured by the percentage of Bangladesh‘s GDP was
lower than in India, Pakistan or UK in 2009.
Labour Force and Cost: For the pharmaceutical industry, the cost of labour is one of the
key elements of total production costs. Companies always search the world for the best deal
with the difference between low-cost and high-cost countries.
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Socio-cultural factors: A company should identify key cultural differences in the
country where it is doing or intended to do business and then it must need to alter its
customary practices to succeed there.
Religion: According to the World Factbook (2010), 89.5% of the population in Bangladesh is
Muslim. The religious belief and practices have influence and impact on
national/international business that is seen in a culture‘s values and attributes toward
entrepreneurship, consumption and social organisation. Many Muslim workers require extra
time break for daily prayer. Muslims are forbidden from the consumption of pork and
alcohol. The pharmaceutical companies need to consider these religious factors to do the
business in Bangladesh.
Technological factors: Technological environment is another important dimension of
a country and the foundation of its resource base. Three key technological factors are
discussed in following sections.
Research and Development: Foreign direct investment has brought about the globalization
of production, but this has not led to the globalization of technological innovation in
Bangladesh. Large companies have tendency to concentrate their R&D activities in their
home countries, but progressively specialized R&D is being decentralized to overseas
locations, to benefit from different areas of excellence in different localities.
Environmental factors: Couple of key environmental factors discussed in following
sections those significant for Novartis operation in Bangladesh.
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Climate Change: Bangladesh is now widely recognized to be one of the countries which are
most vulnerable to climate change as a result of global warming. It is a low-lying region that
risks submerging some of its parts beneath the sea. Natural hazards that come from increased
rainfall, rising sea levels, and tropical cyclones are expected to increase as climate change,
each seriously affecting agriculture, water & food security, human health and shelter.
Legal factors: Every company in every country must comply with local legal system
and regulations regarding operations. The legal environment has a great impact on doing
business in any country. According to the World Bank reports Bangladesh is ranked 119 out
of 183 economies on ease of doing business whereas India ranked 133 .
2.2.6 SWOT ANALYSIS
Strengths:
1.Has a global reach in over 140 countries
2. Core businesses in pharmaceuticals, vaccines, consumer health, generics and animal
health.
3. Novartis Biotechnology leadership camp organized by it is a unique step
4. Mergers and acquisitions have it a strong brand
5. First company- wide health and well-being initiative at Novartis
Weaknesses:
1. Controversies regarding their advertising of certain products affected brand image
2. Case regarding Indian patent laws also created a problem for thebrand
Opportunities:
1. Broad-based medical innovation, in technologies and businesses across the spectrum of
health care.
2. Venture into health needs in under-developed and poor countries
4. Leverage its core business expertise and resources to create sustainable solutions in
countries around the world.
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Threats:
1. Increasing obsolesce of technology
2. Competition from peers
2.2.7 CULTURE AND BEHAVIOR
Bangladesh, as well as the US and UK, is a masculine culture, so it fits Hofstede‘s profile
when it comes to behavior and promotion of respect in the workplace, as it is a feminine trait
to be tender and nurturing, not a masculine one. As for Hall‘s insider/outsider-dimension, low
context cultures do not distinguish closely between insiders and outsiders, and therefore
people of all backgrounds and levels have the possibility of being respected in the same way.
According to Greet Hofstede, Bangladesh scores high on power distance, it‘s about 80, which
means that people accept a hierarchical order in which everybody has a place and which
needs no further justification. Hierarchy in an organization is seen as reflecting inherent
inequalities, centralization is popular, subordinates expect to be told what to do and the ideal
boss is a benevolent autocrat.
In case of individualism, Bangladesh scores about 20 which are considered a collectivistic
society.
Bangladesh scores 55 on masculinity and can be considered a masculine society. In
masculine countries people “live in order to work”, managers are expected to be influential
and assertive, the emphasis is on equity, competition and performance and conflicts are
resolved by fighting them out.
Bangladesh scores 60 on uncertainty avoidance and thus has a high preference for avoiding
uncertainty.
In long term orientation, Bangladesh scores 40, in this dimension which reflects it a short
term orientation culture.
Societies with a short-term orientation generally show great respect for traditions, a relatively
small propensity to save, strong social pressure to “keep up with the Joneses”, impatience
for achieving quick results, and a strong concern with establishing the Truth.
