BUSINESS MANAGEMENT CASE STUDY

B-PHARMA

SECTION A

With reference to B-Pharma, describe two ways in which Corporate

Social Responsibility could be important.

When carried out experiments on animals and some of them being painfully
killed, B- Pharma found themselves in the centre of controversy reported
by media outlets around the globe. By this the firm almost lost their
reputation.

Although, there could be some ways such as Corporate Social

Responsibility by which B- Pharma could do some benefit for the society.

In this case, B- Pharma should get all the chemicals tested before
experimenting on animals.

CSR for companies like B- pharma could be done because drugs and
medicines business which requires pretesting on animals and human
beings before being launched in the market. Therefore, in order to maintain
their reputation and growth in business, it is necessary that the company
has to abide by the ethical and legal norms

Company can think off substituting animals with computed aided

programmes to test their drugs before they are launched. This will be a
very innovative feature in terms of Corporate Social Responsibility.
However, company cannot reply on this method alone but definitely the
reliance on testing on animals and human beings could be reduced.

Apply the Boston Consulting Group (BCG) matrix to B-Pharmas

product portfolio.
 Market Growth
Y- axis
Market share
Cash Cow Stars

High - Pharmax Pharmaflo

Dogs Problem Child

Low - none Phamatics and pharmaslip

Cash Cow - Pharmax

This is an important drug of the company which is still giving revenue.
However, because it has reached saturation point therefore the chances of
growth are limited.

Stars - Pharmaflo
Pharmaflo is doing very well in the market. The drug is growing rapidly in
the market therefore only investment of advertisement is required so that
the drug can maintain its peak position.

Problem Child - Pharmatics and Pharmaslip

Pharma slim is young brand of the company and can do well in the market
if aggressive selling strategy is adopted. In this age when to become slim is
gaining momentum worldwide. Therefore, the management should nurture
this brand very carefully and consistently so that one day it may find place
in the stars category of BCG Matrix.

Likewise, Pharmatics is also a new drug of the company which has shown
satisfactory results initially. This drug can bring good revenue to the
company in future because it is linked to the cosmetic industry and
therefore, this drug also requires careful and consistent monitoring.
Both pharmaslip and pharmatix are relatively young brands which hold
tremendous potential to increase market share of the company. However,
the company has to aggressively advertise the drugs and keep the prices
competitive so that in future both drugs can earn handsome revenue and
move to stars category of BCG Matrix.

With reference to B-Pharma, outline two key features of operating as a

public limited company.

As B- Pharma is a public limited company, it can raise larger share capital

from public. Since it can sell its share to the public and anyone is able to
invest their money, the capital therefore can be raised much higher as
compared to the Private Limited Company.

Growth and Expansion Opportunities - Once the finance is raised, by

having more finance the firm is potentially available in a better
position/terms that the Private Limited Company. The Public Limited
Company has an advantage to pursue new projects, new markets as they
decided to grow and expand within the Pacific Rim. Due to this, B-Pharma
was able to open other smaller subsidiaries in other countries such as
Canada, Chile, Mexico, New Zealand, South Korea and Vietnam.

Explain the importance of branding for B- Pharma.

Branding is a very important factor for firms to keep in mind. A good

branding increases the value of the company, provides motivation to the
employees and eventually increases their morale. Talking about B-
Pharma, the firm has well established brand name that has been
maintained by aggressive advertising in specialist magazines. B-Pharmas
logo is present in all its products, its family branding has attracted
considerable brand loyalty Market research shows that most adults across
East Asia recognize B-Pharma labels and regard them as a mark of quality
and safety. B-Pharma drugs are trusted but are expensive. As B- Pharma
has already established their brand, it is easy for the firm to gain more
market share. Moreover, in this highly competing global market, it is crucial
to stand out from the crowd. B- pharmas brand name will therefore will
help the firm stand out from the thousands or millions of similar
organizations around the world. In addition to this B- Pharma has its
subsidiaries in many parts of the world, therefore, its important for B-
Pharma to have a good brand where customers are loyal which will
eventually create a good will of the firm.

Describe two benefits for B-Pharma of a cost-plus (mark-up) pricing

strategy for its drugs.

B-pharma fixes the price of the medicine by keeping in mind the price of
substitute medicines of the competitors in the market share, So that, it
should not lose its market share.

When B- pharma fixes its product price it keeps in mind the cost of
production and the cost of Research and Development on the medicine so
that it can fix the price by adding normal profits so that company can earn
profit.

Analyse the effectiveness of Susan James leadership style at the

Canadian subsidiary of B-Pharma

Susan James used the autocratic leadership style in which she has all the
problem in her own hands. She was not ready to delegate the power to the
subordinates. She wanted superior subordinate relationship to be clear
because she knows that due to autocratic leadership there are many
employees who will oppose to this policy and will be demotivated but to
correct this problem she implemented performance related pay which
meant if a person works efficiently he/she will get more pay.

By this leadership style firm will benefit in terms of better working

environment and there will be no confusion among the relationship
between superior and subordinate. Every employee has been given a
proper task to be performed within fixed timeframe which will lead to no
delays.