A sample Strategic Management paper for Pharmaceutical Industry. Data are as of 2014.

1. Strategic Management Paper on …

2. Prayer
Heavenly Father, we come to You today asking for Your guidance,
wisdom, and support as we begin this session.
Help us to engage in a meaningful discussion and continue to
remind us that all that we do here today,
all that we accomplish,
is for the pursuit of truth for the greater glory of You.
All we ask in Jesus’ name,
Amen.

3. Sanofi: A Series of Mergers . . .
A French Company -> Main HQ in Paris France
One of the biggest pharmaceutical company in the world; ranks #3
Operates in 100 countries; 100,000 employees; 19,300 scientists

4. Sanofi in the Philippines
Operates in 3 business entities:
Sanofi - Aventis -> Pharmaceutical + CHC Division
Ranks #7 in the overall Pharma company (as of June 2014)
Therapeutic expertise:
Cardiovascular Diseases
Diabetes
Oncology
Central Nervous Disorders
Gastrointestinal
Sanofi Pasteur -> Vaccine Division
Merial -> Animal Health Division
Main Office in Makati City (No owned manufacturing plant & Warehouse)
Operates as Importer, Wholesaler, Trader, & Distributor
Main Distributors: Zuellig Pharma Corp. (ZPC) & Metro Drug Inc. (MDI)

5. Sanofi’s Organizational Chart
Top Management
Middle Management
Functional Level
General
Manager
Business
Unit
Marketing Sales
Support
Groups
Human
Resources
Business
Support
Business
Development
Finance &
Admin
Public Affairs &
Communication
Medical Affairs

6. Vision Statement
Current Vision Statement:
“We envision Sanofi-aventis as a leading, diversified healthcare provider
promoting the well-being of Filipinos. We aim to be the preferred; most
respected and admired company in the Philippines.”
PARAMETERS YES / NO
1 Does it clearly answer the question: what do we want to become? YES
2 Is it concise enough yet inspirational? NO
3 Is it aspirational? YES
4 Does it give clear indications to when it should be attained? NO
Evaluation of Current Vision Statement:

7. Vision Statement
Recommended Vision Statement:
“To maintain the position in the top 10 leading pharmaceutical companies in the
Philippines and to be the market leader in Diabetes category by 2017.”
Evaluation of Recommended Vision Statement:
PARAMETERS WHAT PART OF THE STATEMENT
1
Does it clearly answer the
question: what do we want to
become?
To maintain the position in top 10 leading
pharmaceutical companies in the Philippines and
to be the market leader in Diabetes category by
2017.
2
Is it concise enough yet
inspirational?
to be the market leader in Diabetes category by 2017.
3 Is it aspirational?
to be the market leader in Diabetes market category
by 2017.
4
Does it give clear indications to
when it should be attained?
to be the market leader in Diabetes category by 2017.

8. Mission Statement
Current Mission Statement:
“We are Sanofi-Aventis Philippines.
We are a global healthcare provider committed to:
- Offer our patients, doctors and consumers (1) a broad spectrum of superior
products and services from prevention to cure. (2)
- Provide our people an empowering environment conducive to productivity, creativity
and innovation which enhances personal worth and growth and promotes high
employee engagement. (9)
- Be an active partner of government and relevant social institutions (10) in improving
health outcomes (8) and well-being of Filipinos. (3)
- Build strong relationships with our business partners to ensure mutually beneficial
results. (7)
- Deliver sustainable growth and increasing profitability to our stockholders (5).”

9. Mission Statement
PARAMETERS
YES /
NO
IF YES, WHICH PART OF THE STATEMENT?
1 Customer YES
Offer our patients, doctors and consumers a broad spectrum of superior
products and services from prevention to cure.
2 Products or services YES
Offer our patients, doctors and consumers a broad spectrum of superior
products and services from prevention to cure.
3 Markets YES
We are a global healthcare provider committed to… in improving health
outcomes and well-being of Filipinos….
4 Technology NO None
5
Concern for survival,
growth, profitability
YES Deliver sustainable growth and increasing profitability to our stockholders
6 Philisophy NO None
7 Self-concept YES
Build strong relationships with our business partners to ensure mutually
beneficial results
8
Concern for public
image
YES
Be an active partner of government and relevant social institutions in improving
health outcomes and well-being of Filipinos
9 Concern for employees YES
Provide our people an empowering environment conducive to productivity,
creativity and innovation which enhances personal worth and growth and
promotes high employee engagement.
10
Concern for nation
building
YES
Be an active partner of government and relevant social institutions in
improving health outcomes and well-being of Filipinos
Evaluation of Current Mission Statement:

10. Mission Statement
Recommended Mission Statement:
“We are Sanofi-Aventis Philippines.
We are a global healthcare provider committed to:
- Offer our buyers and end consumers (1) a broad spectrum of superior products and
services from prevention to cure (2) through the use of its state-of-the-art research
facilities worldwide. (4)
- Provide our people an empowering environment conducive to productivity, creativity
and innovation which enhances personal worth and growth and promotes high
employee engagement. (9)
- Be an active partner of government and relevant social institutions (10) in improving
health outcomes (8) and well-being of Filipinos (3), because health matters. (6)
- Build strong relationships with our business partners to ensure mutually beneficial
results. (7)
- Deliver sustainable growth and increasing profitability to our stockholders (5).”

11. Mission Statement
Evaluation of Recommended Mission Statement:
PARAMETERS WHAT PART OF THE STATEMENT? EXPLANATION
1 Customer
Offer our buyers and end consumers a broad spectrum of superior products and
services from prevention to cure through the use of its state-of-the-art research facilities
worldwide
Customers are classified into two types:
End consumers = patients and healthy individuals
Buyers = drugstores, modern trade or supermarkets, and general trade (hospitals,
clinics, government units, HMO, and wholesalers/sub-distributors)
2
Products or
services
Offer our buyers and end consumers a broad spectrum of superior products and
services from prevention to cure through the use of its state-of-the-art research
facilities worldwide
3 Markets
We are a global healthcare provider committed to…. in improving health outcomes and
well-being of Filipinos….
4 Technology
Offer our buyers and end consumers a broad spectrum of superior products and
services from prevention to cure through the use of its state-of-the-art research
facilities worldwide

12. Mission Statement
Evaluation of Recommended Mission Statement:
PARAMETERS WHAT PART OF THE STATEMENT? EXPLANATION
5
Concern for
survival,
growth,
profitability
Deliver sustainable growth and increasing profitability to our stockholders
6 Philisophy
Be an active partner of government and relevant social institutions in improving health
outcomes and well-being of Filipinos, because health matters.
7 Self-concept
Build strong relationships with our business partners to ensure mutually beneficial
results
8
Concern for
public image
Be an active partner of government and relevant social institutions in improving health
outcomes and well-being of Filipinos, because health matters.
9
Concern for
employees
Provide our people an empowering environment conducive to productivity, creativity
and innovation which enhances personal worth and growth and promotes high
employee engagement.
10
Concern for
nation
building
Be an active partner of government and relevant social institutions in improving
health outcomes and well-being of Filipinos, because health matters.

