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Salix Pharmaceuticals Is A SIGNIFICANT Speciality Pharmaceutical Company Marketing Essay

Salix Pharmaceuticals is a major speciality pharmaceutical company which specialises in gastroenterology treatments. They are really committed to developing, licensing and marketing products that are innovative in character and treat gastroenterology problems. The mission of the business is to provide patients around the globe with effective alternatives in the concerned field of gastroenterology ("Salix Pharmaceuticals Company, n. d"). Some of the popular products of the business are ASPIRO, OSMOPREP, MOVIPREP, XIFAXAN & METOZOLV. They market these products to all or any major US health care providers.

Salix Pharmaceuticals have historically centered on a technique of market adaptation and almost all their drug acquisitions have been around in a late level of development in order to minimise their risk. The question the business faces right now is to decide the future strategy of diversification and produce scenario building in order to decide their concentrate for the future. AN ALTERNATIVE SOLUTION for the same is either to stay focused on niche market of gastroenterology and attain a command position or to diversify like other pharmaceuticals. If they decide to diversify, they risk losing the niche market and sales team focus. If indeed they don't they risk working in a saturated market and could achieve no or stagnant progress.

The situation is very grim for Salix Pharmaceuticals because they are at a crucial juncture where they have to decide whether to remain as an extremely strong area of interest player or start concentrating on different zones. This will likely decide the marketplace for the company in the foreseeable future and if they need to adjust to adapt to the problem of other key players.

Key Issues

Slowly but continuously Salix Incorporation has turned into a major player in gastroenterology, should they try to endeavor in other key areas of medicine or should they still concentrate on niche they focus on. The question is very critical because this will decide the near future strategy of Salix Pharmaceuticals and will pave the way for the company.

It face issues of the growing company. They have four FDA approved product and amount of these are in pipelines also.

Should they change their motto of search and development to Traditional R&D? In case there is traditional R&D their capital expenses will increase substantially, but if they don't start traditional R&D will they in a position to acquire as they are doing.

They are a set of targeted players in US market and have not ventured much into foreign market. What should be there technique to enter a new market or as long as they ever enter a global market.

Situational Analysis

The situation is very grim for Salix Pharmaceuticals because they are at a critical juncture where they have to decide whether to remain as an extremely strong niche market player or start concentrating on different zones. This will likely decide the marketplace for the company in the foreseeable future and if they need to adapt to the situation of other key players. Salix Pharmaceuticals have historically focused on a strategy of niche market adaptation and almost all their drug acquisitions have been around in late level of development in order to minimise their risk. The question the company faces right now could be to decide the future strategy of diversification and come up with scenario building so that they can decide their concentrate for the future. Alternative for the same is either to stay focused on niche market of gastroenterology and attain command position or to diversify like other pharmaceuticals. If they opt to diversify they associated risk losing the niche market and sales force focus. If indeed they don't they associated risk working in a saturated market and may achieve no or stagnant development.

The key strategy implemented by Salix pharmaceuticals is to modify the drug which is commercially viable at an extremely late level in the whole process so that risk of failure is reduced. There primary competency is within marketing the product and therefore they concentrate on acquiring drugs at an extremely late stage of commercialisation and then market them with their very reliable sales force.

Acquisition of medication as of this critical level helps the company reduce their risk to a very low level. For this the necessity is good scouting team along with great marketing ability in the segment so that appropriate is created between the company and the product itself.

Some of the critical things Salix need to consider before deciding after their future goes are

They have just migrated into positive net earnings in 2004.

Will move in strategy business lead to move in primary competency and will that be beneficial

Gastroenterology market and its own future.

Sustainability of the competitive advantage

Replication by competition

Directional strategies

The directional strategies are performed by the company to improve its position and enhance its reach and capacity to serve maximum quantity of patients begins with the defining of its objective statement eye-sight and goals.

Mission

Salix is focused on being the main U. S. niche pharmaceutical company licensing, developing and marketing ground breaking products to healthcare professionals to avoid or treat gastrointestinal disorders in patients while providing rewarding opportunities for our employees and creating exceptional value for our stockholders. ("Mission& Company Strategy, 2010").

Value Statements

Some of the key value assertions for the company are commitment to well-being and health of these being served expectation, to achieve the highest degree of superiority, understanding the essential importance of advocacy for those being served, imbibing creativeness and innovation, knowing the importance of dealing with the patients and the community and determination towards providing advanced education to health professionals.

