Sanofi Aventis

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STRATEGIC MANAGEMENT
TABLE OF CONTENTS
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Letter of Authorization
Institute of Business Management

Korangi Creek, Karachi-75190, Pakistan
UAN (9221)111-002-004, Fax: (9221) 509-0968
Http://www.iobm.edu.pk
November 6, 2016
Dear Reader,
This report was authorized to us by the Lecturer of Strategic Management, Mr. Javaid Ahmed.
The findings of the report were to analyze the working of Sanofi-Aventis Pakistan.
Sincerely yours,
Muhammad Talal Ansari 7648
Yusra Ansari
8593
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Letter of Acknowledgement

UAN (9221)111-002-004, Fax: (9221) 509-0968
November 6, 2016
Dear Reader,
It was a learning experience for us to carry out our term project on The internal and external
structure of Sanofi-Aventis which was assigned to us by our respected teacher Mr. Javaid
Ahmed. We would like to thank you for providing the guidance and the skills that helped us in
preparing the report.
It was an educational experience to carry out such a term project on a topic so informative and
practical, and which also plays an integral role in the formulation of strategies .
Sincerely yours,
Muhammad Talal Ansari 7648
Yusra Ansari
8593
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Letter of Transmittal

UAN (9221)111-002-004, Fax: (9221) 509-0968
11 April, 2011
Mr. Javaid Ahmed,
Department Head of Management,
Karachi.
Respected Sir,
This research reports topic was to analyze the working of Sanofi-Aventis Pakistan, the reports
consists of a detailed analysis of the internal and external structure of the company.
If you have any queries or doubts about the compilation of this report you may feel free
to contact any us at the email addresses below.
Sincerely,
Muhammad Talal Ansari (std_7648@iobm.edu.pk)
Yusra Ansari (std_8593@iobm.edu.pk)
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Executive Summary
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LITERATURE REVIEW
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STRATEGY - WHAT IS STRATEGY

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:
"Strategy is the direction and scope of an organization over the long-term: which achieves
advantage for the organization through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfill stakeholder expectations".
The strategic management process has 3 main components shown below.
Strategic Analysis:
Strategic analysis is analyzing the strengths of the business. It includes the analysis of the
internal environment and the external environment. These forces influence the position of the
company, in the industry in which it operates. The process of Strategic Analysis can be assisted
by a number of tools, including:
PEST Analysis - a technique for understanding the "environment" in which a business operates1
Five Forces Analysis - a technique for identifying the forces which affect the level of
competition in an industry
1 http://www.tutor2u.net/business/strategy/what_is_strategy.htm
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SWOT Analysis - a useful summary technique for summarizing the key issues arising from an
assessment of a businesss "internal" position and "external" environmental influences.
Strategic Choice:
This process involves understanding the nature of stakeholder expectations (the "ground rules"),
identifying strategic options, and then evaluating and selecting strategic options.
Strategy Implementation:
This is the most difficult step to be taken. When a strategy has been analyzed and selected, the
task is then to translate it into the organizational action.
VISION
A vision is a statement about what an organization wants to become. Vision statement defines an
organization's values (values are guiding beliefs about how things should be done.) The vision
statement communicates both the purpose and values of the organization.
ELEMENTS OF VISION
Managers have three tasks in forming a strategic vision
Coming up with a mission statement that defines what business the company is presently in
and conveys the essence of who we are, what we do, and where we are now.
Using the mission statement as a basis for designing on a long-term course, making choices
about where we are going, and charting a strategic path for the company to pursue.
Communicating a strategic vision in clear, exciting terms that arouse organization wide
commitment.
MISSION
Mintzberg defines a mission as follows:
A mission describes the organizations basic function in the society, in terms of the
products and services it produces for its customers.
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A
clear
business
mission
should
have
each
of
the
following
elements:
The mission statement communicates the firm's core ideology and visionary goals, generally
consisting of the following three components2:
Core values to which the firm is committed
Core purpose of the firm
Visionary goals the firm will pursue to fulfill its mission
The firm's core values and purpose constitute its core ideology and remain relatively
constant. They are independent of industry structure and the product life cycle.
The core ideology is not created in a mission statement; rather, the mission statement is
simply an expression of what already exists. The specific phrasing of the ideology may
change with the times, but the underlying ideology remains constant.
CORE VALUES
The core values are a few values (no more than five or so) that are central to the firm.
Core values reflect the deeply held values of the organization and are independent of the current
industry environment and management fads.
One way to determine whether a value is a core value is to ask whether it would continue to be
supported if circumstances changed and caused it to be seen as a liability. If the answer is that it
would be kept, then it is core value. Another way to determine which values are core is to
imagine the firm moving into a totally different industry. The values that would be carried with it
into the new industry are the core values of the firm.
Core values will not change even if the industry in which the company operates changes. If the
industry changes such that the core values are not appreciated, then the firm should seek new
markets where its core values are viewed as an asset.
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CORE COMPETENCIES
Core competencies are the skills, knowledge or capabilities of a business in which it excels and
through these skills it can differentiate itself from all other businesses and achieve an edge over
its competitors. Core competency is not a skill that is prerequisite for the industry; instead it
should be something that the competitors desire. The competency of the business should be such
that the business can differentiate itself from its competitors by making its core competency
competitively unique.
A corporations core competency should be very strong that it cannot be easily imitated by other
businesses.
CORE COMPETENCY:
As a company gains experience it reaches a level where it can perform the activities consistently
well and at acceptable cost then that ability becomes a true competence. Most often the core
competency of the firm resides in its people and intellectual capital, it is one of the most valuable
assets a company has. It is all about how well you are applying your capabilities to your
resources. It can lead to world leadership. Competitive advantage occurs when resources and
capabilities are
Valuable to a companys chosen direction

Rare
CORE COMPETENCIES
Costly to imitate
Cannot easily be substituted
When these four criteria are met, resources and capabilities become core competencies
A firm can lose them if technology changes, suppliers enter market and if the competency of a
firm is still evolving.
2
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Core Competency Analysis provides an opportunity for the senior management to take a closer
look at the skills, processes and systems of the company. The benefit of the analysis to the
company includes the following:
THE VALUE CHAIN