13. Research and Development Process
R&D Spending: $4 - $11 Billion for every drug being developed!

14. Types of Products
Drug
Non-Drug
OTC or Over-The-Counter
Ethical / Prescribed

15. Types of Products
Normal Selling Product
Product under Government Tender
For Government
Use Only

16. Supply Chain Process of a Pharma Company

17. Total Pharmaceutical Market
Historical and Growth Forecast

18. Market Segmentation
PNDF General Category
MAT (06/2012)
PHP (+ 000)
MAT (06/2013)
PHP (+ 000)
MAT (06/2014)
PHP (+ 000)
% Mkt
Size
TOTAL 114,769,935 119,643,350 125,381,488
1. CARDIOVASCULAR MEDICINES 17,898,559 18,607,194 19,708,371 15.7%
2. ANTI-INFECTIVES 16,463,457 16,201,877 16,378,178 13.1%
3. VITAMINS & MINERALS (Preventive) 13,810,894 14,749,930 14,853,551 11.8%
4. RESPIRATORY MEDICINES 12,366,557 12,103,108 13,814,088 11.0%
5. HORMONES & HORMONE ANTAGONISTS [DIABETES: Php 8 B] 9,409,224 10,837,101 11,541,972 9.2%
6. MEDICINES ACTING ON NERVOUS SYSTEM 9,441,821 10,129,590 10,850,029 8.7%
7. GASTROINTESTINAL MEDICINES 5,936,646 6,165,585 6,320,215 5.0%
8. NUTRITIONALS (Preventive) 6,548,160 6,608,980 6,222,854 5.0%
9. MEDICINES ACTING ON MUSCULOSKELETAL SYS & JOINTS 5,235,681 5,477,315 5,695,469 4.5%
10. DERMATOLOGICAL & MUCOUS MEMBRANE AGENTS 4,978,812 5,358,141 5,671,659 4.5%
11. MEDICINES AFFECTING THE BLOOD 3,464,824 3,800,889 4,058,922 3.2%
12. ANTI-NEOPLASTICS & IMMUNOSUPPRESSIVES [ONCOLOGY] 3,251,946 3,317,125 3,839,428 3.1%
13. ANTI-ALLERGICS 1,808,121 1,836,428 2,117,561 1.7%
14. OPTHALMOLOGICAL PREPARATIONS 1,620,076 1,631,736 1,635,685 1.3%
15. OTHERS: NON-THERAPEUTIC (Preventive) 654,985 789,967 769,584 0.6%
16. OTHERS: THERAPEUTIC 688,922 840,450 691,104 0.6%
17. EARS, NOSE, THROAT PREPARATION 509,491 547,300 564,769 0.5%
18. MEDICINE CORRECTING WATER ELECTROLYTE, ACID-BASE, &
CALORIC DISTURBANCES
505,526 459,964 469,913 0.4%
19. IMMUNOLOGICALS (Preventive) 131,518 133,689 113,307 0.1%
20. BLOOD PRODUCTS & SUBSTITUTES 44,713 46,982 64,831 0.1%
Therapeutic
Preventive

19. Porter’s Five Forces Model
The Industry is Attractive!!

20. RANK COMPANY
*MAT (6/2014)
PHP +000
%
Market
Share
TOTAL 125,381,488
1 UNITED LABORATORY 32,516,276 25.9%
2 PFIZER INC 8,557,230 6.8%
3 GLAXOSMITHKLINE 8,291,314 6.6%
4 ABBOTT LAB 4,956,228 4.0%
5 NOVARTIS 4,936,674 3.9%
6 BOEHRINGER INGELHEIM 4,726,986 3.8%
7 SANOFI-AVENTIS 4,153,555 3.3%
8 MERCK SHARP&DOHME 4,008,370 3.2%
9 JOHNSON 3,540,001 2.8%
10 ASTRAZENECA 3,095,136 2.5%
Top 20 Leading Pharmaceutical Company
RANK COMPANY
*MAT (6/2014)
PHP +000
%
Market
Share
11 ROCHE PHILIPPINES 2,966,762 2.4%
12 NATRAPHARM 2,532,988 2.0%
13 BAYER PHARM 2,219,014 1.8%
14 PASCUAL LABS 1,932,031 1.5%
15 SERVIER PHILS 1,904,289 1.5%
16 CATHAY DRUG CO 1,889,647 1.5%
17 MERCK INC 1,645,609 1.3%
18 GETZ PHARMA 1,355,237 1.1%
19 MENARINI 1,322,634 1.1%
20 TAI SHO PHARM 1,314,802 1.0%
* Others 27,516,705 21.9%
*** 100+ Pharmaceutical Companies in the Philippines
Moving Annual Total Sales: as of June 2014

21. Top 10 Pharmaceuticals Growth Performance:
(as of June 2014)
UNITED LAB
PFIZER INC
GLAXOSMITHKLINE
ABBOTT LAB
NOVARTIS
BOE. INGELHEIM
SANOFI-AVENTIS
MERCK SHARP&DOHME
JOHNSON
ASTRAZENECA
TOTAL MARKET
(8.0%) (4.0%) 0.0% 4.0% 8.0% 12.0% 16.0%
4.8%
2.1%
8.0%
(8.7%)
1.5%
12.8%
15.6%
6.1%
6.9%
1.0%
7.8%

