Arogya Parivar Case Analysis

By- Group 4
Sec - C
What is the concept of Shared Value?
Companies are widely thought to be prospering and proliferating at the expense of communities.
Business has
Often been criticized as a major cause of social, environmental and economic problems. As a
consequence, government officials are forced to set policies that undermine competition and
hamper economic growth. Thus, business is entangled in a mess.

One of the major reasons for such a scenario is the narrow approach of companies towards value
creation. Mostly. companies are focused on financial performance and do not pay heed to the
unmet needs in the market as well as broader influences on their long-term success.

Such a scenario can be avoided by using the concept of shared value. It is defined as generating
economic value in such a way that produces value for society by addressing its challenges. A shared
value approach reconnects company success with social progress

Is this concept applicable to Novartis, and if so, where?

Yes, the concept of shared value is applicable to Novartis.

 Novartis' senior management had given a nod to investigate BOP opportunities supported by a
simple mandate: To prove that Novartis could sustainably improve access to healthcare for the
world's poor.
 A team was assembled to initiate a two-step process:
o To identify a target country and a market segment with the potential to improve health
results for poor people at scale while yielding economic value for the company
o After understanding the needs of the target market, to decide on the specific approach
Novartis should take, be it developing a new product/service or strengthening local
supply chains
 India was the choice as first priority given the evident growth potential of the market

What are the necessary ingredients for success?

The necessary ingredients which Novartis needed for success are:

 Clarity on poor from urban or poor from rural

 To be in a position to invest to develop this new customer segment
 How is traditional "go-to-market" had to evolve to reach the new segment?
 Aligning the new business model with its other business activities without causing conflict or
disruption
 Managing and staffing the new business
 Scalability
 Sustainability
 Information on local healthcare consumption patterns
 The way patients sought treatment
 Cultural aspects of healthcare
 Existing barriers to entry
 Involvement of Rural Medical Practitioners (RMP) as they were often a pillar of community
 Involvement of Auxiliary nurse midwives ( ANM), Angan Wadi workers (AWW) for generating
awareness
Discuss the challenges for Novartis?
1. Infrastructure issues would impede growth
2. The unreliability of the supply chain had a negative impact on patients' trust in the system and
willingness to continue with the treatment
3. A struggle to educate patients and even the doctors
4. Finding a way to recruit more females
5. Changing local beliefs and habits associated with healthcare services was an uphill task

How did Novartis resolve these challenges? Identify the options and discuss
the pros and cons of each?

Options:

Problem 1: Infrastructure issues would impede growth

Actions:

1. Use of Tata Tempo Traveler 407 with A/V equipment and an inverter to provide electricity,
which would ferry a couple of HEs, a driver and a support staff
2. Collaborate with other organizations
3. Put on a 15-minute street theatre using local village actors to deliver Arogya Parivar's
message.
4. Tap the public-speaking skills of the HE through story telling

Evaluation

Action Number Pros Cons

1  Van would travel some 50-60  Cost and constraints of pavements being too
km a day, targeting select narrow to reach the heart of the villages
villages in UP, attracting  80$-100$ a day, the van was expensive and
audience of 500 or more resource-intensive.

 Sandoz and chewable calcium

were passed down to women

2  Reduce cost  Time allocation to Arogya message was

unclear
 When the message would appear relative to
other party's messaging was unclear
3  Cheaper way  No standardization
 Actors costed $15-$17  No consistency
 Actors did not like to travel and were unable
to commit to more days as they had their
own business to run
4  Dependence on standard script
Problem 2: The unreliability of the supply chain had a negative impact on patients' trust in
the system and willingness to continue with the treatment

Actions:

1. Build a direct distribution of network to the small villages

2. Use HE as deliverymen
3. Appoint NGOs as secondary distributors
4. Motivate existing distributors to help

Evaluation

Action Number Pros Cons

1  Restrictions on number of distributors
 Not efficient for Novartis to expand its
own distribution given the current scale
2  Legal and ethical constrains
 Required drug distribution to be done by
qualified pharmacists due to quality
issues
3  Partnering with NGO, they were often
not allowed to sell products
 Cannot make profit
4  Can create revenues and profits
 Customized journey plans can
help reduce cost
 Replenishment cycles can help
optimize logistics
Problem 3: Changing local beliefs and habits associated with healthcare services was an
uphill task

Actions:

1. Suggest correct therapy on top of the village practices

2. Infotainment
3. "Liquorish" Flavor

Evaluation

Action Number Pros Cons

1  More adoption of medicines  Not strictly ethical
 Repeat purchase
2  Increase buy-in
3  Repeat purchase
 Easy to consume

Pilot Actions

1. Arogya Parivar started as an outsourced, separately managed unit that operated

independently of Novartis
2. Novartis decided to work with Teamlease, a local recruitment agency, to recruit HE
3. The HE were trained in TB, nutrition, allergies and infections so that they can give sound
advice
4. The role of HE was to create awareness of the Arogya umbrella program and availability of
services
5. In the beginning HE targeted community meetings and then use the audience to talk about the
symptoms of TB, the cure ad the Arogya Parivar program.
6. To cater to local preferences and cultural biases, education topics and programming, as well as
the form of delivery were adapted by the HE
7. On the distribution side, Arogya Parivar worked to develop a network of doctors to take on
patients, as well as a network of chemists/pharmacists to stock relevant products using sales
supervisors (SS)
8. To ensure that there was no push back from the government of government doctors, Parivar
also contacted government doctors and told them about the program, all the while making
sure that there was no criticism of the DOTS program.