Value chain is a high level model of how businesses receive raw materials as input, add
value to the raw materials through various processes, and sell finished products to
customers.3
To analyze the specific activities through which firms can create a competitive advantage, it is
useful to model the firm as a chain of value-creating activities. Michael Porter identified a set of
interrelated generic activities common to a wide range of firms. The resulting model is known as
the value chain and is depicted below:
Primary Value Chain Activities
INBOUND
LOGISTICS
OPERATIONS
OUTBOUND
LOGISTICS
MARKETING
AND SALES
SERVICE
The goal of these activities is to create value that exceeds the cost of providing the product or
service, thus generating a profit margin.
Inbound logistics include the receiving, warehousing, and inventory control of input
materials.
Operations are the value-creating activities that transform the inputs into the final
product.
Outbound logistics are the activities required to get the finished product to the
customer, including warehousing, order fulfillment, etc.
3 1 http://www.quickmba.com/strategy/value-chain/
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Marketing & Sales are those activities associated with getting buyers to purchase the
product, including channel selection, advertising, pricing, etc.
Service activities are those that maintain and enhance the product's value including customer
support, repair services, etc.
Any or all of these primary activities may be vital in developing a competitive advantage. For
example, logistics activities are critical for a provider of distribution services, and service
activities may be the key focus for a firm offering on-site maintenance contracts for office
equipment.
These five categories are generic and portrayed here in a general manner. Each generic activity
includes specific activities that vary by industry.
Support Activities
The primary value chain activities described above are facilitated by support activities. Porter
identified four generic categories of support activities, the details of which are industry-specific.
Procurement - the function of purchasing the raw materials and other inputs used in the
value-creating activities.
Technology Development - includes research and development, process

automation, and other technology development used to support the value-chain activities.
Human Resource Management - the activities associated with recruiting,

development, and compensation of employees.
Firm Infrastructure - includes activities such as finance, legal, quality management,

etc.
Support activities often are viewed as "overhead", but some firms successfully have used them to
develop a competitive advantage, for example, to develop a cost advantage through innovative
management of information systems.
VALUE CHAIN ANALYSIS

In order to better understand the activities leading to a competitive advantage, one can begin with
the generic value chain and then identify the relevant firm-specific activities. Process flows can
be mapped, and these flows used to isolate the individual value-creating activities.
Once the discrete activities are defined, linkages between activities should be identified. A
linkage exists if the performance or cost of one activity affects that of another. Competitive
advantage may be obtained by optimizing and coordinating linked activities.
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The value chain also is useful in outsourcing decisions. Understanding the linkages between
activities can lead to more optimal make-or-buy decisions that can result in either a cost
advantage or a differentiation advantage.
A companys cost competitiveness depends not only on the cost of internally performed activities
but also on the cost in the value chains of suppliers and forward channel allies. Suppliers value
chain are relevant because suppliers perform activities and incur costs in creating and delivering
the purchased inputs used in companys own value chain. A company should work closely with
its forward channel allies to revise or reinvent their value chains in ways that enhance their
mutual competitiveness. Value chain for products differ from that of services. We examine that
how well a company manages its value chain in respect to its rivals and what are the key areas of
strengths and weaknesses in the value chain and what steps need to be eliminated so that a
company can have competitive advantage over its competitors.
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STRATEGIC COST MANAGEMENT

Strategic costing is viewed as part of a larger business process to influence decisions on pricing
and profitability across several dimensions: product, customer, region, and distribution channel.
Strategic planning is a disciplined effort to produce fundamental decisions and actions that shape
and guide what an organization is, what it does, and why it does it, with a focus on the future.
The process is about planning because it involves intentionally setting goals (i.e., choosing a
desired future) and developing an approach to achieving those goals.
Strategic cost management not only leads to incremental performance improvement but also to
transformational change across the value chain. Strategic costing is viewed as part of a larger
business process to influence decisions on pricing and profitability across several dimensions:
product, customer, region, and distribution channel. Learn how your costing process aligns with
industry best practices, and be on the leading edge of emerging practices such as value chain
costing, shared services costing and outsourcing. Managerial use of cost information for the
purpose(s) of establishing organizational strategy, controlling the success methods to achieve the
strategies, and evaluating the level of success in meeting the proclaimed strategies .18
(18
John K. Shank and Vijay Govindarajan)
Strategic planning is a management tool, period. As with any management tool, it is used for one
purpose only: to help an organization do a better job - to focus its energy, to ensure that members
of the organization are working toward the same goals, to assess and adjust the organization's
direction in response to a changing environment.
In short, strategic planning is a disciplined effort to produce fundamental decisions and actions
that shape and guide what an organization is, what it does, and why it does it, with a focus on the
future.
The process is about planning because it involves intentionally setting goals (i.e., choosing a
desired future) and developing an approach to achieving those goals. The process is disciplined
in that it calls for a certain order and pattern to keep it focused and productive. The process raises
a sequence of questions that helps planners examine experience, test assumptions, gather and
incorporate information about the present, and anticipate the environment in which the
organization will be working in the future.
Finally, the process is about fundamental decisions and actions because choices must be made in
order to answer the sequence of questions mentioned above. The plan is ultimately no more, and
no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is
impossible to do everything that needs to be done in this world, strategic planning implies that
some organizational decisions and actions are more important than others - and that much of the
strategy lies in making the tough decisions about what is most important to achieving
organizational success.
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MICHAEL PORTER'S GENERIC STRATEGIES

The second central question in competitive strategy is a firm's relative position within its
industry. Positioning determines whether a firm's profitability is above or below the industry
average. A firm that can position it well may earn high rates of return even though industry
structure is unfavorable and the average profitability of the industry is therefore modest.
Each of the generic strategies involves a fundamentally different route to competitive advantage,
combining a choice about the type of competitive advantage sought with the scope of the
strategic target in which competitive advantage is to be achieved. The cost leadership and
differentiation strategies seek competitive advantage in a broad range of industry segments,
while focus strategies aim at cost advantage (cost focus) or differentiation (differentiation focus)
in a narrow segment. The specific actions required to implement each generic strategy vary
widely from industry to industry, as do the feasible generic strategies in a particular industry.
While selecting and implementing a generic strategy is far from simple, however, they are the
logical routes to competitive advantage that must be probed in any industry.
COST LEADERSHIP STRATEGY

Cost leadership is perhaps the clearest of the three generic strategies. In it, a firm sets out to
become the low-cost producer in its industry. The firm has a broad scope and serves many
industry segments, and may even operate in related industries -- the firm's breadth is often
important to its cost advantage. The sources of cost advantage are varied and depend on the
structure of the industry
DIFFERENTIATION STRATEGY
The second generic strategy is differentiation. In a differentiation strategy, a firm seeks to be
unique in its industry along some dimensions that are widely valued by buyers. It selects one or
more attributes that many buyers in an industry perceive as important, and uniquely positions
itself to meet those needs. It is rewarded for its uniqueness with a premium price.
FOCUS STRATEGY
The third generic strategy is focus, This strategy is quite different from the others because it rests
on the choice of a narrow competitive scope within an industry. The focuser selects a segment of
group of segments in the industry and tailors its strategy to serving them to the exclusion of
others. By optimizing its strategy for the target segments, the focuser seeks to achieve a
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competitive advantage in its target segments even though it does not possess a competitive
advantage overall.
THE FIVE COMPETITIVE FORCES THAT SHAPE

