Therascience Company - Analysis of Business and Macro-Environment - Example

ANALYSIS OF THERASCIENCE COMPANY – CASE STUDY OF MONACO Acknowledgement Conducting an academic research on this particular topic is one of the most inspirational experiences in my life. It has enlarged my analytical and research skill to the paramount. It taught me how to face challenge and overcome them successfully. However, it might not have been possible for me without having kind and valuable support from my professors. Thus, I would like to thank my supervisor __________ for giving constant support and assistance throughout the research process. Executive Summery The current study deals with analyzing the business process of Therascience, which is a well-reputed pharmaceutical company in Monaco. An extensive research has been conducted here to examine current business strategy of the company. It reflects both positive and negative aspect of its current brand position and status of competitive advantage of Therascience by applying marketing tools like SWOT analysis, PESTLE analysis and Porter’s five forces analysis. The effectiveness of these policies has been proven a provider of sufficient information that can form a basis in providing relevant suggestive measures. This particular research not only reflects positive points, but also reflects weak areas where further improvements are required. Some suggestions regarding change in the current market strategy to gain high competitive advantage are also given in this study. TABLE OF CONTENTS TABLE OF CONTENTS 4 1. Introduction: 5 1.1 Overview 5 1.2 Description of Therascience Company 6 2. Description and analysis of the business 6 2.1 Description and analysis of the macro-environment 6 2.2 Description of the business 9 Conclusion: 14 Appendices 15 Works cited 19 1. Introduction: 1.1 Overview Pharmaceutical companies in any region, spend huge amount of money in research and development of new class of drugs and drugs products. In Monaco, pharmaceutical companies were first founded in the year 2001, with the begging of R & D PHARMA. The marketing strategy followed by these companies seeks to gain maximum payoff by focusing on development of their own possible patented medicines. Support of government regulation has causes marketing environment of Monaco as a sales targeted market for all pharmaceutical companies throughout the globe. It clearly explains the willingness of the pharmaceutical companies to ensure long-term persistence through the process of development, testing, approval, marketing and distribution. In the current research, the researcher has given special focus on conducting a market research on pharmaceutical companies located at Monaco with special reference to Therascience. Therascience was founded in the year 1998 and product range of the company generally focuses on production of pharmaceutical products including vitamins, minerals and diet products. The conducted research has discussed the marketing strategy adopted by the company and its comparison with other pharmaceutical company located in Monaco. The study looks into a brief description of the macro environment and shows how the ever-changing and competitive marketing strategy helps the company to adopt different marketing strategy to get advantage over its other market competitor. Due to adopting diverse strategy in its business operation, Therascience has a competitive advantage over its rival in pharmaceutical industries in Monaco. 1.2 Description of Therascience Company Therascience mainly focuses on research, development, manufacturing and distribution of the pain management, addiction treatment pharmaceuticals and dietary products (The laboratory Therascience). Initially the company started with two doctors and nutritionists and quickly developed themselves as a leading medical education and nutritionist in the nutrition market. At initial stage, the company has started its activity by conducting several projects in the areas of medical device, herbal medicine and food supplement. Now, Therascience has expanded its operation in some other areas also. Major product line of the company includes production of vitamins, minerals and diet products. With a long-term vision, it has started to accelerate its development by investing on specialized healthcare services. The company mainly distributes its products through doctors and pharmacy stores located in Monaco. Objective of Therascience is to offer at least one new product to its customer per year in finance. Apart from expanding its business in domestic market, the company also seeks to expand its business to the international market by maintaining high potential growth. The HR policy followed by the company is quite accessible as Therascience offers every stakeholder of the company to take responsibility of their diverse projects (“Human Resource”). 