A CASE STUDY PRESENTATION ON

NOVARTIS MANANGING THE SALES FORCE PRESENTED BY ABHIJIT CHUMKI MOUMITA NEHA SHALINI

NOVARTIS

Indias Pharmaceuticals Industry

Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs at affordable prices are available to the vast population of this subcontinent.
The

Richard Gerster

Topics to be covered.
Abstract Industry overview Company overview SWOT analysis Distribution channel Future challenges Recent trends in pharmaceuticals Questions

Summary
Novartis was formed in 1996 as a result of the merger of two Swiss chemical/pharmaceutical companies - Ciba Geigy and Sandoz Ltd. This merger made Novartis, with its headquarters in Switzerland, one of the biggest pharmaceutical companies in the world. The company's product line consisted of branded pharmaceuticals, generics, animal health products as well as consumer health products, eye-care and baby care.

 Novartis was spread in around 140 countries with 73,000 employers. Novartis provided periodic training and incentives in form of monetary packages and in other forms. The training provided to the sales representatives helped to develop their selling skills . There was also reviews collected for each sales person and thus leading to performance appraisal. Owing to all these HR policies Novartis was awarded and in a survey conducted it was one of the leading companies for the employees to work.

OVERVIEW
The Indian pharmaceutical sector has come a long way, being almost non-existent before 1970 to a prominent provider of healthcare products, meeting almost 95 per cent of the country's pharmaceuticals needs The Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

MARKET SHARE OF KEY THERAPUTIC CATEGORIES

BREAK UP OF INDIAN PHARMA INDUSTRY

ESTABLISHED INFRASTRUCTURE FOR PHARMA MANUFACTURING AND R&D

Vision 2020
The Indian pharmaceutical industry shall ensure that essential drugs at affordable prices are available to the vast population of this sub-continent and also continue providing employment for millions. India shall implement all the rules and regulations, which guide, monitor and control the activities of the providers of the healthcare system in the country and shall examine the way to bring them up to international standards The government should implement the recommendations of Mashelkar committee and constitute the Central Drug Authority at the earliest. The basic course of education should be designed to ensure that the newly qualified pharmacist has the necessary knowledge and skills to commence practicing competently in a variety of settings including community and hospital pharmacy and the pharmaceutical industry.

 Indias Patents Act should ensure that it does not exceed the requirements of TRIPS, and that prioritizes access to medicines and public health, while retaining the right to participate in the compulsory license scenario. India should lead a movement of developing nations and create a TRIPS south and G-20 alliance is a step in that direction

RISING CONFIDENCE OF GLOBAL PHARMA COMPANIES IN INDIAN MARKET

CHALLENGES
Underdeveloped new molecule discovery program Hue & cry against exploitation Back lash against outsourcing IP leakage Restricted items Reservation for small scale industries No brand value Generic competition

OPPORTUNITIES
Competent workforce: India has a pool of personnel with high managerial and technical competence as skilled workforce. It has the largest English speaking population in the world. Professional services are easily available. Cost-effective Chemical Synthesis: Its track record of development, particularly in the area of improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk drugs.

Type - Public AG Industry -Pharmaceuticals Founded -1996 (from merger) Headquarters - Basel, Switzerland Products - Pharmaceuticals, generic drugs, over-the-counter drugs, vaccines, diagnostics, contact lenses, animal health Revenue - US $58.566 billion (2011) Operating income - US $10.998 billion (2011) Net income - US $9.245 billion (2011) Employees - 119,418 (FTE, end 2010) Subsidiaries - Ciba Vision, Sandoz, Alcon , Chiron Corporation

Novartis AG headquarters in Basel

Daniel Vasella

Ulrich Lehner
Vice Chairman

Chairman

Strategy is to provide healthcare solutions that address the evolving needs of patients and societies worldwide. Mission We want to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life. We also want to provide a shareholder return that reflects outstanding performance and to adequately reward those who invest ideas and work in our company.