22. Competitive Profile Matrix (CPM)

23. Top Companies in Diabetes Category
COMPANY RANK
MAT (06/2014) MAT (06/2013)
PHP (+ 000) %GR PHP (+ 000)
MERCK SHARP&DOHME 1 1,068,465 5% 1,016,248
SANOFI-AVENTIS 2 959,572 14% 839,422
NOVO NORDISK 3 765,029 31% 583,673
UNITED LABORATORY 4 763,517 4% 731,696
NOVARTIS 5 729,803 28% 570,217
SERVIER PHILS 6 547,434 11% 492,225
BOEHRINGER INGELHEIM 7 486,965 90% 256,894
ELI LILLY 8 431,664 -12% 491,579

24. Top Brands in Diabetes Category
RANK BRAND COMPANY
MAT (06/2014) MAT (06/2013)
PRODUCT TYPE
PHP (+ 000) %GR PHP (+ 000)
1 JANUMET MERCK SHARP&DOHME 586,548 -5% 620,203 ORAL THERAPY
2 LANTUS SANOFI-AVENTIS 565,049 25% 450,411 INSULIN THERAPY
3 DIAMICRON SERVIER PHILS 547,434 11% 492,225 ORAL THERAPY
4 GALVUSMET NOVARTIS 451,808 31% 344,347 ORAL THERAPY
5 TRAJENTA BOEHRINGER INGELHEIM 438,067 71% 256,894 ORAL THERAPY
6 NOVOMIX 30 FLEXPEN NOVO NORDISK 392,806 48% 264,744 INSULIN THERAPY
7 JANUVIA MERCK SHARP&DOHME 277,563 -17% 333,226 ORAL THERAPY
8 GLUMET UNITED LABORATORY 242,569 11% 218,925 ORAL THERAPY
9 GLUCOPHAGE MERCK 242,457 -7% 259,313 ORAL THERAPY
10 HUMULIN 70/30 ELI LILLY 201,111 17% 171,875 INSULIN THERAPY
11 GALVUS NOVARTIS 174,929 25% 140,168 ORAL THERAPY
12 NORIZEC UNITED LABORATORY 161,438 -1% 162,720 ORAL THERAPY
13 METFORMIN RITE UNITED LABORATORY 152,547 -2% 156,231 ORAL THERAPY
14 GLUCOVANCE MERCK 144,572 -11% 163,132 ORAL THERAPY
15 MIXTARD 30 HM NOVO NORDISK 138,468 23% 112,741 INSULIN THERAPY
16 SOLOSAMET SANOFI-AVENTIS 137,607 -2% 140,300 ORAL THERAPY
17 XELEVIA MERCK SHARP&DOHME 121,832 114% 56,974 ORAL THERAPY
18 SOLOSA SANOFI-AVENTIS 105,084 -6% 111,541 ORAL THERAPY
19 ONGLYZA ASTRAZENECA 99,942 -15% 117,499 ORAL THERAPY
20 HUMULIN N ELI LILLY 92,539 -5% 96,935 INSULIN THERAPY

