NingGuo
HéroïneNeou
Patrick Nesme
STRATEGIC MANAGEMENT (SMIB 2011) Bruno Rakotozafy
December 2010 Antoine Rivet
CONTENT
History
PESTEL Analysis
5 Forces Analysis
Value Chain
Resources & Competences
SWOT
Strategies
Strategic recommendations
HISTORY
• Global healthcare company Net sales 2009: €29,306 million
• Six therapeutic areas Approximately 105,000 employees in 110 countries
10 blockbusters = 50% of the net sales
Dausse Sanofi+Synthélabo
Sanofi-Synthélabo
+ Robert &Carrière
Rhône Poulenc
Synthélabo +Hoechst
Aventis
1970 1973 1999 2004 TODAY
Elf Aquitaine buys the Sanofi-Synthélabo
pharmaceutical group +Aventis
Labaz and creates SANOFI AVENTIS
Sanofi
PESTEL ANALYSIS
POLITICAL ECONOMIC
•Political pressure on healthcare: •Strong impact of the economic downturn on the
- political reforms to cut healthcare reimbursement pharmaceutical market
cost
- programs to support the generics market •The huge laboratories begin to reduce the staff
•Governments have approved many new medicines •The decrease of purchasing power in the developed
in different parts of the world countries can affect the OTC market
•Increase of the demand for medical products in the
SOCIOCULTURAL emerging countries
•Increase of self-medication with OTC’s
•The ageing population results in greater TECHNOLOGICAL
demand for drugs •Increase of the R&D costs
ENVIRONMENTAL LEGAL
•Low environmental requirements in emerging •The patent of some blockbuster drugs will expire in
countries the coming years. High dependence on the
blockbusters
•Global epidemics such as Swine Flu have
boosted activities •The health industry is a highly regulated.
5 FORCES ANALYSIS (1/3)
Potential entrants Substitutes
Time-to-market: 10-12 years
Patented drugs: no threats
Heavy facilities: R&D, Prod
“Old drugs”: generics
Regulatory Affairs
World of giants 2 levels
Competitive rivalry
10 global competitors
R&D rush
M&A
Intense
Suppliers Buyers
Lots of small suppliers Hospitals + clinics
Pharma companies are giants Physicians prescriptions
Weak Important
5 FORCES ANALYSIS (2/3)
Present Situation Very High : 4
Rivalry
0
Low : 1 Medium : 2
Threat entrants Substitues
Public authorities
5 Regulatory Affairs
Governmental policies
Very High : 4
Very Low : 0 High : 3
Supplier Power Buyer Power
5 FORCES ANALYSIS (3/3)
Future Situation Very High : 4
Rivalry
0
Medium : 2 Medium : 2/3
Threat entrants Substitues
Public authorities
5 Regulatory Affairs
Governmental policies
Very High : 4
Low : 1 Average : 2
Supplier Power Buyer Power
VALUE CHAIN (1/2)
CLINICAL MARKETING &
R&D PRODUCTION
DEVELOPMENT DISTRIBUTION
Internal reorganization in the R&D
« the best R&D organization in the pharmaceutical area by 2013 »
•Entrepreneurial units more focus on patient needs
increase the number of partnerships (academy and biotech
communities)
•5 Scientific cores platforms scientific expertise
high quality service
•Functions support organize and help the new structure and the governance
VALUE CHAIN (2/2)
Clinical development 3 phases General politics
Production and raw material -Active molecule
-Most of the drugs
3 main important steps sold in the market
-the synthesis of the active molecules
- transformation of those into drugs/medicines Made internally
- packaging
Marketing and distribution
- wholesale drug distributors
- independent and chain retail drug outlets Repartition of sales representatives in 2009
- hospitals and clinics 11100
12000 7100
- managed care organizations 8000 3200 3600
- government institutions 4000
0
On the 31st of December 2009
34 300 medical sales representatives
RESOURCES AND COMPETENCES
RESOURCES COMPETENCES
•Global presence well balanced: •Ability to adapt its offerings to local market needs.
- Products sold in 170 countries Low-cost approach based on local know-how.
-Strong presence in the traditionalmarkets (Europe,
North America and Japan) •Ability to innovate and to stabilize R&D costs
-Top multinational pharmaceutical company in thanks to partnerships.
Emerging Markets - 12 R&D projects in phase 3.
- Partnerships with Wellstat (diabetes),
•Local manufacturing in Emerging markets (40 Exelixis (oncology)...
facilities and nearly 30,000 employees in the
Emerging Market countries): •Ability to manage mergers and acquisitions,
-to partly overcome protectionism partnerships and joint-venture to capture new
- to improve operating margins. market opportunities.