STRATEGY
The model of the Five Competitive Forces was developed by Michael E. Porter in his book
Competitive Strategy: Techniques for Analyzing Industries and Competitors in 1980, since that
time it has become an important tool for analyzing an organizations industry structure in strategic
processes.
There are 5 forces that Porter has identified that shape the industry and the market. The objective
of corporate strategy should be to modify these competitive forces in a way that improves the
position of the organization in the overall industry in which it operates. These forces show the
attractiveness of the market and determine the competitive intensity. Attractiveness refers to the
profitability of the overall industry. An "unattractive" industry is one in which the combination of
these five forces acts to drive down overall profitability. A very unattractive industry would be
one approaching "pure competition", in which available profits for all firms are driven down to
zero.
Three of Porter's five forces refer to competition from external sources and the remainders are
the internal threats. The diagram below shows these five forces.
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PORTERS FIVE FORCES OF

ANALYSIS
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THREAT OF
SUBSTITUTES
-Switching costs
-Buyer inclination to
substitute
-Price-performance
trade-off of substitutes
SUPPLIER POWER
-Supplier concentration
-Importance of volume to
supplier
-Differentiation of inputs
-Impact of inputs on cost or
differentiation
-Switching costs of firms in
the industry
-Presence of substitute
inputs
-Threat of forward
integration
-Cost relative to total
purchases in industry
RIVALRY
-Exit barriers
-Industry concentration
-Fixed costs/Value
added
-Industry growth
-Intermittent
overcapacity
-Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes
BUYER POWER
-Bargaining leverage
-Buyer volume
-Buyer information
-Brand identity
-Price sensitivity
-Threat of backward
integration
-Product differentiation
-Buyer concentration vs.
industry
-Substitutes available
-Buyers' incentives
BARRIERS
TO ENTRY
-Absolute cost
advantages
-Proprietary learning
curve
-Access to inputs
-Government policy
-Economies of scale
-Capital requirements
-Brand identity
-Switching costs
-Access to distribution
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Competitive rivalry
4
A starting point to analyzing the industry is to look at competitive rivalry. If entry to an industry
is easy then competitive rivalry will likely to be high. If it is easy for customers to move to
substitute products for example from coke to water then again rivalry will be high. Generally
competitive rivalry will be high if:
There is little differentiation between the products sold between customers.
Competitors
are
approximately
the
same
size
of
each
other.
If
the
competitors
all
have
similar
strategies.
It is costly to leave the industry hence they fight to just stay in (exit barriers)
Power of suppliers
Suppliers are also essential for the success of an organization. Raw materials are needed to
complete the finish product of the organization. Suppliers do have power. This power comes
from:
If they are the only supplier or one of few suppliers who supply that particular raw material.
If it costly for the organisation to move from one supplier to another (known also as switching
cost)
If there is no other substitute for their product.
Power of buyers
Buyers or customers can exert influence and control over an industry in certain circumstances.
This happens when:
There is little differentiation over the product and substitutes can be found easily.
Customers
are
sensitive
to
price.
Switching to another product is not costly.
4 http://www.learnmarketing.net/porters.htm
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Threat of substitutes
Are there alternative products that customers can purchase over your product that offer the same
benefit for the same or less price? The threat of substitute is high when:
Price
of
that
substitute
product
falls.
It is easy for consumers to switch from one substitute product to another.
Buyers are willing to substitute.
Threat of new entrant

The threat of a new organization entering the industry is high when it is easy for an organization
to enter the industry i.e. entry barriers are low.
An organization will look at how loyal customers are to existing products, how quickly they can
achieve economy of scales, would they have access to suppliers, would government legislation
prevent them or encourage them to enter the industry.
While conducting the analysis of Porters Five Forces, relevant factors for the companys market
situation, and then check against the factors presented for each force in the diagram above.
Depending on the industry, the favorability and un favorability is decided by however many
factors were positive and how many were negative, using + and -. After analyzing every
force, the companys attractiveness is identified.
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ARTICLE 1
The Five Competitive Forces That Shape Strategy
by Michael E. Porter
Editors Note: 5In 1979, Harvard Business Review published How Competitive Forces Shape
Strategy by a young economist and associate professor, Michael E. Porter. It was his first HBR
article, and it started a revolution in the strategy field. In subsequent decades, Porter has brought
his signature economic rigor to the study of competitive strategy for corporations, regions,
nations, and, more recently, health care and philanthropy. Porters five forces have shaped a
generation of academic research and business practice. With prodding and assistance from
Harvard Business School Professor Jan Rivkin and longtime colleague Joan Magretta, Porter
here reaffirms, updates, and extends the classic work. He also addresses common
misunderstandings, provides practical guidance for users of the framework, and offers a deeper
view of its implications for strategy today.
In essence, the job of the strategist is to understand and cope with competition. Often, however,
managers define competition too narrowly, as if it occurred only among todays direct
competitors. Yet competition for profits goes beyond established industry rivals to include four
other competitive forces as well: customers, suppliers, potential entrants, and substitute products.
The extended rivalry that results from all five forces defines an industrys structure and shapes
the nature of competitive interaction within an industry.
As different from one another as industries might appear on the surface, the underlying drivers of
profitability are the same. The global auto industry, for instance, appears to have nothing in
common with the worldwide market for art masterpieces or the heavily regulated health-care
delivery industry in Europe. But to understand industry competition and profitability in each of
those three cases, one must analyze the industrys underlying structure in terms of the five forces.
(See the exhibit The Five Forces That Shape Industry Competition.)
5 http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
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If the forces are intense, as they are in such industries as airlines, textiles, and hotels, almost no
company earns attractive returns on investment. If the forces are benign, as they are in industries
such as software, soft drinks, and toiletries, many companies are profitable. Industry structure
drives competition and profitability, not whether an industry produces a product or service, is
emerging or mature, high tech or low tech, regulated or unregulated. While a myriad of factors
can affect industry profitability in the short runincluding the weather and the business cycle
industry structure, manifested in the competitive forces, sets industry profitability in the medium
and long run. (See the exhibit Differences in Industry Profitability.)
Differences in Industry Profitability

Understanding the competitive forces, and their underlying causes, reveals the roots of an
industrys current profitability while providing a framework for anticipating and influencing
competition (and profitability) over time. A healthy industry structure should be as much a
competitive concern to strategists as their companys own position. Understanding industry
structure is also essential to effective strategic positioning. As we will see, defending against the
competitive forces and shaping them in a companys favor are crucial to strategy.
Forces That Shape Competition