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In Bangladesh, Novartis has adopted a four step approach towards the initiation of cultural
change. This change process has been slightly modified from the force field analysis
proposed by (Lewin 1951) to fit the change situation of Novartis. The steps that were
undertaken by the company can be summarized in the form of following diagram:
These four steps cover the following four points:
1. Make sure that the R&D department and people understand the pressure of change
– why do we need to change?
2. Develop and share a clear vision about where the organization and department is
headed – where are we going?
3. Put in place the individual, departmental and organizational capabilities for change
– what do we need to make the change?
4. Have a plan of action that outlines what has to be done to get it all started – what do
we have to do tomorrow when we come to work?
One of the main reason for the successful adaptation in Bangladesh of Novartis because
Novartis BD believes in recruitment from the Bangladesh. A large number of employee has
been recruited from the local market. More over Novartis BD has a huge participation in
different national social work.
The communication styles of Bangladeshi people are indirect or implicit. They usually take
longtime to know each other; they love to use rich and contextualized words. If someone take
short time or direct approach in introduction, they considered as rude. Personal space is not a
huge factor in Bangladeshi culture, they tend to stand or close (2-3 feet) when taking. Touch
of same gender is common in Bangladesh usually in female. All of the friends and family
members take along conversation period in meeting each other or taking via network; this
approach happened because Bangladeshi believes in collectivism approach.
2.2.8 COMMUNICATION
Communication is a very important thing for a company like Novartis BD. The headquarter
of the company situated in Dhanmondi, Dhaka whereas all the other eleven Distribution
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Centers Nationwide situated throughout the Country. So to communicate with each other they
need some advance technology and easy communication process.
Internal-Operational Communication: Internal-Operational Communication are
those which is used in conducting work within a business. That is the communication among
the business employee‘s that is done to create, implement and track the success of the
business‘s operating plan. Now-a-days technology plays a very important role in internal-
operational communication.
There are so many platforms to communicate like as:
Board of Directors holds periodic meetings to resolve issue of policies and strategies,
recording minutes/decisions for implementation by the Executive Management.
The Managing Director heads the Executive Management, the Chief Executive
Officer (CEO) who has been delegated necessary and adequate authority by the Board
of Directors. The Executive Management operates through further delegations of
authority at every echelon of the line management.
There are five major departments and each departments and each departments of
Novartis BD operates in different aspects but they are interrelated as well as
complement to each other.
HR department of Novartis BD administrate smooth workflow in the organization and
manages the demands of the labors in the factory.
Because of the advancement of the technology now-a-days any kind of
communication can be made through land phone or cellular phone.
For any kind of brief information employees can use electronic mail or even fax.
Employees can use their own web portal for many important things.
Novartis BD encourage open network communication usually. In this communication
network employees can frequently communicate their views and perception without so much
formal network.
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External-Operational Communication: External-operational communication is
work-related communication with people outside the business such as personal selling,
telephoning, advertising and writing message. For meeting up with the necessary information
to the market Novartis BD has medical promotion officer. Their main duties are as follows :
Meet and approach customers actively and energetically.
Get the job done with professional standard.
Seek, share and adopt successful practices in the team.
Meet commitment and deliver results on time and travel extensively.
Novartis BD as a buyer of the raw materials, manufactured goods and services around the
world has a better relationship according to the human rights commission. Novartis BD aims
to have a good relationship with the local communities. Novartis BD wants to minimize the
influence on the local communities and aim to prosperity of the area.
On the other hand the informal network, consisting largely of personal communications, is
highly complex and ever changing.
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CHAPTER 03 – EVALUATION & CONCLUSION
3.1 EVALUATION
A few strengths of Novartis (Bangladesh) Limited has been given below-
High Quality products: Novartis provides high quality products. And the quality of
medicine that we get here from Novartis is identical with any other countries all over
the world. So Novartis ensures quality product.
Innovative and unique product lines: As it has been said earlier that Novartis
Pharma is specialized in patent products, so the products invented here is innovative
and unique. And most of these products cannot be found by manufactured from other
companies.
Highly skilled management: As I have worked with the management and other
employees of Novartis for three months, it can be ensured by me that Novartis is well
known for recruiting highly skilled management, whom are responsible for the
success of this company.
Quality raw materials imported from foreign sources: Most of the raw materials
that are used for making medicines are imported from abroad. That‘s why the quality
of the raw materials are ensured.
High quality customer service: Novartis has a separate division of customer care
service. This team always updates the current conditions of the customers and tries to
provide them maximum service based on their medicines.