•Strong financial resources allowing Sanofi-Aventis •Specialized knowledge and know-how in key
to have an aggressive acquisition strategy. sectors
Ex: Diabetes (Lantus, Aprida, Amaryl, Insuman)
SWOT
STRENGTHS WEAKNESSES
•Market leader in emerging markets •High dependence on aging patent-protected
(China, India, Brazil, Mexico, Russia) blockbusters like Plavix and Lovenox
•Strong position in the diabetes care market •The patent of most of the blockbuster drugs
(19% sales increase in 2009) will expire in the coming years
•Good financial results (36% increase in Net •Low R&D productivity
Income)
OPPORTUNITIES THREATS
•Population growth and significant increase •Increasing generic competition
in purchasing power in emerging countries
•Political reforms to cut government
•The ageing population will continue to spending on healthcare
form an important source of consumers
•Problem of counterfeit medicines especially
in emerging countries
STRATEGY 1: DIVERSITFY AND DEVELOP NEW BUSINESSES
• Acquisition of firms in other sectors
Oenobiol Nutritive complements for health and beauty
• Acquisitions of R&D firms
Bipar sciences new selective antitumoral therapy
for different type of cancer
Fovea pharmaceuticals SA specialized in ophthalmology
• 30 acquisitions in 2009
Zentiva group generic products adapted in Eastern and central Europe
Laboratorios Kendrick main generic products in Mexico
Medley leader in generic products in Brazil
Takeover bid on Genzyme (18,5 billion $) leader in biotechnologies + rare illnesses
Elaboration of the their own generic products
STRATEGY 2: RESTRUCTURE THE COMPANY TO SEIZE MARKET
OPPORTUNITIES (1/2)
Reorganization in Western areas (North Am & Europe)
RECONVERSION OF
CONCENTRATION INDUSTRIAL SITES COST LOGISTIC
OF SITES AND EMPLOYEES REDUCTION IMPROVMENTS
Closure of Chemistry R&D costs + Regional
Romainville Biotech Sales force costs governance
Firing of 3000 700 people 1 billion $ saved Air maritime
people in France trained
STRATEGY 2: RESTRUCTURE THE COMPANY TO SEIZE MARKET
OPPORTUNITIES (1/2)
Focusing in emergingmarkets
ADAPTING
INCREASING SALES LOCALCOST
FACILITIES
PORTFOLIO REDUCTION
Specificdrug / 6.5 13 Bio $ In-house factories
area 30
More 15 sales force R&D centers
OTC, Vaccine staff
&generics
STRATEGY 3: INCREASE R&D EFFECTIVENESS (1/2)
Issue: blockbusters will lose their patents by 2016 generics
Solution: to find new blockbusters
How: by increasing innovation in R&D
In 2009: R&D = €4,6 bilions
15,6% of the net sales
STRATEGY 3: INCREASE R&D EFFECTIVENESS (2/2)
Clinicaldevelopment: important costs Projects in development
Reduce the costs and onlykeep the
mostpromisingproducts.
30 projectsstopped
49 projects in development
Developpartenrships
Developexternal R&D
Phase 1 Phase 2 Phase 3 Submission Total
Central nervous system 2 3 1 0 6
Internal medicine 2 2 0 0 4
Vaccines 4 7 4 3 18
Oncology 6 0 4 1 11
Ophtalmology 1 1 0 0 2
Cardiovascular diseases 0 1 1 0 2
Thrombosis 0 0 2 0 2
Metabolic disease 2 1 1 0 4
Total 17 15 13 4 49
STRATEGIC RECOMMENDATIONS
1. Enhance its presence in the biotechnology field (plants, staff and R&D)
2. Develop a new business model(patient is the central element, customized
medicine with a large portfolio of specialized products, more services for
patients...)
3. Promote innovation: multiply partnerships with small and innovative entities?
strengthen links with academic laboratories, seek new technologies (nanotech,
drug-food, medical devices, diagnosis...)
4. Develop a more flexible organization: create a network with outsourced
units (productions or sales), production "on demand”...
5. Expand into new geographic areas: enhance local presence (factories, local
workforce), develop region-specific drugs, enter into partnership with
governments and local companies.
SOURCES
Sanofi Aventis Official website, www.sanofi-aventis.com
Sanofi Aventis, Rapport annuel 2009
Sanofi Aventis, Document de référence 2009
Pharmaceutical Case Study - Sanofi-Aventis, Agility
Global Pharmaceutical: emerging markets should infuse badly
needed revenue for years to come, Bernstein Research, 2009
Les groupes pharmaceutiques dans le monde, Xerfi Global,
Alexandre Boulegue etVirginie Dessolin, 2009
Sanofi-Aventis, XerfiEntreprises, 2010
Six Sigma and the road to success, Dr IngolfStückrath, World
Pharmaceutical Frontiers
Industry Audit, Bill Tombetta, Pharmaceutical Executives, 2009