25. ExternalFactorEvaluation(EFE)Matrix

26. Value Chain Analysis

27. Sanofi’s Top 20 Product
RANK
PRODUCT
MAT (06/2014)
PHP +000
% to
TOTAL
GENERAL CATEGORY
TOTAL 4,153,555
1 LANTUS 565,049 14% HORMONES & HORMONE ANTAGONISTS (DIABETES)
2 ESSENTIALE FORTE P 379,258 9% GASTROINTESTINAL MEDICINES
3 PLAVIX 263,801 6% CARDIOVASCULAR MEDICINES
4
LACTACYD FEMININE
HYGIENE
237,444 6% CONSUMER HEALTHCARE
5 APROVEL 234,160 6% CARDIOVASCULAR MEDICINES
6 ERCEFLORA 178,902 4% GASTROINTESTINAL MEDICINES
7 LACTACYD BABY BATH 155,703 4% CONSUMER HEALTHCARE
8 SOLOSAMET 137,607 3% HORMONES & HORMONE ANTAGONISTS (DIABETES)
9 COAPROVEL 134,878 3% CARDIOVASCULAR MEDICINES
10 LASIX 131,717 3% CARDIOVASCULAR MEDICINES
11 FLAGYL 116,622 3% GASTROINTESTINAL MEDICINES
12 GARDAN 105,769 3% MEDICINES ACTING ON NERVOUS SYSTEM
13 SOLOSA 105,084 3% HORMONES & HORMONE ANTAGONISTS (DIABETES)
14 RENVELA 100,937 2% ANTI-INFECTIVES
15 CLEXANE 91,162 2% CARDIOVASCULAR MEDICINES
16 MAALOX 83,094 2% GASTROINTESTINAL MEDICINES
17 CLOPIDOGREL (Gx) 78,092 2% CARDIOVASCULAR MEDICINES
18 TAXOTERE 77,500 2% ANTI-NEOPLASTICS & IMMUNOSUPPRESSIVES (ONCOLOGY)
19 APIDRA 71,482 2% HORMONES & HORMONE ANTAGONISTS (DIABETES)
20 ATORWIN 60,186 1% CARDIOVASCULAR MEDICINES

28. Portfolio Analysis
GENERAL CATEGORY
MAT (06/2014)
PHP +000
% to TOTAL
CARDIOVASCULAR MEDICINES 1,223,818 34%
HORMONES & HORMONE ANTAGONISTS (DIABETES) 1,065,271 29%
GASTROINTESTINAL MEDICINES 909,336 25%
ANTI-NEOPLASTICS & IMMUNOSUPPRESSIVES (ONCOLOGY) 173,967 5%
MEDICINES ACTING ON NERVOUS SYSTEM 159,195 4%
ANTI-INFECTIVES 114,445 3%
SUB-TOTAL 3,646,032

29. InternalFactorEvaluation(IFE)Matrix

30. IFE MATRIX CPM
KEY INTERNAL FACTORS RATING
CRITICAL
SUCCESS
FACTORS
RATING
STRENGTHS
S1
Broad product portfolio which
address the diseases that
accounts for the leading
causes of morbidity and
mortality
4
CSF2
Broad Product
Portfolio
4
S2
Consistently offering and
providing high quality products
4
CSF1
Product Safety and
Efficacy
4
S3
Strong diabetes product line
especially for insulin products
4
S4
Maintains healthy relationship
with customer
3
CSF4
Buyer Relationship 3
S5
Commitment to ethical
business practice
4
CSF7
Business Ethics 4
Matching of IFE and CPM
IFE MATRIX CPM
KEY INTERNAL FACTORS RATING
CRITICAL
SUCCESS
FACTORS
RATING
WEAKNESSES
W1
Absence of respiratory
medicines in the current
product portfolio
2
W2
Highly dependent to ZPC
group in distribution activities
2
CSF5
Distributor
Relationship
2
W3
Vulnerable to government
controlled pricing
1
W4
Highly dependent to patented
and promoted drugs
2
W5
Less aggressive marketing
activities and initiatives
2
CSF3
Product Marketing
and Brand
Awareness
2

