Market Background and the Client
Following the COVID-19 pandemic, the healthcare industry, particularly the pharma industry, has undergone significant transformation due to technological advancements and shifting consumer expectations. This has intensified competition in the pharmaceutical industry, with new entrants challenging established companies. A leading pharmaceutical firm based in Western Europe approached faced declining profitability.
The Business Challenge – Low Profit and Slow Technology Adoption
The client faced declining profitability because of its slow adoption of new technologies and inability to keep up with market changes. To regain the pace with market leaders, the company partnered with SpendEdge for expert guidance on pharmaceutical competitive intelligence and competitor best practices.
What are Competitor Best Practices and Why are they Necessary in the Pharma Industry?
The pharmaceutical industry, known for its high barriers to entry, market fluctuations, and evolving consumer demands, requires companies to outpace competitors through competitive intelligence, data analytics, and innovative practices like strategic procurement, automation, and digitization. These strategies provide market insights, improve decision-making, and offer a competitive edge. The COVID-19 pandemic and rapid digitization have further underscored the need for these best practices.
Key best practices include benchmarking, data-driven decision-making, strategic procurement, automation, and digitization. Adhering to regulatory standards ensures safety and compliance, while R&D investments drive innovation. Patient-centric approaches improve treatment outcomes, and partnerships enhance market value and reach. These practices are essential for maintaining competitiveness and meeting consumer expectations in a dynamic industry.
What are the Key Competitor Best Practices?
Strategies for Cost Optimization
Assess a range of qualities:
Evaluate factors like costs, pricing, quality, delivery times, supplier relationships, customer satisfaction, and profitability for comprehensive competitor comparison. A holistic assessment prevents skewed decisions
Focus on tangible differentiators:
Emphasize clear, actionable insights from tangible factors like pricing, costs, product quality, and customer satisfaction, rather than subjective qualities
Conduct a thorough analysis:
Assess external factors such as geographical locations, supplier placements, marketing efforts, market share, and adaptation strategies, along with competitors' resources, capability gaps, assets, equipment, and sales tactics for comprehensive business insights
Establish a wide range:
Include all potential competitors, not just industry leaders, to ensure accurate data and maximize improvement opportunities. Consider companies in similar positions, new entrants, and small expanding firms
Implement changes:
Use competitor analysis to drive necessary adjustments and improvements. Compare offerings, delivery periods, quality, and other factors to achieve higher success and stay competitive
Methodology Adopted to Address the Challenge – Competitive Intelligence
To cater to the specific requirements of the client, sourcing and procurement experts at SpendEdge followed a comprehensive research methodology. This included primary and secondary research as well as qualitative and quantitative data collection. The analysts at SpendEdge conducted a rigorous assessment of the clients’ competitors. They identified the advanced technologies, marketing strategies, and digital solutions adopted by competitors.
Solutions Offered
SpendEdge advised the client to adopt the following strategic procurement strategies, automation, and digitization process:
- The company can enhance its operations and stay competitive by adopting several strategic procurement, automation, and digitization measures. In terms of strategic procurement, it can diversify its supplier base to mitigate risks from supply chain disruptions and implement robust contract management systems to ensure compliance and track performance
- Utilizing spend analysis tools can help identify cost-saving opportunities and streamline procurement processes. Sustainable sourcing should be prioritized to enhance corporate social responsibility, and collaborative sourcing through joint ventures and partnerships can leverage shared expertise and resources
- For automation, robotic process automation (RPA) can be used to handle repetitive tasks such as order processing, invoicing, and inventory management, reducing errors and increasing efficiency. Automated procurement workflows can streamline the procurement cycle, while smart warehousing with automated storage and retrieval systems (AS/RS) and autonomous guided vehicles (AGVs) can optimize warehouse operations. Predictive maintenance, using IoT sensors and data analytics, can schedule maintenance proactively, minimizing downtime. Automated compliance monitoring software can ensure adherence to industry standards and reduce the risk of non-compliance
- Digitization measures include adopting eProcurement platforms to facilitate electronic sourcing, bidding, and contract management, enhancing transparency and efficiency. Leveraging advanced data analytics can provide insights into procurement trends, supplier performance, and market conditions, enabling informed decision-making. Implementing blockchain technology can offer secure and transparent tracking of the entire supply chain, enhancing traceability and reducing fraud. Digital twin technology can create virtual replicas of physical assets and processes for real-time monitoring and optimization. Transitioning to cloud-based procurement and supply chain management systems can improve accessibility, scalability, and collaboration across the organization. These measures collectively help in improving procurement processes, enhance operational efficiency, and maintain a competitive edge in the market
Benefits Achieved
The adoption of strategic procurement, automation, and digitization measures led to significant improvements in sales, product portfolio management, and customer satisfaction. For example, automation and digitization have streamlined operations, reducing labor costs and errors, while strategic procurement has optimized supplier relationships and contract management, leading to better pricing and more favorable terms. Overall, these measures enhanced operational efficiency, increased profitability, and strengthened the company’s competitive position in the market.