The configuration of the five forces differs by industry. In the market for commercial aircraft,
fierce rivalry between dominant producers Airbus and Boeing and the bargaining power of the
airlines that place huge orders for aircraft are strong, while the threat of entry, the threat of
substitutes, and the power of suppliers are more benign. In the movie theater industry, the
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proliferation of substitute forms of entertainment and the power of the movie producers and
distributors who supply movies, the critical input, are important.
The strongest competitive force or forces determine the profitability of an industry and become
the most important to strategy formulation. The most salient force, however, is not always
obvious.
For example, even though rivalry is often fierce in commodity industries, it may not be the factor
limiting profitability. Low returns in the photographic film industry, for instance, are the result of
a superior substitute productas Kodak and Fuji, the worlds leading producers of photographic
film, learned with the advent of digital photography. In such a situation, coping with the
substitute product becomes the number one strategic priority.
Industry structure grows out of a set of economic and technical characteristics that determine the
strength of each competitive force. We will examine these drivers in the pages that follow, taking
the perspective of an incumbent, or a company already present in the industry. The analysis can
be readily extended to understand the challenges facing a potential entrant.
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PEST ANALYSIS
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes
a framework of macro-environmental factors used in the analysis of the industry. 6PEST is useful
when a company decides to enter its business operations into new markets and new countries.
The use of PEST, in this case, helps to break free of unconscious assumptions, and help to
effectively adapt to the realities of the new environment. PEST forces are basically all those
forces that are present in a particular country that can affect the company.
In conducting PEST analysis, it is required to consider each PEST factor as they all play a part in
determining the overall business environment. Some examples of topics include the following:
Political: (includes legal and regulatory): elections, employment law, consumer protection,
environmental regulations, industry-specific regulations, competitive regulations, inter-country
relationships/attitudes, war, terrorism, political trends, governmental leadership, taxes, and
government structures.
Economic: economic growth trends (various countries), taxation, government spending levels,
disposable income, job growth/unemployment, exchange rates, tariffs, inflation, consumer
confidence index, import/export ratios, and production levels.
Social: demographics (age, gender, race, family size, etc.), lifestyle changes, population
shifts, education, trends, fads, diversity, immigration/emigration, health, living standards,
housing trends, fashion, attitudes to work, leisure activities, occupations, and earning capacity.
Technological:
inventions,
new
discoveries,
research, energy
uses/sources/fuels,
communications,
rates
of
obsolescence,
health
(pharmaceutical,
equipment,
etc.),manufacturing advances, information
technology, internet, transportation,
bio-tech,
genetics, agri-tech, waste removal/recycling, and so on.
Porter, M. (1985) Competitive Advantage, New York: Free Press
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With a PEST analysis, the company can see a longer horizon of time, and be able to clarify
strategic opportunities and threats that the organization faces. By looking to the outside
environment to see the potential forces of change looming on the horizon, firms can take
the strategic planning process out of the arena of today and into the horizon of tomorrow.
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IFE
MATRIX
(INTERNAL FACTOR EVALUATION)

Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or evaluating
major strengths and weaknesses in functional areas of a business.
IFE matrix also provides a basis for identifying and evaluating relationships among those areas.
The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation.
Internal factors are
Management
Manpower
Machine
Material and
Money.
STRENGTHS: is something that a company is good at doing, e.g. skill, valuable physical asset
etc. companys strengths have diverse origin.
WEAKNESS: is something that company lacks or is bad at doing. How much the weakness
makes a company vulnerable depends on market place and on the strengths of the company.
EFE
MATRIX
(EXTERNAL FACTOR EVALUATION)
External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for
assessment of current business conditions. The EFE matrix is a good tool to visualize and
prioritize the opportunities and threats that a business is facing.
External factors can be grouped into the following groups:
" Social, cultural, demographic, and environmental variables:
" Economic variables
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" Political, government, business trends, and legal variables
CPM
(COMPETITIVE PROFILE MATRIX)
Competitive profile matrix is essential tool used in strategic management process, it contain all
the important critical success factors of industry. Success factor can vary from industry to
industry, every industry consider different success factor, and all the companies in CPM are
measured on same scale by considering the same success factor. Critical success factors are
extracted after deep analysis of external and internal environment of the firm. Rating refers to
strength and weakness, where 4= major strength, 3=minor strength, 2=minor weakness, and
1=majors weakness.
TOWS MATRIX
TOWS is another name for SWOT analysis. SWOT analysis the Strengths, weaknesses,
opportunities and threats of business. With the help of this matrix you analyze the internal and
external environment and formulate a strategy that best fits the strengths and weaknesses
internally and opportunities and threats from the external environment. The main objectives of
this analysis are:
Make the most of your strengths
Circumvent your weaknesses
Capitalize on your opportunities
Manage your threats
SWOT is a technique for analyzing the internal and external environments of an organization
through the identification and assessment of its Strengths, Weaknesses, Opportunities, and
Threats. SWOT analysis entails a distillation of the findings of an internal and external audit
which draws attention, from a strategic perspective, to the critical organizational strengths and
weaknesses and the opportunities and threats facing the organization (Kotler et al., 2005).
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SPACE MATRIX
The SPACE matrix is a management tool used to analyze a company. It is used to determine
what type of a strategy a company should undertake.
The space matrix has four quadrants and each of these quadrants suggests a different type or a
nature of a strategy.
Aggressive
Competitive
Defensive
Conservative
the SPACE matrix has two dimensions which are as follows:

Internal strategic dimensions:
Financial
Competitive advantage (CA)
strength
(FS)
External strategic dimensions:

Environmental
Industry strength (IS)
stability
(ES)
The following are a few model technical assumptions:

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By definition, the CA and IS values in the SPACE matrix are plotted on the X axis.
- CA values can range from -1 to -6.
- IS values can take +1 to +6.
The FS and ES dimensions of the model are plotted on the Y axis.
- ES values can be between -1 and -6.
- FS values range from +1 to +6.
INTERNAL-EXTERNAL
(IE) MATRIX)
The IE matrix is another strategic management tool used to analyze working conditions and
strategic position of a business. The Internal External Matrix or short IE matrix is based on an
analysis of internal and external business factors which are combined into one suggestive model.
The IE matrix is a continuation of the EFE matrix and IFE matrix models.
How does the Internal-External IE matrix work?
The IE matrix belongs to the group of strategic portfolio management tools. In a similar manner
like the BCG matrix, the IE matrix positions an organization into a nine cell matrix.
The IE matrix is based on the following two criteria:
Score from the EFE matrix -- this score is plotted on the y-axis
Score from the IFE matrix -- plotted on the x-axis
The IE matrix works in a way that you plot the total weighted score from the EFE matrix on the
y axis and draw a horizontal line across the plane. Then you take the score calculated in the IFE
matrix, plot it on the x axis, and draw a vertical line across the plane. The point where your
horizontal line meets your vertical line is the determinant of your strategy. This point shows the
strategy that your company should follow.
On the x axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weak
internal position. A score of 2.0 to 2.99 is considered average. A score of 3.0 to 4.0 is strong.
On the y axis, an EFE total weighted score of 1.0 to 1.99 is considered low. A score of 2.0 to 2.99
is medium. A score of 3.0 to 4.0 is high.7
7 http://www.maxi-pedia.com/internal+external+IE+matrix
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BCG
(BOSTON CONSULTING GROUP)
8
The BCG Matrix graphically portrays differences among divisions in terms of relative market
share and industry growth rate. The BCG Matrix allows a multidivisional organization to manage
its portfolio of businesses by examining the relative market share and industry growth rate of
each division relative to all other divisions in the organization. Relative market share is defined
as the ratio of a divisions own market share (or revenues) in a particular industry to the market
share (or revenues) held by the largest rival firm in that firm (FRED DAVID).
Question MarksHave a low relative market share, they compete in a high-growth industry.
Generally these firms cash needs are high and their cash generation is low. These businesses are
called Question Marks because the organization must decide whether to strengthen them by
pursuing an intensive strategy (market penetration, market development or product
development).
StarsRepresents the organizations best long-run opportunities for growth and profitability.
Divisions with a high relative market share and a high industry growth rate should receive
substantial investment to maintain or strengthen their dominant positions. Forward, backward
and horizontal integration, market penetration, market development and product development are
appropriate strategies for these divisions to consider.
Cash CowsHave a high relative market share position but compete in a low-growth industry.
Called Cash Cows because they generate cash in excess of their needs, they are often milked.
Cash Cows divisions should be managed to maintain their strong position for as long as possible.
Product development or diversification may be attractive strategies for Cash Cows.
DogsDogs have a low market share and a low growth rate and neither generate nor consume a
large amount of cash. However, dogs are cash traps because of the money tied up in a business
that has little potential. Such businesses are candidates for divestiture.
8 a.dqzzb.gov.cn///1113958416546.doc
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GRAND STRATEGY MATRIX

The Grand Strategy Matrix has become a popular tool for formulating alternative strategies. All
organizations can be positioned in one of the Grand Strategy Matrix's four strategy quadrants. A
firm's divisions likewise could be positioned. Appropriate strategies for an organization to
consider are listed in sequential order of attractiveness in each quadrant of the matrix.
QUADRANT I
Firms located in Quadrant I of the Grand Strategy Matrix are in an excellent strategic position.
For these firms, continued concentration on current markets (market penetration and market
development) and products (product development) are appropriate strategies. When a Quadrant I
organization has excessive resources, then backward, forward, or horizontal integration may be
effective strategies.
QUADRANT II
Firms positioned in Quadrant II need to evaluate their present approach to the marketplace
seriously. Although their industry is growing, they are unable to compete effectively, and they
need to determine why the firm's current approach is ineffectual and how the company can best
change to improve its competitiveness. Because Quadrant II firms are in a rapid-market-growth
industry, an intensive strategy (as opposed to integrative or diversification) is usually the first
option that should be considered.
QUADRANT III
Quadrant III organizations compete in slow-growth industries and have weak competitive
positions. These firms must make some drastic changes quickly to avoid further demise and
possible liquidation. Extensive cost and asset reduction (retrenchment) should be pursued first.
An alternative strategy is to shift resources away from the current business into different areas. If
all else fails, the final options for Quadrant III businesses are divestiture or liquidation.
QUADRANT IV
Quadrant IV businesses have a strong competitive position but are in a slow-growth industry.
These firms have the strength to launch diversified programs into more promising growth areas.
Quadrant IV firms have characteristically high cash flow levels and limited internal growth needs
and often can pursue concentric, horizontal, or conglomerate diversification successfully.
Quadrant IV firms also may pursue joint ventures.
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QSPM)
(QUANTITATIVE STRATEGIC PLANNING MATRIX)
The QSPM is a tool that allows strategists to evaluate alternative strategies objectively, based on
previously identified external and internal critical success factors. Like other strategyformulation analytical tools, the QSPM requires good intuitive judgment.
The QSPM comes under the third stage of strategy formulation which is called The Decision
Stage and also the final stage of this process. There are four main columns in QSPM, the left
column list down the key internal and external key factors which are same as in EFE and IFE
matrix. Adjacent column to key factors is Weight (relative importance of the factor) which holds
the numeric value obtained from EFE and IFE matrix weight column. The next to weight is AS
stands for attractive score assign priority to key factors using the numeric value 4 for most
importance and 1 for least importance and the last column TAS (Total attractive score) is the
value calculated by multiplying weight by AS. One thing important to note for each strategy
separate AS and TAS value added in the table, weight remain same for all set of strategies
mentioned in QSPM.
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BALANCE SCORE CARD

The balanced scorecard suggests that we view the organization from four perspectives, and to
develop metrics, collect data and analyze it relative to each of these perspectives.
The Learning & Growth Perspective

This perspective includes employee training and corporate cultural attitudes related to both
individual and corporate self-improvement.
The Business Process Perspective

This perspective refers to internal business processes. Metrics based on this perspective allow the
managers to know how well their business is running, and whether its products and services
conform to customer requirements (the mission).
The Customer Perspective