2. Description and analysis of the business 2.1 Description and analysis of the macro-environment A business organization has to deal with several things outside to the business environment. All these factors affect the way in which a business is going on. These factors are divided into two parts namely; micro and macro environment (Hall and Rosenberg 43-56) Macro environment consists of all those factors that are beyond the firm’s control. In order to understand macro environmental factors that affects business environment of Therascience, PESTLE analysis can be used. As the company is located in Monaco, PESTLE analysis of Monaco has been utilized to understand influence of political and socio economic environment on business of Therascience. Political – The political system in Monaco is known as constitutional monarchy and hereditary. Monaco became a member of the United Nation in year 1993 and since then the France Government is handling the security, protection and administrative service of Monaco. Political factors affect the change in business environment of Therascience. Minister of the state is responsible for taking all administrators, sensitive and political decisions (Farrell 24-34). Political influence allows the company to produce competitive product and maintain shares of sale in both domestic and global market. Economic – Euro is the currency of Monaco. The country does not change any income tax on its resident and thereby, cost of living is very low. As per the UN data, gross domestic product (GDP) of the company was $1.311 billion. The unemployment rate within the country is almost 0%. Custom and economic union governs different sector industries in Monaco, such as pharmaceutical, nutrias industry etc. with the France. The effects of global economic crisis still exist within the economy, but it shows that, average spending on the healthcare services is continuously growing. Further, reduction in the consumer’s disposable income has an impact on the health related models particularly in the segment, where payments are required. Apart from that, increased pressure from the stakeholder’s side has caused a consolidate effects on the pharmaceutical industry in Monaco. Recently, Euro per Dollar is decreasing which is a good sign for Therascience developing its business. Social – Human rights in Monaco are very much respected. The increasing population in Monaco has given the opportunities to Therascience to capitalize its range of products. Gradually people in Monaco being aware and informed about their healthcare and their expectations to the nutritious product are becoming more demanding. Public activism is also increasing through development of new social networking technologies (Chichester and Lal 10-16). Thus, pharmaceutical companies like Therascience are getting a closer look of its customers overstepping the regulatory boundaries. Technology – According to the data in 2008, around 22,000 people in Monaco are using internet service. Apart from that, Monaco is also connected with different parts throughout the globe via satellite and French communication system. Technological advancement has developed business prospects of Therascience in terms of both service provision and new therapy system. Various online opportunities that provide growth in the development of Therascience are customize treatment, social media for health care, direct patient (from various zones) communications etc. Legal – Legal forces that provide influence on the business environment of Therascience include consumer law, discrimination law, employment law, health and safety law etc (Anderson and Vincze 45-56). These forces influence operating process of the firm, cost strategy and demand for its products. France government does not provide any legal restrictions on the outside purchaser and thereby, customers located in the international market are encouraged to purchase Therascience’s products. Environmental – Monaco is a very beautiful country and is a famous tourist spot. The nation has maintained a powerful control on the level of emission in the water and air safely for their own people (Kotler, Keller and Brady 67-87). The growing environmental agenda and stakeholder team at Therascience are becoming more aware regarding the need for their business. However, the company needs to gives more focus on linking their marketing plans with the environmental issue. New product development strategy and marketing plans must identify eco opportunities in promoting their products. 2.2 Description of the business Structure of the company – The organizational structure is a very important factor in describing a business and is concerned with understanding internal business activities to achieve business goal. Like other companies, internal organizational structure of Therascience is supported by its work structure, management and corporate organizational structure that significantly determines its staff’s attitude. By concerning the present activities, the internal structure of Therascience is divided into five segments, namely, administrative, marketing, distribution, HR and finance department (Thomas and Rego 34-45). Each of the department is provided with different activities and responsibilities. The administrative staffs are responsible to handle a wide range of daily tasks. The marketing department ensures marketing of the products should be done more carefully to reach the targeted market. Finance department ensure fruitful transaction of the goods and HR department work for its internal people. Further, in order to achieve better performance and efficiency, Therascience also divided its employee into different departments. Management style – The management style followed by Therascience is characterized by lean management style. Over the last few decades, lean management style has becomes major driver for bringing change, improving operational process and eliminate waste (Morris 14-24). The specific culture of the company is very effective to motivate its