Tasly Pharmaceutical Co. Ltd Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

The report presents a case about Tasly Pharmaceutical Co. Ltd, which is involved in the research and development, manufacturing and distribution of pharmaceutical products that includes health products, herbal medicines, chemical medicines, pharmaceutical substances and APIs.

The company was incorporated in 1994 with a vision to promote healthy environment across the globe. It made continuous efforts to support innovations in scientific research and to promote self-improvements, which helped the organization in building its core competitiveness. The company was also considering to expand its operations by promoting international trade and international direct sales. Further, the company had incorporated a global marketing strategy of expanding its operations from developing countries to developed countries. In promoting this strategy, TCM helps the organization in entering into the main stream of international medical market.

Customer trends

In pharmaceutical industries, the awareness about the health and fitness issues is an essential driver in the growth of the pharmaceutical industry. The government has adopted several practices to increase the awareness in the people. Further, one of the benefits to China is that it represents the world’s largest geographical market and the government is continuously promoting improved behavior in health care, so it benefited the whole economy and individuals are incredibly moving towards herbal products due to the increasing side effects in biological products, hence, it benefited Tasly because the company offers a wide range of herbal products.

In pharmaceutical industries, customer satisfaction is particularly very important because a satisfied customer will provide repetitive sale to the company. Usually, the trusted source adopted by the customer is either obtained from doctor or pharmacist. Tasly has promoted a culture of delivering excellent quality in its pharmaceutical products, which tend them to maintain customer’s confidence. Further, the company has also initiated safety measures in their plants in order to promote safety measures and to avoid any haphazard situations that can threaten their employees. Additionally, the company also promotes not to hire the worker below the legal requirement age.

Customer’s preference over herbal products has increasingly increased over the past few years because individuals are facing additional problems of immunity, heart health, vitamins, energy and stress, so it proved to be a golden opportunity for Tasly because the company offers a wide range of herbal products and the company has already maintained the trust of customers, which will benefit the organization to achieve repeated sale.

Economic trends

China is the world’s largest pharmaceutical market and is expected to be the second largest pharmaceutical market by the end of 2020. The market has been grown by 17%, which reaches a value of $25.7 billion and accounts for 18.6% of the Asia-Pacific pharmaceutical market. The growing economic condition tends Tasly to report an increase in sales by 41.47%, 42.17% and 18.33% for 2010, 2011 and 2012 (Francesca, 2012).

Further, the expenditure on healthcare products are expected to increase by 4.7% of GDP from 6% to 7% in the next few years and it has also been expected that China will report an increase in expenditure by $705.74 by 2015. Therefore, it clearly indicates that changes in economic condition will have a favorable impact on the growth prospects of Tasly Pharmaceuticals (Francesca, 2012).

Further, demographic factors can also be considered as the most important driver of the growth in pharmaceutical market of China. The country has a policy of one child per person, so it has a negative impact on the growth perspective but the fertility rate is below than the replacement rate. China has demography of more old peoples than the young peoples and the cost of such old peoples are more than absorbed by the young peoples, so it reflects the attractiveness of the market where the pharmaceutical companies could benefit from the growing market.

The estimated drug prescription has been increased between 23% to 40% whereas an increase in OTC market has ranged between 40% to 50%. Further, an increase in demographic change is also supported by an increase in literacy rate, which tend the individuals to move towards more herbal products due to the heavy side effects of biological products; therefore, it will act as a competitive advantage for Tasly because it offers wide range of herbal products that will further increase the revenue from the growing economy of China (Francesca, 2012).

Industry trends

Pharmaceutical companies are increasingly moving towards globalization with the motive of distribution of medicines in the new emerging markets and to shift the manufacturing and R&D to low cost economies. China is the world’s largest pharmaceutical market and is expected to become second by the end of 2020 (Francesca, 2012).

Pharmaceutical industry is a growing industry and it represents an annual compound growth rate of 25.9% from 2007 to 2010 and is expected to further increase by 15.5% in 2015. It is because the environment has become more complex and individuals are having more diseases mainly, which is happening due to their diet and a lack of age in care for their health. ....................

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