External Environment

The exterior environment for any organisation influences the decision making for the company to a very large extent. External environment includes macro factors, existence of competitive products, federal support, industry performance, external support available etc. This section is a very small but very lively and critical unit of medical care system across the world. In 2008 around 15200 speciality gastroenterologists across USA, conducted about 29. 6 million appointments to the patients and the prescription were appreciated at $7. 0 billion. Salix Inc is a key player in this market leveraging its strong circulation network and marketing functionality.

Salix is a marketing targeted organisation which utilizes direct sales drive such that it can promote its product to the highest prescribing gastroenterologist who are on the list of fastest adopting drive in america healthcare industry. There may be huge price variance in USA one of the branded drug and the common version of the same.

The Global Pharmaceutical market was around USD 773 billion in 2008. The biggest player in the market USA contributes almost half the value (45%) with Europe following next (24%) and Japan (11%). China contributes 2% and Indian contribution is 1. 8% ("U. S. healthcare, n. d").

The different exterior changes can be viewed under the next heads:

Legislative/Political Changes

Economic Changes

Social/ Demographic Changes

Technological Changes

Competitive Changes

In the next pages I am going to discuss all the problems in details so that people can an in depth perspective to make decision for Salix Pharmaceuticals.

Legislative/ Political Changes

America acquired a $2. 2 trillion each year medical cover the populace but majorly from it was wasteful as it is financed in an extremely bad way. The question always continued to be whether America will be able to sustain such a means of financing rising healthcare costs. In 2007 Healthy America Act was launched by the George Bush authorities. The function required individuals to obtain a private health insurance pools and eliminate company sponsored insurance premiums. The act didn't go in the assembly but it certainly created a furore in the Health care industry. If we consider the perspective of Salix Inc, the take action would have certainly impacted the company all together ("U. S. healthcare, " 2009).

Economic Changes

Today there is certainly huge pressure on big pharmaceutical companies. You will find many reasons that can be ascribed to this. The most important of them are:-Drugs worthwhile USD 47 billion are receiving off patent in the next three years; there have been increased penetration of generics in marketplaces where historically innovators have been strong, There is drastic decrease in drug approvals from USFDA and above all of the have resulted in huge increase in medication development cost.

Cost decrease initiatives planned by big Pharma companies:

Global Pharma innovators, who already are under great pressure to protect their success, have further strengthened their give attention to cost rationalization activities(like - lay-offs and turn off facilities etc) in order to handle with the recent tight financial situation. This might further raise the earning potential for low-cost CRAMS vacation spots like India and China.

Technological Changes

The technology has altered leap frog for the last 10 years in medical care industry across the world and pioneer have been USA. The restoration period for the patients has reduced noticeably due to better medical infrastructures and better technology to utilise it to the full amount. Surgeries are become quite definitely automated nowadays with proper diligence on every step. It has been only possible because of the growing Research & development in the field. Salix Inc's product is one of scientific leap frog on the market. It will create this easier environment for the reason that visible surgery room. The need is to get the product in the right hand at the initiation before rival barge with another product of the similar or better kind. These technologies need to be utilised. The objective should be to support their competitive benefits in the niche market which they focus on.

GENERICS

A Generic Medication is a backup this is the same as a brand name drug in medication dosage, safety, durability, how it is used, quality, performance and intended use

The use of universal drugs is now widely accepted and they're commonly approved by physicians and dispensed at hospitals

The universal drugs are less expensive as compared to branded drugs as universal manufacturers do not have the investment costs of the creator of a new drug.

Internal Environment SWOT

Strengths:

Pool of talented and compassionate staff members who choose to just work at Salix Inc and thought in its mission and enjoyed portion those in need.

Strength in marketing key products in specific market

Talented partnership model outside USA

A quite strong distribution channel

Advantages of Niche market no major cost.

A very good scouting team which hunts for medicine in overdue development stage and acquire it.

Weakness:

Market saturation for gastroenterology

Majority of capital was funded and net income has just converted positive in 2004. With this low operating income, operations may become unsustainable in future

Resources aren't adequately utilized

Inadequate infrastructure to manage the growing demand outside US

Opportunities:

Managed health care was dominated form of insurance in US and enrollment was expected to increase

Change in the US health care system. Managed health care was changing how healthcare providers interacted with patients, financing for care was being restricted and many healthcare system were using non physician providers to trim cost. This threw plethora of opportunities before CGS.

New segments other than gastroenterology to cater to.

Threats:

Stiff competition in the health care segment

Technological improvements along with insufficient capital

Inability to cope up with competition in the light of scientific improvements which made prognosis of multiple problems possible and insufficient capital.

Dependency on Solitary niche section for any sort of earnings stream. No alternate sources of revenue are available.