people, teaching them development tools and thereby improve manufacturing and business process. (Bose 23-26) opined that, lean management style is very simple and inexpensive tool to ensure determination and commitment of the employees towards work. In order to simplify business operation and reduce cost, Therascience has willingly adopted lean methodology. The main aim of adopting this kind of management style is to offer good, effective and safe medical products to the patient and control its manufacturing environment. Therascience has successfully maintained high quality service with lower quality cost by applying lean management principle. Cultural in Therascience – Business culture in Monaco is very similar to the business culture followed by France business (McDonald and Peter 34-46). There are several facts of the Therascience’s organizational culture and these includes having committed and empowered employees, having a strong mission clarity, strong relationships with the external and internal stakeholder (also among staffs and leaders) and high commitment to the learning and development team. If one of these elements is affected, it influences the whole ideology of the company’s culture, especially from an employee’s point of view. In managing sense of security in the workplace of Therascience, the management team plays an important role. Adoption of lean management style helps the company to realign its pathway of the authority so that leader and management team can successfully contribute skills and abilities within its team members. Further, this kind of leadership supports in maintaining sophisticated practice within the organization. Business Strategy of Therascience – According to (Michale 90-100), marketing strategy integrates actions and decisions taken by an organization to meet needs and requirements of the customers in achieving the marketing goals. The marketing strategy adopted by Therascience mostly develops with having a long-term outlook in both national and global environment. The marketing strategy followed by Therascience has been established by integrating strategic marketing rules together in order to catch changing behavior of the customers. Therascience uses a unique combination of both external and internal marketing strategy. In order to connect its external customers, the company uses digital media using with internet marketing plan. This provides a multi channel opportunity to the company to recognize its targeted audience. The concentration segments of the customers are very high for the pharmaceutical products supplied by the company. SWOT analysis of Therascience – SWOT analysis access and identifies strength, weakness, opportunities and threats that an organization might face in its business environment. By conducting a SWOT analysis of the Therascience pharmaceutical company, one can presume improvement needs and growth, which is possible by taking care of company’s value. Strength – The strengths of the Therascience Company include those components that provide value, quality good and overall excellence. Brand position of the company injects so many strong positive features that influence many doctors and patients to accept Therascience’s products. Other strengths of the company includes, state of the art at laboratory equipment, low staff turnover, experience research staff etc. Weakness – Weaknesses of a company comprise those factors that are not much significant to add value for the company’s improvement. High-risk business modeling, low staff morale and diseconomies of scale, dated medical equipment etc. are the major weaknesses of Therascience. Opportunity – Opportunity contain external industry factor that provide chance for the future growth. These external business factors include components or aspects outside the industry that can effectively reflect the business market place (The Economic Times). Therascience needs to give more focus on their product development strategy to increase health conscious consumers. Further, they can add different flavor and good taste in their product and make product economically easy to buy. Threats – Threats contain those external factors that might create an opportunity for an industry to decline in future. Threats for the Therascience Company includes huge market competition in pharmaceutical industry, a declining economy, increased government regulation and decrease in global population. By conducting a SWOT analysis over the current position of Therascience, it can be infer that, in spite of having a strong brand image, fierce market competition in the pharmaceutical industry is the potential threat for the company. High level of innovation and nutritious product development and found to be more effective in adding competitive advantage to the company. Porter’s five forces analysis of Therascience Porter’s five analysis of Therascience are depicted as follows Incumbent Rivalry: The consumers of pharmaceutical products are already flooded with huge number of choices due to existence of large number of pharmacy brand in Monaco. However, the influences of brand power of Therascience on the consumer are very high and thereby, people prefer to have Therascience’s products. Bargaining power of the supplier The existence of Therascience depends on several organic chemicals. There are large number of suppliers who supply chemicals and other raw materials to pharmaceutical industry and thereby, suppliers