Recent management philosophy has shown an increasing realization of the importance of
customer focus and customer satisfaction in any business.
Financial perspective
The financial perspective addresses the question of how shareholders view the firm and which
financial goals are desired from the shareholders perspective.
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ARTICLE 2
IT Industry in Pakistan: New Challenges by Quick Profit Seekers
By Jamil Arif on March 8, 2010
Topics: IT Industry, Pakistan Computer Association (PCA)
The import of used IT equipment has played a vital role in the nations development. The
imported used and low cost computers are used by IT educational institutions, middle class and
lower middle class students and families. Likewise, hospitals, clinics, departmental stores and all
types of small and medium size business enterprises, even all types of schools, even madrisas
depend on used computers due to affordability for the middle and lower middle class.
The IT and Computer industry in Pakistan, despite having immense potential to grow, has been
forced to struggle for its very survival due to ill-conceived and hostile official policies. Had the
genuine issues of the industry would have been resolved; the country could have reap
tremendous benefits, especially in regard with earning precious foreign exchange.
Its ironic that whenever, industry raises the genuine concerns at top decision making levels,
some vested interest group derail the process by floating issues based on their vested interest.
One of such issue has been raised by insensitive proposal to ban used IT equipment in Pakistan.
The vested interest groups could not comprehend the fact that there are hundred of thousands of
people are involved in used computer business.
Similarly, majority of people belongs to middle class and lower strata of the society can not
afford a new computer at a price of 25,000 to 45,000/ and they opt for a used desktop PC at an
average price of 5,000 to 10,000/-. The laptops market presents similar picture where average
price of a Dual Core new laptop in HP/Dell/Acer is around 45,000 to 55,000/- whereas the same
in used is available at a price of 27,000 to 30,000/- and in Centrino technology even more
cheaper upto 22,000/-.
We simply cannot ignore the fact that Pakistan is a third world poor country and majority of the
people are living below the poverty line and it is not possible for them to afford a new PC. It has
been observed that a great number of students and professionals are using these used computers
and laptops. The initial users and beginners dont need a hi-fi computer rather a normal low-end
PC works fine for this purpose.
The import of used IT equipment has played a vital role in the nations development. The
imported used and low cost computers are used by IT educational institutions, middle class and
lower middle class students and families. Likewise, hospitals, clinics, departmental stores and all
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types of small and medium size business enterprises, even all types of schools, even madrisas
depend on used computers due to affordability for the middle and lower middle class.
The industry is aware of the fact that the used IT equipment is not more than three years old and
it still have a functional life of 5+ years and all available software can be operated on these
machines and fulfills business and education needs at a very low cost. Thus, resale of
used/Refurbished PCs is not only popular in developing countries like Pakistan but also in the
developed nations like USA, England, Europe, Canada and Australia are widely using these
computers.
According to a conservative estimate, Pakistan can save a huge foreign exchange by encouraging
used computers and IT equipment as used computer cost on an average is less than $40 as
compare to the cost of new ranges from $300 to $600. Currently there is no indigenous
production of IT equipment and its parts in the country. Therefore, import of such equipment by
no means is threat to any local industry. As said earlier there are only assemblers, some are small
one having one shop and some have big installation, but both are assemblers and nothing is
produced in our country.
Not withstanding national needs and aspirations, some multinational firms engaged in computer
hardware manufacturing are trying to get import of used IT equipment banned to make quick and
big money. However, the sitting government ought to consider that any such ill-advised step
would result in large public outcry and loss of precious foreign exchange.
The proposal of imposing any type of ban on used IT equipments is absolutely unnecessary as
Pakistan is not producing / manufacturing any computer then what industry we are talking about:
there are only assemblers. As a matter of policy we should not look at someones personal
business or cartel of few companies, rather we should think about the wellness of majority,
people at large and national interest.
By Abdullah Malik
The writer is President of Pakistan Computer Association (PCA) Islamabad Chapter, a
countrywide representative body of computer industry in Pakistan
9
9 http://telecomnewspk.com/2010/03/it-industry-in-pakistan-new-challengesby-quick-profit-seekers/
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SANOFI-AVENTIS
Sanofi-aventis, a global leader in the pharmaceutical industry, researches and develops medicines and vaccines
to help improve the lives of the greatest possible number of people.
Sanofi-Aventis, headquartered in Paris, France, is a multinational pharmaceutical company, the

worlds fourth-largest by prescription sales.[3][4] Sanofi-Aventis engages in the research and
development, manufacturing and marketing of pharmaceutical products for sale principally in the
prescription market, but the firm also develops over-the-counter medication.
Present in more than 100 countries, with around 11,000 scientists and have around 100,000
employees working to improve health and wellbeing.
The Global headquarters are in Paris, France.
By virtue of its commitments, Sanofi-aventis constantly adapts its development model to the world's emerging
human and economic problems. The company's growth is attributable to a regional approach to business operations,
backed by a comprehensive portfolio of innovative products, mature prescription medicines, consumer health
products, generics, vaccines as well as animal health.
7 MAJORS THERAPEUTIC AREAS

Sanofi-aventis focuses its activities on 7 major therapeutic areas
Cardiovascular
Thrombosis
Oncology
Central Nervous System
Metabolic Disorders
Internal Medicine
Vaccines
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HISTORY
Sanofi-Aventis was formed in 2004 when Sanofi-Synthlabo acquired Aventis. In early 2004, Sanofi-Synthlabo
made a hostile takeover bid worth 47.8 bn for Aventis. Initially, Aventis rejected the bid because it felt that the bid
offered inferior value based on the company's share value. The three-month takeover battle concluded when SanofiSynthlabo launched a friendly bid of 54.5 bn in place of the previously rejected hostile bid. French government
intervention also played an active role. The French government, desiring what they called a "local solution", put
heavy pressure on Sanofi-Synthlabo to raise its bid for Aventis after it became known that Novartis,
a Swiss pharmaceutical company, was in the running.
October 2010: Sanofi-Aventis SA will lay off 1,700 US employees due to restructuring triggered by growing generic
competition and other factors. The cuts being completed throughout 2011 according to transition needs. The layoffs
amount to about 25 percents of the workers in the company's US pharmaceutical business. The company deny the
action is related with acquisition plan of buying US biotech firm Genzyme Corp.
Sanofi-Synthlabo
Sanofi-Synthlabo was formed in 1999 when Sanofi (former subsidiary of Total) merged with Synthlabo (former
subsidiary of L'Oral). The merged company was based in Paris, France.
Aventis
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Aventis was formed in 1999 when French company Rhne-Poulenc S.A. merged with the German
corporation Hoechst Marion Roussel, which itself was formed from the 1995 merger ofHoechst AG with Roussel
Uclaf and Marion Merrell Dow. The merged company was based in Schiltigheim, near Strasbourg, France.
GREAT MEDICINE FOR MILLIONS OF PATIENTS

The sanofi-aventis portfolio of marketed products includes several medicines that are world
leaders in their respective classes, in the areas of thrombosis, cardiovascular disease, sleep
disorders, epilepsy, diabetes and cancer.
The Products Sanofi-Aventis produces are:
Alfuzosin (Xatral)
Biprofened
Clopidogrel (Plavix, Iscover)
Docetaxel (Taxotere)
Enoxaparin (Lovenox, Clexane)
Fexofenadine (Allegra, Telfast) and Triamcinolone (Nasacort)
Glatiramer acetate (Copaxone)
Insulin glulisine (Apidra) and Insulin glargine (Lantus)
Irbesartan (Aprovel, Avapro, Delix, Karvea, Triatec, Tritace)
Menactra
Oxaliplatin (Eloxatin)
Risedronic acid (Actonel) for
Valproic acid (Depakine) and Valproate semisodium (Depakote)
Zolpidem (Ambien, Ambien CR, Myslee, Stilnoct, Stilnox, Zolfresh, Zolt)
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The company also produces a broad range of over-the-counter products, among them IcyHot for muscle pain, Gold
Bond for skin irritation, and Selsun Blue dandruff shampoo (these three brands were acquired in 2010 when SanofiAventis purchased Chattem).
A HIGHLY PRODUCTIVE AND INNOVATIVE R&D