Growth Drivers

Biggest growth individuals in generic market is the value of patent expiry that is taking place in the global market. Within the figures given below we can easily see the worthiness of patent expiry that will need place in US and Euro Market. With such patent expiring in developed countries universal drugs are establish to be earnings churners for the companies foraying in it.

Salix is a marketing concentrated organisation which utilizes direct sales drive such that it can promote its product to the best prescribing gastroenterologist who are on the list of fastest adopting push in america healthcare industry. There may be huge price deviation in USA on the list of branded drug and the general version of the same.

Salix Inc was never into immediate consumer marketing and products. They always presumed in marketing the merchandise to the prescriber because they are the decision manufacturers in every such situation. Salix Inc has generated a direct sales team which helps in promotion of the product to the best prescribing medical doctors in the U. S for the treating gastrointestinal diseases players ("Salix Pharmaceuticals Company, "). This sales force helps the business in capitalizing on the chance which creates a franchisee model for the gastrointestinal community all together. It helps Salix attain higher profit margin and it can help Salix in having a primary command above the distribution route.

The situation is very grim for Salix Pharmaceuticals because they're at a critical juncture where they need to decide whether to stay as a very strong specific niche market player or start concentrating on different zones. This can decide the marketplace for the company in the foreseeable future and whether they need to adjust to adapt to the problem of other key players ("Salix Pharmaceuticals Company, "). Salix Pharmaceuticals have historically centered on a technique of market adaptation and almost all their drug acquisitions have been around in late stage of development so that they can minimise their risk. The question the company facing right now is to decide the future strategy of diversification and come up with scenario building in order to decide their emphasis for future years. Alternative for the same is either to stay focused on market of gastroenterology and attain leadership position or even to diversify like other pharmaceuticals. If they decide to diversify they risk losing the niche market and sales team focus. If they don't they risk employed in a saturated market and could achieve no or stagnant progress.

Strategy Formulation

The Main concentrate on Salix Pharmaceutical is on search and development. The target is to identify and acquire something which is overdue developmental stage which is concentrating on treatment of gastrointestinal diseases. This target helps in risk reduction and also helps Salix to reduce time and development cost for new Research & development. It is a great opportunity when compared to products that happen to be in early stage of innovations ("Salix Pharmaceuticals Company, "). The important work here is to pay the right price for the acquisition and good negotiation skills among the most notable management.

Operations that happen to be capital extensive and are low margins are outsourced. The target of Salix is on maximizing the commercial probable of the main element products. A number of the operations like processing are largely outsourced. The main element resources of the business are not tied up in "Offline" but are properly committed to key pursuits like increasing product sales.

Salix Inc has created a direct sales team which helps in promotion of the merchandise to the highest prescribing physicians in the U. S for the treatment of gastrointestinal diseases. This sales team helps the organization in capitalizing on the ability which creates a franchisee model for the gastrointestinal community all together. It helps Salix attain higher profit margin and it helps Salix in having a primary command above the distribution channel.

Salix Intends to expand with the addition of new product with their already developed collection in the topic section of gastroenterology. Services will be added to the profile by these methods:

Acquiring services with in-licensing

Promote some of the third get together products

Expanding the existing signs of the available products

The largest pharmaceutical market in the world is U. S. Salix Incorporation trading markets its product in this concentrated market. Salix intends to form strategic alliances across the distribution channel so that it can reach the end customer easier in that huge market. In addition, it intends to get into joint venture outside USA such that it can keep your charges down, infrastructure needs, risks and it allows these to inherent a strong international sales team.

Reasons for Outsourcing

Focus on central competency like R&D and marketing and insufficient capacity at its end

This has resulted in outsourcing of non-core pursuits like manufacture of intermediates and APIs from low priced destinations

Innovator companies in developed countries are under tremendous pressure off their respective governments to lessen the prices of drugs.

The key strategy implemented by Salix pharmaceuticals is to adapt the drug which is commercially viable at a very late stage in the complete process so that threat of failure is minimized. There core competency is within marketing the product and therefore they concentrate on acquiring drugs at an extremely late level of commercialisation and then market them with their very productive sales force.

Acquisition of medicine at this critical stage helps the company reduce their risk to a very low level. For this the necessity is good scouting team along with great marketing capability in the segment so that appropriate is established between your company and the merchandise itself.