SWOT ANALYSIS

STRENGTH : 1. Brand Image 2. Global reach 3. Low cost producer drug. 4. Good return providing company to the investors

Weakness:
Damage in goodwill.

Low profitability.
No special drug formulation for children. Lack of resources to exploit prominent opportunities.

Opportunities:
Huge market for lifestyle drugs. Indian market is one of the least penetrated. Strong research and development. High market growth . Low threat of new entrants/high competition .

THREAT:
Increasing obsolesce technology of

Competition from peer like (Merck. GSK.)

Suggestions
Training to employees Proper Interaction Giving allowances & perquisites to retain employees. Appoint right person to right Job. Develop ethical practices

Distribution channel of indian pharmaceuticals

 In 2006, the market size of Indias pharmaceutical logistics segment (distribution) was valued at around $200 million and the logistics/distribution industry has been growing at an average annual growth rate of 4% since2002. According to the Indian Retail Druggists and Chemists Association, in 1978, there were roughly 10,000 distributors and125,000 retail pharmacies in India. Today, the total number of stockists in India is around 65,000 and the number of pharmacies is about550,000, an increase of around 6-and 4-fold, respectively.

CHANNELS OF DRUG DISTRIBUTION

Drug distribution in India is layered and regulated. Unlike in the West, where a manufacturer can directly supply goods at the retail level, products in India move through a chain of intermediaries. The manufacturer supplies goods to the first layer comprising a clearing and forwarding agent, a super stockist or a company-owned depot. These, in turn, supply to stockist from whose premises goods are routed to wholesalers, medical institutions, hospitals and retailers. The retailer dispenses the drugs to final consumers. Manufacturers can directly supply to institutions and hospitals, but never to a retailer

FLOW CHART

Future Challenges
Pharmaceutical companies in India have realized the importance of SCM and are aggressively looking for ways to improve the costs associated with SCM. Distribution in India is proportionally much more costly than it is in the US or EU. The companies, which have spent as much as one-third of their revenues toward financing their supply-chain operations, recognize that the cost of logistics is very high in India.

US and EU, the expenditure on SCM alone is perhaps 2%, whereas in India it averages 4 6% of total sales. According to Gokarn, Its mainly in India the cost of drugs is very low compared to the developed markets. Taking into consideration the poor infrastructure and extreme geographic conditions, it is difficult to curtail the cost involved in SCM.

Latest Trends in Pharmaceutical Companies

Increasing Role of Generics: Emerging Markets Personalized Medicine

Novartis used simulation techniques as part of its training program for frontline managers. What was the need for this program and what were the benefit derived from it?

Answer: According to the case study, The simulation techniques used in the company helped the frontline managers to improve their marketing and sales skills. As frontline sales managers were responsible for handling the sales representatives and take important decisions like targeting customers, time management, allocation of resources. These simulation packages proved to be successful in terms of improving the marketing skills and selling skills of the sales managers and thus helped the sales managers to provide the same training to the sales representatives for developing their selling skills.

The training also proved to be beneficial as the sales targets were achieved. The sales representatives got motivated and started performing even better and achieved the targets. Currently, Novartis has 1,15,000 employees across 140 countries. It has increased its number of training centers to meet increasing demand for training. Trainees include customers as well as Novartis Diagnostics employees in sales field service and technical support.

Novartis conducted regular performance appraisals to measure the performance of its sales representatives. How did these appraisals help the organization? What are the hurdles in the way of a good performance appraisal?

Novartis followed a review system where a performance review of salespersons was conducted throughout the year on both formal and informal basis. Performance appraisal provide performance feedback to the employee. employee can come to know about their job related strengths and weakness. such feedback enables the employee to correct their weakness and improve .Formal review was conducted on yearly basis and informal review was conducted periodically.

 This review helped the sales managers to monitor the sales representatives performances. The sales reports , requisition orders and customer information were the tools that aided the sales manager in measuring the performance of the sales representatives

Bibliography
Novartis official page Wikipedia Google scholar