Case Study 4e1it

BUSINESS MANAGEMENT CASE STUDY B-PHARMA SECTION A With reference to B-Pharma, describe two ways in which Corporate Social Responsibility could be important. When carried out experiments on animals and some of them being painfully killed, B- Pharma found themselves in the centre of controversy reported by media outlets around the globe. By this the firm almost lost their reputation. Although, there could be some ways such as Corporate Social Responsibility by which B- Pharma could do some benefit for the society. In this case, B- Pharma should get all the chemicals tested before experimenting on animals. CSR for companies like B- pharma could be done because drugs and medicines business which requires pretesting on animals and human beings before being launched in the market. Therefore, in order to maintain their reputation and growth in business, it is necessary that the company has to abide by the ethical and legal norms Company can think off substituting animals with computed aided programmes to test their drugs before they are launched. This will be a very innovative feature in of Corporate Social Responsibility. However, company cannot reply on this method alone but definitely the reliance on testing on animals and human beings could be reduced. Apply the Boston Consulting Group (BCG) matrix to B-Pharma’s product portfolio.

Market Growth Y- axis Market share Cash Cow

Stars

High - Pharmax

Pharmaflo

Dogs

Problem Child

Low - none

Phamatics and pharmaslip

Cash Cow - Pharmax This is an important drug of the company which is still giving revenue. However, because it has reached saturation point therefore the chances of growth are limited. Stars - Pharmaflo Pharmaflo is doing very well in the market. The drug is growing rapidly in the market therefore only investment of ment is required so that the drug can maintain its peak position. Problem Child - Pharmatics and Pharmaslip Pharma slim is young brand of the company and can do well in the market if aggressive selling strategy is adopted. In this age when to become slim is gaining momentum worldwide. Therefore, the management should nurture this brand very carefully and consistently so that one day it may find place in the “stars” category of BCG Matrix. Likewise, Pharmatics is also a new drug of the company which has shown satisfactory results initially. This drug can bring good revenue to the company in future because it is linked to the cosmetic industry and therefore, this drug also requires careful and consistent monitoring.

Both “pharmaslip” and “ pharmatix” are relatively young brands which hold tremendous potential to increase market share of the company. However, the company has to aggressively the drugs and keep the prices competitive so that in future both drugs can earn handsome revenue and move to “stars” category of BCG Matrix. With reference to B-Pharma, outline two key features of operating as a public limited company. As B- Pharma is a public limited company, it can raise larger share capital from public. Since it can sell its share to the public and anyone is able to invest their money, the capital therefore can be raised much higher as compared to the Private Limited Company. Growth and Expansion Opportunities - Once the finance is raised, by having more finance the firm is potentially available in a better position/ that the Private Limited Company. The Public Limited Company has an advantage to pursue new projects, new markets as they decided to grow and expand within the Pacific Rim. Due to this, B-Pharma was able to open other smaller subsidiaries in other countries such as Canada, Chile, Mexico, New Zealand, South Korea and Vietnam.

Explain the importance of branding for B- Pharma. Branding is a very important factor for firms to keep in mind. A good branding increases the value of the company, provides motivation to the employees and eventually increases their morale. Talking about BPharma, the firm has well established brand name that has been maintained by aggressive advertising in specialist magazines. B-Pharma’s logo is present in all its products, its family branding has attracted considerable brand loyalty Market research shows that most adults across East Asia recognize B-Pharma labels and regard them as a mark of quality and safety. B-Pharma drugs are trusted but are expensive. As B- Pharma has already established their brand, it is easy for the firm to gain more

market share. Moreover, in this highly competing global market, it is crucial to stand out from the crowd. B- pharma’s brand name will therefore will help the firm stand out from the thousands or millions of similar organizations around the world. In addition to this B- Pharma has its subsidiaries in many parts of the world, therefore, its important for BPharma to have a good brand where customers are loyal which will eventually create a good will of the firm. Describe two benefits for B-Pharma of a cost-plus (mark-up) pricing strategy for its drugs. B-pharma fixes the price of the medicine by keeping in mind the price of substitute medicines of the competitors in the market share, So that, it should not lose its market share. When B- pharma fixes its product price it keeps in mind the cost of production and the cost of Research and Development on the medicine so that it can fix the price by adding normal profits so that company can earn profit. Analyse the effectiveness of Susan James’ leadership style at the Canadian subsidiary of B-Pharma Susan James used the autocratic leadership style in which she has all the problem in her own hands. She was not ready to delegate the power to the subordinates. She wanted superior subordinate relationship to be clear because she knows that due to autocratic leadership there are many employees who will oppose to this policy and will be demotivated but to correct this problem she implemented performance related pay which meant if a person works efficiently he/she will get more pay. By this leadership style firm will benefit in of better working environment and there will be no confusion among the relationship between superior and subordinate. Every employee has been given a

proper task to be performed within fixed timeframe which will lead to no delays.