The pharmaceutical industry is all about discovering, developing, producing and marketing of the drugs and medicines. These medicines are used for the medication and treatment purposes to patients. The aim of it to cure the disease or alleviate the symptoms. Pharmaceutical companies deal in brand medication or generic and medical instruments. The companies are subjected to different laws and policies which govern patenting, safety, testing, and marketing of medicines (Dailey, 2020).
The Ansoff matrix is used by the companies as a corporate growth strategy tool. The matrix helps the company in focusing the potential and present markets and products. There are four possible growth strategy with combination of product and markets. Market penetration, product development, market development and diversification. Here is the detailed Ansoff matrix of Pharmaceutical industry.
Market Penetration
Market Penetration is an important strategy for growth. It is all about selling more of the existing product in the existing market. To grow and penetrate deeply in the market, the companies can cut prices, invest more in the marketing, improve the distribution network, and increase production capacity. The market penetration strategy for pharmaceutical companies is all about increasing the sales of drugs in existing market segment. The companies can change to OTC category from Rx. The companies can implement these strategies who are approved for selling drugs in non-pharmacy sales, petrol stations and shops. Like, Panadol produced and sell by Glaxo Smith Kline. Drugs are widely available and consumers can purchase it without doctor’s prescription. Companies like Sanofi Aventis, Pfizer etc., can penetrate in public sector to reach lower income class to increase consumers. They can participate in different government programs (Gozlinski, 2020).
Product Development
Product Development is all about selling and developing new products for the existing market. The companies can introduce different versions of the existing products or introduce new product for the consumers. This can increase the value among consumers for the purchase. And it will also increase the product portfolio of the company. The pharmaceutical industry use various ways for this strategy. They can increase the quality control on drugs while maintaining the existing properties of the drugs. The companies can add new properties with new additives, for increasing the active substance in medicines. For example medicated sanitary pads with different versions max, strong, thick, thin, day etc. The companies use different shapes and forms, like syrup for infants and children, capsules, tablets etc. Pharmaceutical companies can also improve aesthetics of medicines by changings its visual identity (Gozlinski, 2020).
Market Development
Market Development in the Ansoff matrix deals with selling the company’s existing products to the new markets. The strategy encourages the company to reach out to new consumers and market segments to expand. It can be local markets or international platforms. If the company’s products is doing great in one market, then try another market. This is what Abbott did with its product Ensure. The company expand it in international markets. Pharmaceutical companies can use polish pharmaceutical markets for this strategy. Indirect or direct exports to other polish markets like Merck. Moreover, big pharmaceutical companies like Abbott, Sanofi, etc can set their production facilities in other geographical areas. The big companies can takeover or merge with small companies like GSK took over Polfa Poznan. The companies can also modify products like GSK did with Panadol normal, Panadol advance etc. and reach to new consumers. (Lidstone, and MacLennan, 2017).
Diversification
The diversification strategy deals with the new product introduced in new markets. This depend on the research capabilities and R&D of the company. The pharmaceutical companies bring new product for the new market by the introduction of new formulations. Mostly pharmaceutical companies are involved in vertical diversification. It mainly occurs in commercial sector, wholesale integration of the detail pharmacies. Companies like Sanofi diversify itself in the therapeutic segment respiratory medicines or Abbott started to sell Pediasure for infants. (Lidstone, and MacLennan, 2017). The pharmaceutical industry can also diversify themselves in manufacturing medical devices, surgical instruments or other medical equipment.
References
Dailey, J. 2020. Pharmaceutical industry. [Online], Available at: https://www.britannica.com/technology/pharmaceutical-industry, [Accessed on: 16th January, 2020].
Gozlinski, D. 2020. Marketing strategies of Pharmaceutical industry. [Online], Available at: https://dariuszgozlinski.pl/en/strategie-marketingowe-na-rynku-farmaceutycznym/, [Accessed on: 16th January, 2020].
Lidstone, J. and MacLennan, J., 2017. Marketing planning for the pharmaceutical industry. Routledge.