Management Assignment: Evolvement Of Global Pharmaceutical Industry During Pandemic
Task: Write a critical report on management assignmentdiscussing how has the “strategic customer” evolved over time for global pharmaceutical companies? What is the impact on the industry’s critical success factors?
Introduction to the theme of management assignment
With the advent of time, the very nature of the pharmaceutical industry has gone through massive changes. First of all, it was the changes in the reliance of a pharmaceutical company on its flagship brand of drugs, and very soon, the recent pandemic followed it. These factors have compelled the pharmaceutical industry to look for new ways to sustain and survive under such challenging circumstances. Gone are those times when one single blockbuster drug would be churning millions of revenues for the organization. With the changes in the patent rules and the increased use of generic medicines, such monopoly of medicinal patents has ended.
Rise of strategic customer
Previously it was mostly the doctors who would be deciding the fate of the drug by prescribing it. With the progress of time, the power of selection has moved on to the patients from the hands of the healthcare professionals. The makers of generic drugs have long captured the lion's share of the pharma market by overpowering the traditional chains of drugstores worldwide. Under such circumstances, it is essential to maintain a very strong business tie-up with the most vital customers of the industry, the strategic customers (Pilon & Hadjielias, 2017). It involves undertaking a very aggressive approach for winning and retaining such strategic customers by getting engaged in a much more collaborative manner. So, the need of the hour is to find new ways of managing strategic customers so that such products can be steadily made available across the various outlets of such a chain of stores.
For the market leaders of the pharmaceutical industry to retain growth, it is required to win a significant share of the existing market or to capture the share of that sector of the market, which is still in a developing stage. Moreover, the recent pandemic has shown the need to reshape the commercial models for the pharmaceutical industry. It is very much required to face the upcoming challenges ahead, and new-age innovations like personification and enabling digital modes are more needed to succeed in such challenging conditions. The pharmaceutical industry is now facing multiple challenges to thrive under the rise of a pandemic. It involves developing new vaccines and tests and distributing such vaccines across the globe(Milanesi et al., 2020).
As per the situation, the industry needs to provide strategic customers with innovative therapies, maintain a very modern supply chain, manufacture new types of drugs, and launch them properly(Mohammad et al., 2017). The rise of a new kind of drug termed the 'biologics' has been considered an effective tool to regain and retain the market share of the pharma industry, particularly during the pandemic. The success of biological drugs in treating chronic diseases like arthritis and cancer has given the pharma companies a new tool to make better offerings to strategic customers.
Earlier also, the product line of vaccines had been the main revenue churner for the pharma industry. Vaccines are often considered the life-long saviors against various life-threatening diseases and have a market worth billions. The recent pandemic has shown the need to develop corona vaccines. As such, the role of strategic customers has been all the more important for vaccine manufacturing pharma companies(Haslreiter-Yilmaz, 2020). The strategic customers are now being considered as the most effective channels for sales and distribution of such vaccines. Moreover, this vaccine is not a single dose one; this one will need to be applied annually. That makes the business proposition all the more profitable for both sides- the pharma companies manufacturing such vaccines and the strategic customers marketing such vaccines. The pandemic has had a negative impact on the financial results of the pharma industry. Launching new drugs often got stalled due to delays arising from new regulations or prohibitions related to the pandemic(Sharma et al., 2018). It has made the pharma industry minimize business expectations by 25 percent. The pandemic has already impacted drug launches heavily. It is evident now that significant changes are coming for the pharma industry in the way itinteracts with its strategic customers in the traditional models of drug launching. Face-to-face interaction has been reduced to a great extent, and more reliance on digital platforms for discussing and finalizing business has been shown by both sides. The pandemic has seen the modernization of strategic customers in doing business.
On the other hand, the strategic customers have also evolved a great deal from its past model. They have also understood the pressure of the situation and the need to collaborate and cooperate with the pharma industries for mutual survival and gains. The need for drugs has increased manifold during the pandemic. As the side effects of coronavirus have aggravated the comorbidity factors in patients, the need for treating other chronic diseases like diabetes or high blood pressure is also on the rise(Baumann et al., 2020). The strategic customers of the pharma industry are therefore trying to utilize the full potential of the medicine market. For this purpose, they need an equal amount of support from the pharma companies to procure the right amount of supply. Forming a new supply chain process as per the pandemic regulations has been the need of the hour, and both sides are working on it.
Impact on critical success factors of the pharma industry
Some of the most critical success factors for the pharma industry include having a proper financial strategy based on budgeting, research, and development activities to support innovation, high quality of product and service, adequate market segmentation, and a longstanding relationship with the end-users. The pandemic has influenced the pharma industry differently to succeed under such challenging situations.
One such impact is the need for the pharma industry to understand the patients' journeys better so that it ensures developing holistic medical solutions uniting devices, drugs, and diagnostics. Since the coronavirus intensifies the negative impact of other preexisting chronic diseases, early intervention is very much needed. The pharma industry has to develop the proper diagnostics and medicines(Moffat et al., 2017).
The uncertainty of the pandemic has shown that financial exercises of annual budgeting can no longer remain static during such volatile circumstances. So, now while making budgets, the factor of such uncertainty has to be considered both on the side of expenses as well as on the side of incomes as well. Different brands of drugs have been impacted differently during the pandemic, and various bottlenecks have been experienced in the operational and supply chain levels (Kashyap & Raghuvanshi, 2020).
The customer interaction process has gone through a major setback during the pandemic. The pharma industry has to go through a major change of approach in its customer interaction model under such challenging circumstances. So, the reliance on online interactions has been felt the most rather than relying on the traditional model of face-to-face interaction with customers.
It can be inferred from the above discussion that the recent pandemic has brought in significant changes in the conventional way the pharma industry has been operating till now. The role of strategic customers has become much more critical, and the volatility of the situation also had a significant impact on the traditional success factors of the pharma industry.
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