31. Financial Analysis
LIQUIDITY RATIOS 2011 2012 2013 KEY COMPETITOR’S AVERAGE
CURRENT RATIO 3.16 3.13 1.84 2.60
QUICK RATIO 2.05 2.20 1.40 1.94
LEVERAGE RATIOS 2011 2012 2013 KEY COMPETITOR’S AVERAGE
DEBT TO TOTAL ASSET RATIO 0.30 0.30 0.51 0.38
DEBT TO EQUITY RATIO 0.43 0.43 1.04 0.65
LONG TERM DEBT TO EQUITY RATIO 0.03 0.02 0.05 0.04
ACTIVITY RATIOS 2011 2012 2013 KEY COMPETITOR’S AVERAGE
INVENTORY TURNOVER 2.73 2.88 3.30 3.32
FIXED ASSET TURNOVER 29.68 26.75 24.55 38.91
TOTAL ASSET TURNOVER 1.56 1.38 1.26 1.43
AR TURNOVER 4.47 3.95 4.07 5.80
AVERAGE COLLECTION PERIOD 81.72 92.33 89.61 95.92
PROFITABILITY RATIOS 2011 2012 2013 KEY COMPETITOR’S AVERAGE
GROSS PROFIT MARGIN 0.45 0.45 0.44 0.49
OPERATING PROFIT MARGIN 0.07 0.10 0.10 0.17
NET PROFIT MARGIN 0.05 0.07 0.07 0.12
RETURN ON TOTAL ASSET 0.08 0.10 0.09 0.15
RETURN ON STOCKHOLDERS’ EQUITY 0.12 0.14 0.18 0.24
GROWTH RATIOS 2011 2012 2013 KEY COMPETITOR’S AVERAGE
SALES 5.8% 2.9% 3.0% -3.3%
NET INCOME 146.3% 38.7% 0.8% 40.5%

32. SWOT Matrix
STRENGTHS
1. Broad product portfolio which address the diseases that accounts
for the leading causes of morbidity and mortality
2. Consistently offering and providing high quality products
3. Strong diabetes product line especially for insulin products
4. Maintains healthy relationship with customer
5. Commitment to ethical business practice
OPPORTUNITIES S-O STRATEGIES
1. Growing market segment that accounts for
leading cause of mortality & morbidity
especially for non-communicable diseases
2. Growing number of buyers’ outlets and
future potential reach
3. Universal Healthcare (UHC) program
4. Growing population: 102M people by 2015
**62% from class D = 61M people
5. Increasing total healthcare expenditure
6. Technological advancement and innovation
1. Offer new & cheaper diabetes insulin therapy products
(S2, S3,O1, O2, O3, O4) PRODUCT DEVELOPMENT & RELATED
DIVERSIFICATION
2. Partner with government’s bidding program thru PITC-Pharma
(S1, S2, S4, O3, O4, O5) MARKET PENETRATION
3. Partner with new / existing buyers (S1, S4, S5, O2, O5)
4. Offer new medicines for rare diseases (S1, S2, O6) BEST-VALUE
FOCUS & RELATED DIVERSIFICATION
5. Position diabetes products as top-of-mind brand (S2, S3, O1, O2,
O4) MARKET PENETRATION

33. SWOT Matrix
STRENGTHS
1. Broad product portfolio which address the diseases that accounts
for the leading causes of morbidity and mortality
2. Consistently offering and providing high quality products
3. Strong diabetes product line especially for insulin products
4. Maintains healthy relationship with customer
5. Commitment to ethical business practice
THREATS S-T STRATEGIES
1. Expansion of the number of medicines
under government controlled price
2. Monopoly in distribution (ZPC controls 70%
of the pharmaceutical business)
3. Government legislation that allowing faster
entry of generic drugs into the market
4. Regulatory problem against counterfeit
drugs which account 10-30% of the market
5. Upward trend in unemployment rate
(average of 7.3%) and underemployment
rate (average of 19.7%)
6. Fluctuation in foreign exchange rate
1. Partner with government in educating customers about counterfeit
drugs and its effects (S2, S4, S5, T4)
2. Offer special pricing to distributor (S1, S4, T2) LOW-COST
LEADERSHIP
3. Avoid purchases of non-US dollar products (S2, T6)
4. Improve partnership with distributors (S4, T2)