Promotional Strategy

The primary effort of the marketing and sales team was to put there concentrated work on gastroenterologists who will be the ones that can prescribe the drug to the patient. They created a universe of 68 sales staff which they believed can cover the whole universe of gastroenterologist in USA. The very best of the gastroenterologist were went to by Salix sales representative weekly and the lower deciles of doctors were visited once or twice a month. A number of the regular top features of sales team are complete below-

Regular visit by the agent to the prescribing gastroenterologist. It helps to keep the medical facilities across USA updated about the properties of the merchandise.

Lectures and Workshops were conducted to generate consciousness about the option of the option

Salix pressed in advertisement the benefits of the product.

Purchasing various advert slots in technological magazines which focused on gastroenterologist

Sponsoring studies which focus on off-label use of the product

Salix Inc was never into immediate consumer marketing and stuff. They always presumed in marketing the merchandise to the prescriber because they're the decision creators in every such scenario. Salix Inc has created a direct sales team which assists with promotion of the product to the highest prescribing medical professionals in the U. S for the treatment of gastrointestinal diseases. This sales team helps the organization in taking advantage of the ability which creates a franchisee model for the gastrointestinal community all together. It helps Salix attain higher profit margin and it can help Salix in having a primary command on the distribution channel.

Strategic alternatives

Manufacturing Strategy: THE BUSINESS needs to alter its radical sourcing insurance plan for Certain parts. It is because developing a standard product by local manufacturers is not possible generally. Insufficient proper training will lead to design defaults in elevators.

Customization: Another major tactical alternative for the company is to construct custom-made products. As in the event, twice company acquired the orders of your non-standard product, that was not the part of their plan.

Regional Strategy: The program built by Salix was in line with the international strategy & Firm goal of the company.

Strategic recommendations

Salix have been unsuccessful in employing the business plan he made sitting at the head office. It is because he relied much on the industry research of USA. The business tried to put into practice Red Sea Strategy, by competing in the existing market and concentrating on existing customers ("About Blue Ocean, "). He should have rather used a Blue Ocean Strategy while stepping into in the Regional or new market space. This might have given Salix the advantage of creating an uncontested market space for itself by causing the competition irrelevant. The complete system of company's activities should be aligned to build differentiation at an inexpensive. The first step towards creating differentiation is customization of products. This will help the business reduce significant costs for future, and also save them with the price pressures of transfer costs ("About Blue Ocean, "). They need to create a fresh demand by offering differentiated products more advanced than its challengers. These strategies can help the company gain a substantial market share in coming years.

The Main concentrate on Salix Pharmaceutical is on search and development. The objective is to recognize and acquire a product which is overdue developmental stage and is concentrating on treatment of gastrointestinal diseases. This target assists with risk decrease and also helps Salix to reduce time and development cost for new Research & development (Burke, truck Stel & Thurik, 2010). It is a great opportunity when compared to products which are in early level of developments. The key work here's to pay the right price for the acquisition and good negotiation skills among the very best management.

Salix Inc was never into immediate consumer marketing and products. They always believed in marketing the merchandise to the prescriber because they're the decision designers in all such situation. Salix Inc has generated a direct sales team which helps in promotion of the product to the best prescribing health professionals in the U. S for the treating gastrointestinal diseases. This sales force helps the business in taking advantage of the opportunity which creates a franchisee model for the gastrointestinal community all together. It helps Salix attain higher profit margin and it helps Salix in having a primary command above the distribution channel.

Salix Inc has generated a direct sales force which helps in promotion of the product to the best prescribing medical doctors in the U. S for the treating gastrointestinal diseases. This sales team helps the organization in capitalizing on the chance which creates a franchisee model for the gastrointestinal community as a whole. It helps Salix attain higher profit margin and it can help Salix in having a direct command in the distribution channel.

Financial Analysis: Stand 1

 

2001

2002

2003

2004

Accounts Receivables

2378

5980

3598

10457

Inventory

6274

10210

16094

25656

Product Revenue

22350

33456

55807

101697

Gross Profit

18855

25264

42581

83742

Gross earnings Margin

84. 36%

75. 51%

76. 30%

82. 34%

Net Income

-17498

-24472

-20101

6985

Implementation

Salix Inc should carefully choose on the list of available partners which creates best of synergy for both firms. It is stated for both the firms just because a solitary beneficiary in a partnership cannot be suffered for long. The necessity is to make a host with the spouse and leverage the option of a strong sales team. The promotional mixture should be designed keeping in mind the introduction stage. The business should utilise the first movers' advantage and produce a maximum reach in minimum time possible. The reason behind the aforementioned is to produce the maximum possible impact on the target audience.

Benchmark for Success

Benchmark for company ought to be the achievable sales target they initially designed to. If the business can perform those sales statistics without compromising its situation in the market place it would do enough to be called successful.

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