Marketing of Chery Essay Example

prescription drugs in terms of development, production, and marketing.

The group's identity is based on diversity, with three major divisions: prescription drugs, family medication (OTC), and dermo-cosmetics. Despite its short history, the company has achieved steady growth by reinvesting profits into drug discovery and international expansion. Its culture prioritizes turnover development over shareholder dividends, which becomes more challenging during economic uncertainty. The company prides itself on its independence and distinguishes itself from "Big Pharma" through its corporate governance, with a significant portion of capital held by a foundation, the founder, and employees. Pierre Fabre's management style is paradoxical, combining paternalistic concern for employees' well-being with demanding expectations, particularly for managers, emphasizing attention to detail.

In addition, the company's private and independent nature has shielded it from the financial market's short-term pressures. This has provided a significant competitive advantage for its research and development efforts in the prescription drug sector. Additionally, it has enabled the successful establishment of dermo-cosmetics brands that initially experienced losses but are now profitable.

The ability to cross-subsidize business units was an essential part of being diversified. For a long time, the drug division profited from this arrangement, using the funds to expand into new markets for dermo-cosmetics brands. However, starting in the late 1990s, the situation reversed, and now the pharmaceutical business unit receives subsidies from dermo-cosmetics for drug development.

Pierre Fabre has been a leader in the beauty industry, establishing the dermo-cosmetics category. Their main distribution channels are pharmacies, giving them an edge over competitors in key European markets. This strategic choice enables Pierre Fabre to set higher prices and maintain impressive profit margins. Despite facing

tough competition from L’Oreal’s active cosmetics division, which includes popular brands such as Vichy, La Roche Posay, and Inneov, Pierre Fabre continues to hold a strong competitive position.

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Q2. Under what circumstances can a robust corporate culture turn into a detriment for a company?

The company has successfully maintained its independence, which is a crucial aspect of its values. Nevertheless, this independence does have some disadvantages when it comes to expansion. It means the company must rely on self-funding and debt, which restricts strategic choices. Moreover, Pierre Fabre has encountered obstacles in recent times due to rising drug development costs. Consequently, the company had to reassess its approach to major pharmaceutical companies and shift its attention towards finding specialized markets rather than pursuing blockbuster drugs.

Having a strong corporate culture based on established technology can make it challenging to adapt to change or develop new strategies. This is evident in companies like Olivetti, which nearly collapsed when word processors became popular, and EMI in the music industry, which faced difficulties due to the rise of mp3.

Is it possible to change the strategy of a company that has a strong culture? If yes, what are the ways to accomplish this?

To prepare for new challenges, it is important to understand the current characteristics of the company culture. Having a strong identity does not mean resisting change. Pierre Fabre has faced obstacles due to its size, origins, and competitors, which has led to diversification. However, this past experience can be utilized to tackle future challenges. Instead of emphasizing product or market portfolio narratives, managers should

focus on showcasing the company's cultivated resources and competencies in order to develop innovative strategies.

Pharmaceutical quality, scientific rigor, expertise in galenic formulation (the principles of preparing and compounding medicines to optimize their absorption), and FDA certified drug production plants are competencies and resources that can be utilized for the development and marketing of various products or for generating revenue by offering services to other industrialists.