34. SWOT Matrix
WEAKNESSES
1. Absence of respiratory medicines in the current product portfolio
2. Highly dependent to ZPC group in distribution activities
3. Vulnerable to government controlled pricing
4. Highly dependent to patented and promoted drugs
5. Less aggressive marketing activities and initiatives
OPPORTUNITIES W-O STRATEGIES
1. Growing market segment that accounts for
leading cause of mortality & morbidity
especially for non-communicable diseases
2. Growing number of buyers’ outlets and
future potential reach
3. Universal Healthcare (UHC) program
4. Growing population: 102M people by 2015
**62% from class D = 61M people
5. Increasing total healthcare expenditure
6. Technological advancement and innovation
1. Restructure sales organization to strengthen and focus in the
growing market segment (W4, O1)
2. Develop own respiratory medicines (W1, W4, O1) PRODUCT
DEVELOPMENT
3. Participate in buyer’s house-branding program (W3, W4, W5, O2)
MARKET PENETRATION
4. Acquire competitor’s respiratory medicine (W1, O1) HORIZONTAL
INTEGRATION
5. Increase marketing efforts on low performing, out-of-patent,
government controlled pricing products (W3, W4, W5, O1, O4,
O5) MARKET PENETRATION

35. SWOT Matrix
WEAKNESSES
1. Absence of respiratory medicines in the current product portfolio
2. Highly dependent to ZPC group in distribution activities
3. Vulnerable to government controlled pricing
4. Highly dependent to patented and promoted drugs
5. Less aggressive marketing activities and initiatives
THREATS W-T STRATEGIES
1. Expansion of the number of medicines
under government controlled price
2. Monopoly in distribution (ZPC controls 70%
of the pharmaceutical business)
3. Government legislation that allowing faster
entry of generic drugs into the market
4. Regulatory problem against counterfeit
drugs which account 10-30% of the market
5. Upward trend in unemployment rate
(average of 7.3%) and underemployment
rate (average of 19.7%)
6. Fluctuation in foreign exchange rate
1. Prune the generics product line in the portfolio (W4, W5, T3, T4)
DIVESTITURE
2. Partner with new distributor (W2, T2)
3. Offer generic counterpart to products with expiring patent (W4, T3)
PRODUCT DEVELOPMENT & RELATED DIVERSIFICATION
4. Gain control over current distributor (W2, T2) FORWARD
INTEGRATION
5. Volunteer non-promoted and out-of-patent drugs to government
controlled pricing (W3, W4, T1)

36. Boston Consulting Group (BCG) Matrix
STRATEGIES
• Forward, Background, &
Horizontal Integration
• Market Penetration, Market &
Product Development
• Related & Unrelated
Diversification
• Divestiture

37. Internal - External (IE) Matrix
STRATEGIES
• Forward, Background, &
Horizontal Integration
• Market Penetration, Market &
Product Development
• Related Diversification

38. GE / McKinsey Matrix
STRATEGIES
• Market Penetration
• Market & Product
Development

39. Grand Strategy Matrix
STRATEGIES
• Forward, Background, &
Horizontal Integration
• Market Penetration, Market &
Product Development
• Related Diversification

40. Summary of Matrices
STRATEGY OPTIONS SWOT BCG IE GE-Mc GSM TOTAL
Forward Integration 1 1 1 1 4
Backward Integration 1 1 1 3
Horizontal Integration 1 1 1 1 4
Market Penetration 1 1 1 1 1 5
Market Development 1 1 1 1 4
Product Development 1 1 1 1 1 5
Related Diversification 1 1 1 1 1 5
Unrelated Diversification 1 1 2
Horizontal Diversification 0
Joint Venture 0
Retrenchment 0
Divestiture 1 1 2
Liquidation 0
Low-cost Leadership 1 1
Best value-cost Leadership 0
Differentiation 0
Low-cost Focus 0
Best-value Focus 1 1

41. QuantitiveStrategicPlanningMatrix

42. QuantitiveStrategicPlanningMatrix
Secondary Strategy: Related Diversification
Primary Strategy: Market Penetration

43. Strategic Issues
External Environment
1. Increasing number of casualties coming from the leading causes of mortality
2. Low public health spending resulting to high out-of-pocket spending
3. Inequity in the health system
4. Monopoly in the nationwide distribution system
Internal Environment
1. Decline in the selling price of some products
2. Too much dependency in blockbuster patented products
3. Unable to compete in a strong and growing market
4. Distribution and logistics services