enjoy very low bargaining power. Therascience can easily switch from one supplier to another without incurring a very high cost. Bargaining power of the buyers For pharmaceutical product, end user of the product (patient) is different from the influencer (doctor). As the consumer has to buy what doctors recommend, they have no choice but to obey the doctor’s advice. Thus, they do not enjoy much power to influence price of the Therascience’s products. Threats of new entrance Initial capital requirement for a pharmacy company is very low and creation of regional distribution network is very easy. Thus, creation of brand awareness among the doctors and patients is a key to long-term survival (Starr and Rosenberg 67-90). However, sometime government put hindrance for establishing a new manufacturing operation. Threats of substitute products Lack of existence of a substitute product is one of the greatest advantages of pharmacy industry. Demand for pharmacy product is an ongoing concern. This is the key reason for gaining high competitiveness of Therascience in pharmaceutical industry. Porter’s five analyses have been considered here to examine competitive advantage position of the company. Therascience has achieved a strong competitive position in pharmaceutical industry in Monaco due to its strong brand image (Bendapudi and Robert 15-17). Porter’s analysis gives current position of the market, which can help in assessing the competitive position of Therascience. As per this analysis, company should take immediate care to stimulate its legal system and formulate new business plan to improve its competitive position. Apart from that, the company needs to focus on overcoming its weak areas through implementing effective marketing strategy. Conclusion: This report focused on the analysis of the business strategies and decisions made by Therascience. In doing so, various tools and techniques like SWOT analysis, Porter’s five forces analysis and PESTLE analysis are found to be very efficient in providing sufficient information about the company. Internet based marketing strategy and adoption of lean management style is found to be effective enough to provide beneficial result. Apart from strength, there are some weak areas of Therascience such as low employee morale, diseconomies of scale etc. where quick improvements are needed. Implementation of relevant strategy can prove to be effective in retaining its position in the pharmaceutical industry throughout the globe. Appendices SWOT analysis Therascience Strength Weakness Well developed industry and strong brand image Cost competitiveness due to strong and increasing manufacturing base Low employee morale Competitor firm has more funds to work with Diseconomies of scale Opportunities Threats Continue to improve customer service Charge economic price so that consumer from all economic background can purchase Upgrade official website and make it attractive High market competition New entrants entering the market place Impact of government operation on the industrial operation PESTLE analysis of Therascience Political Economical Growing political focus on the health care service Modernization of the healthcare across the world economy Decreasing value of euro against dollar Reference pricing increase price of the pharmaceutical products across the broader Increasing pressure on pricing strategy Global economic crisis Reduction in the disposable income of people Reduction in the pharmacy growth in the international market Increasing number of buying pressure putting upward pressure on pricing Social Technology Increasing people’s awareness towards health care and increasing expectation Increasing people’s activism through the development of social networking technology Huge pressure from the stakeholder’s side Increasing demand for customize treatment Increasing digital communication has made communication to the patients more easy and transparent Legal Environmental Changing advertisement law and activities Global inconsistencies Increased litigation and more focus on education Need to focus on eco opportunities to develop market in Monaco Growing community agenda and environmental awareness Porter’s five forces analysis Competitive position (Porter’s five forces) Direction Incumbent Rivalry High Bargaining power of the supplier High Bargaining power of the buyers Low Threats of new entrance Low Threats of substitute products Low Job description Post Title Homecare Pharmacist Department Pharmacy Responsibility Investigate and develop report on current and future trend of patient’s pathway Coordinate with multidiscipline health care teams and implement new home care treatment Educational Qualification Qualified to MPharm level with min 3 year working knowledge as a pharmaceutical staff Duties and key areas To manage and delivery medicine to the patients Supervise pharmacists team and medicine management technicians while they provide clinical service To advice the assistant director pharmacy Person’s specification Knowledge and qualification Master degree in Pharmacy (MPharm) from an well reputed institution or board Postgraduate Clinical Diploma Experience/ Experience Min 3 year clinical post registration experience in a hospital Ability to mage time and handle all task nicely Experience to manage change quickly Financial and statistical information Works cited Anderson, Carol. 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