Strategy-Mankind Pharma

Mankind Pharma is a company that operates in pharmaceutical industry, which happens to be highly fragmented with the share of even the market leader being just about 5%.To make a mark in such an industry, this company did the following:

• It studied the market and found the Indian market to be extremely sensitive to prices. Therefore it concentrated on providing good quality medicines at  a low price.This helped the company make  a mark with the customers.
• Decided not to have any of its own manufacturing plants to save on capital investments and the fixed costs. It outsourced all manufacturing to the existing companies, as there was an overcapacity in the industry.It was thus able to keep its costs low.
• It followed the loose bricks strategy. Instead of fighting the established players head-on in metros and other tier 1 cities, it concentrated on selling its products in tier II and tier III cities.It was thus able to capture this market.
•  Besides paying a fixed salary to the salesmen, it paid a major amount as a variable performance incentive so that the salesmen would work their guts out to improve sales.

The company has done well till now as it was operating in anti- infective drugs, but going forward into lifestyle drugs, it may find itself on a sticky wicket, unless it decides to have its own manufacturing facilities.Those of you who are interested in reading the full article,may refer to BS dated 03 Nov 2009.