Sole manufacturing plant with GMP standard & European Certification:
As it has been said earlier that, Novartis has a plant in tongi. And this plant has been built
under the observation of experts to ensure that it falls under the GMP standard and European
certification.
Other than these characteristics, Novartis is also-
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Leading pharmaceutical exporter of the country
Effective marketing strategies
It is a large multinational company globally
A proven track record in defect-free manufacture
Highly Efficient employees
Effective State-of-the-art plant and equipments.
Available Cash on hand
Global Company reputation
A positive work climate and organization culture
Novartis is the number 1 ethical pharmaceutical company worldwide.
Novartis is in 4th position among all the industries globally.
Serving additional customer group in the existing geographical market.
Expanding into new geographic markets.
Scope to improve in export oriented products.
Expanding the company‘s product line to meet a broader range of customer needs
Transferring sector‘s skill or technological know-how to a new business or a new
product.
Scope to communicate the global reputation of Novartis
Although being a multinational company, Novartis has some drawbacks such as-
Very expensive Raw Materials: Most of the raw materials Novartis uses to produce
medicine are imported from abroad. And due to that the cost to purchase raw material gets
very high, and ultimately the impact falls on the price of the product.
High price of products: As the cost of raw material is high, naturally the products
price also gets higher. And due to higher price, consumers do not want to the medicines of
Novartis.
Lack of proper awareness in the market: Awareness is a significant issue for any
product to run well in the market. There is no doubt that the products of Novartis are quality
full, but still Square and Beximco has a significant place on the mind of the customers. For
this reason people find the products of Square and Beximco familiar rather than Novartis.
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Narrow product lines than the competitors: Another problem of Novartis is, its
product line is narrow than other companies. As it has been said earlier that, in Pharma
division only patent products are made, which‘s price is higher, and at the same time variety
is less. So other company gets the advantage.
Lack of manpower: For any company, workers are the ultimate source of power.
And in this field also, other companies have the advantage. Basically, the term manpower
refers to the field forces who works with the product and directly keeps contact with the
customers and doctors. The number of field force in Novartis is less than other companies, so
it faces number of problems.
Strong local competition: It has been said earlier that the local competition is very
strong in market. And whenever the market is tight, all the companies has to work very
carefully so that no loopholes are left over.
3.2 Conclusion
In this report Novartis current operations in Bangladesh are analyzed. PESTEL analysis used
to examine few significant factors of external environment and discussed how they influence
the Novartis. At the end of the report couple of recommendations is provided for Novartis‘s
current and future strategies and operations in Bangladesh.
The findings that I have analyzed on weakness part were basically high price of raw
materials, high price of products, comparatively weak marketing channel etc. If Novartis
(Bangladesh) Limited can overcome these issues, future prospects will be higher.
In conclusion it can be said that, definitely Novartis (Bangladesh) Limited is one of the best
pharmaceuticals all over the world, just a blend of reasonable price and quality product will
take it to the extremes.
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REFERENCES
BOI (2010a) Market Overview, (Board of Investment Bangladesh),
http://www.boi.gov.bd/key-sectors/life-sciences/market-overview (Accessed: 12 July 2010)
BOI (2010b) Key Benefits and Advantages, (Board of Investment Bangladesh),
http://www.boi.gov.bd/key-sectors/life-sciences/key-benefits-a-advantages (Accessed: 12
July 2010)
Czinkota, M., Ronkainen, I., Moffett, M., Marinova, S. & Marinov, M. (2009) International
Business, European Edition. John Wiley & Sons, Ltd.
Daniels, J. D., Radebaugh, L. H. & Sullivan, D. P. (2009) International Business:
Environments and Operation, 12th ed. Pearson Prentice Hall.
http://www.novartis.com/
http://www.novartis.com/careers/
http://en.wikipedia.org/wiki/Novartis
http://www.nibr.com/
http://www.novartisvaccines.com/
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APPENDICES
Appendix A
Pharmacy - Pharmacy is the science and technique of preparing as well as dispensing drugs
and medicines. It is a health profession that links health sciences with chemical sciences and
aims to ensure the safe and effective use of pharmaceutical drugs.
Appendix B
Communication - Communication (from Latin commūnicāre, meaning "to share" [1]
) is the
activity of conveying information through the exchange of ideas, feelings, intentions,
attitudes, expectations, perceptions or commands, as by speech, gestures, writings, behavior
and possibly by other means such as electromagnetic, chemical or physical phenomena. It is
the meaningful exchange of information between two or more participants (machines,
organisms or their parts).