Sanofi-aventis R&Ds main objective is to provide patients with effective well-tolerated
medicines, at the earliest possible time. When it comes to diseases that are difficult to treat, such
as Alzheimer'D5s or depression, oncology or diabetes, we increase our chances of developing
groundbreaking treatments that will provide real patient benefit by multiplying and diversifying
pharmacological and scientific approaches. This is the reason why clinical trials may be carried
out simultaneously on different compounds to treat the same disease and indication.
Furthermore, research must take into account the amazing complexity of the human body.
Division into therapeutic areas is a way of isolating systems whose functions are sometimes
interconnected. Cooperation and exchange between the various teams are crucial in the early
stages as a way of identifying processes, which are common to different systems. For this reason,
certain compounds may sometimes be under study in programmes involving two different
therapeutic areas.
Cardiovascular disease
Thrombosis
Cancer
Neurodegenerative diseases
Diabetes and metabolic disorders
Allergies and infectious diseases
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These diseases are crucial public health issues because they are the principal causes of global
mortality. It is for that reason that Sanofi-aventis has concentrated its research efforts on those
subjects for which the Group has developed world-renowned Expertise.
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Sanofi-aventis in Pakistan
Sanofi-Aventis Pakistan Limited is one of the leading pharmaceuticals company in Pakistan. It focuses its activities on seven
major therapeutic areas: cardiovascular, thrombosis, oncology, central nervous system, metabolic disorders, internal medicine and
vaccines. Its portfolio of marketed products includes several medicines in the areas of thrombosis, cardiovascular disease, sleep
disorders,
epilepsy,
diabetes
and
cancer.
In
Pakistan,
Sanofi-Aventis
markets Actonel, Amaryl, Clexane, Eloxatin, Epilim, Lantus, Nasacort, Stilnox, Telfast, Taxotere, and Tritace among other
products.
This report aims to cover a thorough analysis of the strategic management of Sanofi-Aventis. It also included the study of
pharmaceutical industry of Pakistan, major competitors in the industry and various trends with respect to
Sanofi-aventis is present in Pakistan through the promotion of its products by the companys own
medical representatives. The local distribution of Sanofi-aventis products is ensured by 15
distributions nationwide.
Scientifically supported by a regional medical and marketing staff based in throughout the
Pakistan, Sanofi-aventis provides patients and healthcare professionals with efficient and
effective therapeutic responses to diseases.
Sanofi-aventis in Pakistan is not only committed to providing the most efficient and reliable
medicines to patients, but also to improving their quality of life.
The products available in Pakistan are
Actonel,Amaryl(glimepirid),Apidra,Aprovel,Avil,Avomine,Brulidie,Cefrom,Cidomycin,Clafora
n,Clexane,CoAprovel,Cordaron,Daonil,Eloxatin,Epilim,Essentiale,Flagyl,Frisium,Granocyte
,Haemaccel,,Idarac,Lantus,Largactil,Lasoride,Lasix,Nasacort,Neodipar,Nivaquine-P,NoSpa,Orelox,Peflacine,Phenergan,PhensedylP,Plavix,Profenid,Rulid,Secnidal,Stemetil,Stilnox,Targocid,Tarivid,Tavanic,Taxotere,Tel
fast,Tixylix,Triatec HCT, Tritace,Winstor,Xatral.
Amongst these Actonel, Amaryl, Clexane, Eloxatin, Epilim,Flagyl, Lantus, Nasacort,

Stilnox, Telfast, Taxotere, Tritace are some famous brand of Sanofi-Aventis.
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INDUSTRIAL AFFAIRS
The Sanofi-aventis Industrial Affairs organization in Pakistan is fully committed to providing the
highest standard of quality and innovative pharmaceutical products to its customers on time,
taking into account all current Good Manufacturing Practices (cGMP) from its plants based at
Karachi & Wah Cantt.
The Karachi plant manufacturers tablets, sterile liquids & powder, and large volume Haemaccel
infusions.The Wah plant excels in manufacturing oral liquids, some solids, ointments, creams
and gels.
While quality and productivity are given the highest level of importance, great emphasis is laid
on the Health & Safety of our workers and the protection of the environment.
OVERVIEW 2005
During the year 2005, Industrial Affairs continued its focus and commitment on providing high
customer value and quality while meeting all production targets. Increased sales volumes were
effectively supported by the manufacturing plants which produced approximately 10% more as
compared to 2004.
SPECIALTY UNITS
In the year 2005, Speciality units comprising of Claforan & Haemaccel plants operated
effectively to support the business with production meeting all business needs. In the 2nd year of
the Claforan plant, which is regarded as a state-of-the-art facility in Pakistan, there has been a
significant increase in production volumes from approximately 2.7 million Vials in 2004 to 3.5
million Vials in 2005.
INDUSTRIAL QUALITY COMPLIANCE

In order to achieve its aim, the Industrial Quality and Compliance function is committed to
ensure effective and safe products to its customers, manufactured and distributed by our plants
respecting the local regulatory requirements and our values. Therefore, all products being
produced at Karachi and Wah plants go through stringent quality control processes before being
shipped to our valued customers.
DISTRIBUTED CHANNELS
We receive stocks from our WAH Warehouse and KARACHI Warehouse and sell that to
Retailers and Wholesalers in local market through our 16 Regional Distributors. Sale to all
Institutions including Government and Private Hospitals all over the country. is done directly by
the company but supplied through 12 Institutional Agents.
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GOODS FLOWS CHART
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COMPANY PROFILE
Global CEO
Mr. Chris Viehbacher
The management committee comprises:

Tariq Wajid
GM and MD
M.Z. MOIN Mohajir
Director Finance and Administration
Muhammad Amjad
Director IA
Dr Amanullah Khan
Director Medical
Shakeel Mapara
Director HR
Mamoona Firdous
Director DRA
Yaseer Pirmuhammad
Head of Audit and Compliance
Laila Khan
Head of Communication
Masood A. Khan
Head of Supply Chain
Zubair Rizvi
Head of Marketing
Masaud Ahmad
Head of Sales
Head Office in Pakistan:

Karachi.
Plot 23, Sector 22, Korangi Industrial Area,
Manufacturing Facilities in Pakistan: Karachi.

