Marketing of Chery Essay

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From small town pharmacy to a multinational corporation: Pierre Fabre, culture as a competitive advantage

The case deals with the development of a pharmaceutical and dermo-cosmetics company owned and controlled by its founder, Pierre Fabre. The company (Pierre Fabre Laboratories) has made extensive use of its culture to build competitive advantage. The company history pervades its strategic choices (selective distribution through pharmacists, manufacturing and R&D localisation), its choice of product development path (natural substances), organisational capabilities building (innovation) and management style (‘humanistic’). The company’s name is not well known to the general public except in the south
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* Through its relatively short history, the company has taken bold challenges and developed steadily by reinvesting profits into drug discovery and international expansion. Its culture has been more oriented to develop turnover than pay dividends to shareholders. In times of economic duress, this is more difficult to sustain. * The company is proud of its independence and insists on being different from “Big Pharma” through its corporate governance with a large portion of its capital in the hands of a foundation, the founder and the employees. * Pierre Fabre’s management style is somehow paradoxical, at times paternalistic, concerned with employees’ well being and at times demanding, especially for managers, with a focus on detail.

Further, being private and independent, the company does not suffer from the short-term pressure of the financial markets. It has been a true competitive advantage in terms of its R&D effort in the prescription drug business. It has also permitted the creation of a set of – now profitable – dermo-cosmetics brands that suffered from losses during their early years.

Being diversified meant also being able to cross-subsidise business units, and for years the drug division benefited from profits which were invested in the development of new markets by dermo-cosmetics brands. Since the late 1990s, the flow has
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