44. Objectives
Company Objectives
Financial Objectives
•Increase revenues by 6%, 7%, 8% in 2015, 2016, and 2017 respectively.
•Maintain Distribution & Selling expenses less than 33%, and General &
Administration expenses less than 8% of the net of sales.
Strategic Objectives
•To be the Top-of-mind company in Diabetes category
•Offer broad product portfolio; Bring innovative products to market
•Seize opportunities in government sector
•Strengthen partnership with distributors and buyers

45. Strategies
Primary: Market Penetration
• Optimize the presence of the existing established products and further expand its
footprint by gaining market share in present market (greater marketing efforts)
• Synergize all products from each segment to improve low performing products and
eventually create a stronger product portfolio
• Exert marketing efforts in the products that are already out-of-patent and under the
government mandated pricing to improve its low sales performance (marketing promos)
• Penetrate the public sector to reach the lower class income (class D), thru actively
participating in different government bidding programs.
Secondary: Related Diversification
• Offer new cheaper products but of the same quality to penetrate the lower income class
of the same segment.
• Launch the overall Sanofi’s product pipeline based on the R&D update.
• Diversify to other growing therapeutic segment of the pharmaceutical industry like
respiratory medicines.

46. Balanced Scorecard
PERSPECTIVE OBJECTIVES MEASUREMENT
TARGET
INITIATIVES
YEAR 1 YEAR 2 YEAR 3
Financial
Increase Revenues Annual Growth
Percentage
6% 7% 8% Enhanced marketing efforts & Launch new
products
Maintain general &
administration
expense to sales
Percentage of
general &
administration
expense to sales
< 8% < 8% < 8%
Shared services for all Sanofi Philippines
group: Sanofi-Aventis (Pharma business),
Sanofi-Pasteur (Vaccine business), &
Merial (Animal health business)
Maintain sales &
distribution expense
to sales
Percentage of sales
& distribution
expense to sales
< 33% < 33% < 33%
Customer
Offer broad product
portfolio
Number of new
products
6 4 2 Product pipeline from 2015 - 2017
Ensures availability
of products
Percentage of back-
orders (missed
orders)
99% 99% 99% Maintain healthy inventory coverage per
distributors’ warehouse
Ensures high product
quality & efficacy
Number of reported
adverse effects
0-1% 0-1% 0-1% Dedicated customer hotline using
pharmacovigilance process
High customer
engagement
Calls frequency per
month
6x 6x 6x Identify & prioritze top 15 customers from
the masterlist
Number of visit for
top customers
300 300 300 Joint field work with district manager

47. Balanced Scorecard
PERSPECTIVE OBJECTIVES MEASUREMENT
TARGET
INITIATIVES
YEAR 1 YEAR 2 YEAR 3
Internal
Process
Supply management Number of out-of-
stock products
0 0 0 Improve forecast accuracy, weekly supply
replenishment, & review minimum order
quantity (MOQ)
Government tender Number of products
under government
tender contract
3 5 5 Secure yearly government contract of
pharma products
Improve relationship
with buyers
Number of products
under drugstores’
house-branding
2 3 4 Secure yearly contract from drugstores
Launch new products On-time product
launch
100% 100% 100% Product registration timing & ensures
supply availability for pipeline
Learning and
Growth
Training &
development
program
Number of in-house
training for
employees
3 3 3 Appropriate training for employees,
availability of 1-yr training calendar, product
cascade (refresher)
Joint fieldwork
activity
Frequency of
monthly joint
fieldwork
4x 4x 4x Joint field work with district manager
On-time release of
budget and
incentives for sales
employees
Monthly credit of
sales budget and
incentives
Every
1st
Friday
of the
month
Every
1st
Friday
of the
month
Every
1st
Friday
of the
month
Timely release of sales budget and
monetary incentive, use of company issued
credit card

48. Strategy Map

49. MSD vs SAPI in Diabetes Category
June 2013
GROWTH
Dec 2014
GROWTH
Dec 2015
GROWTH
Dec 2016
GROWTH
Dec 2017
Php +000 Php +000 Php +000 Php +000 Php +000
MSD 1,016,248 5% 1,067,060 5% 1,120,413 5% 1,176,434 5% 1,235,256
SAPI 839,422 11% 931,758 11% 1,034,252 11% 1,148,020 12% 1,288,078