Website Address:
http://www.sanofi-aventis.com.pk
VISION
To become a diversified healthcare leader, focused on patients needs
Valued by patients & healthcare providers
Sought-after as an employer
Respected by the scientific community & our competitors
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MISSION
Our core strategy is to:
Create value by rapidly launching and successfully marketing innovative pharmaceuticals that
satisfy unmet medical needs in large patient populations.
Focus commercial resources on strategic brands to drive sales growth and maximize the value
of existing and new global brands.
Aggressively recruit and retain top talent, enhancing our capabilities in drug innovation and
commercialization.
Evaluating
Elements:
Sanofi
Aventiss
mission
statement
on
A good mission statement should comprise of the following elements:

Customers
Products and services
Market
Technology
Survival, growth & profit
Philosophy
Self-concept
Concern for public image
Concern for employee
RECOMMENDED MISSION STATEMENT

Customers
Sanofi-Acentis strives to serve its customers in a unique and effective way and focuses on
satisfying their unmet needs.
2. Products and services

Manufacture a broad range of high quality and effective medicines and vaccines.
3. Market Sanofi-Aventis not only caters to the human health sector but produces
medicines for animal health.
4. Technology
Sanofi-Aventis posses state of the art technology to produce good quality medicines.
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5. Survival, growth & profit
Sanofi-Aventis aims to achieve corporate success through a firm commitment to provide
customers with high quality products and utilize resources on strategic brands.
6. Philosophy
Sanofi-Aventis strives to be the leading pharmaceutical manufacturer in Pakistan.
7. Self-concept
Sanofi-Aventis believes in innovation and advancement in the field of medicine to prevent
the consumers from diseases.
8. Concern for public image
Sanofi-Aventis
is an entity with a deep consciousness of contributing to the communities in which it operates. There is a firm
commitment to the alleviation of human suffering, whether the cause is illness or natural disaster.
9. Concern for employee

Employees are the most important resource for Sanofi-Aventis, the talented pool which SanofiAventis recruits is the key element for their success. The management at Sanofi-Aventis provides
chances to employees to excel in their personal and professional lives and is concerned that their
demands are met accordingly.
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Our values
Values are the heart and soul of a company and form the very premise on which a company
operates. They guide decisions, providing a clear roadmap for conducting business and achieving
aspirations.
At Sanofi-aventis, the values define their ethics and serve as the moral compass of the company.
They are the DNA of the company and distinguish Sanofi-Aventis from other companies.
Values are how the people at Sanofi-Aventis think, act and feel. It is the values they hold that
makes them the people and the company they are.
Therefore, values define what they do and how they behave. These are the values that every
member of Sanofi-aventis, in every continent, in every country, in every part of the organization,
lives day to day.
INNOVATION
Forward-Thinking
We encourage our people and partners to embrace creative solutions and excel through
entrepreneurship.
CONFIDENCE
Standing Out
We are confident; standing up for what we believe in and pursuing our goals passionately.
Always resilient, we dare to challenge the norm.
RESPECT
Embracing Difference
We recognise and respect the diversity and needs of our people, patients and partners, ensuring
transparent and constructive interactions through mutual trust.
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SOLIDARITY
Socially Responsible
We are united in shared responsibility for our actions, our people, the wellbeing of our patients
and in achieving a sustainable impact on the environment.
INTEGRITY
Acting Ethically
We commit to maintain the highest ethical and quality standards without compromise.
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REINFORCING
RELATIONSHIPS
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ANALYSIS OF THE INDUSTRY USING MICHAEL

PORTERS FIVE COMPETITIVE FORCES
Threat of New Entrants
Pharmaceutical industry is the industry that requires large amounts of capital to be
invested because of the high cost of the state-of-the art machinery, with high setup
costs to be competitive bearing in mind the competition. The requirement of the state-ofthe-art machinery is because of the hygienic issues and sensitivity of the health of the
customers. Currently there is a large number of firms operating in this industry that have
cost and performance advantage in the industry, which include multinational firms as
well as the local firms, which do not face high threat of entrant, as they do not provide
quality products eliminating the high cost of state of the art technology. This industry is a
people driven industry, as the target market is the doctors they are well aware of the
ingredients in the medicine because they are highly educated, and the industry works
on their influence. The other highest barrier is the regulatory body in Pakistan, which
requires intense documentation for the registration of the company and the selling the
medicine. Industry distribution channels are well established in the industry.
Pest forces that effect Threat of New Entrants
Political Factors One of the major threats a pharmaceutical industry faces is from the
government regulatory bodies. The registration of the company requires intense
documentation and the production of the medicines have high cost. Due to the current
political instability and security reasons there are very less chances that any foreign
investor would invest so heavily in Pakistan. Therefore the political factor creates a
threat for new entrant.
Economic Factors The industry seems to be growing well between 12-13% on an

average, but there has been a considerable increase in the cost of raw materials hence
increasing the overall costs, but due to the high cost of documentation and registration
of each change in a pharmaceutical product, it is difficult for companies to pass on the
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price to the end consumers easily. Hence the economical factor causes a threat to the
new entrant.
Social Factors Doctors are the main customers of a pharmaceutical company who act
as an influencer to the end consumers. There is as such no change in the decision
criteria of doctors as they are well aware and informed about these medicines.
Technological Factors The high technology required for the production of
pharmaceutical products has reduced the threat of entrants because of its high costs.
More importantly the invention of new improved and higher productive capacities of new
machines being adopted by the industry also tend to create unconventional barriers for
competitors.
P
E
T
Low
Moderate
High
Bargaining power of buyers
Pharmaceutical firms target doctors who then prescribed the medicine to the patients.
The pharmaceutical companies do not sell directly to the end users & hence the number
of buyers is not large, in fact it is limited. The products offered by Sanofi Aventis, with
the exception of a few, are similar to the products offered by various other companies
operating within the industry but, differ in branding adding to the switching costs of the
suppliers. The buyer currently is not aware of the need for information while buying
medicines but this trend is changing & Sanofi Aventis itself has established a Medical
Marketing Department who provides knowledge to the end customers. Buyers are
sensitive to the price changes because of the increasing role of media. Sanofi Aventis
does not in any way try to influence the buyers rather it focuses on the quality of the
products & care towards the customers to ensure the correct prescription is made.
Overall the bargaining power of the buyers is low.
Pest forces that affect bargaining power of buyers
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Political Factors Considering doctors to be our main customers. Any political instability
or government actions are not affecting the decision or bargaining power of the buyers.
Economic Factors Prices of pharmaceutical products are well regulated by the
government, hence the effect of inflation is almost nil, causing no impact in the
bargaining power of the buyer.
Social Factors The life style of end consumers are changing and they are becoming
more concerned about the medicines being prescribed to them. This creates an impact
on the doctor, to prescribe medicines of companies which provide high quality products
and have a good history.
Technological Factors There are more and more researches about new diseases and
their cures, these information are being provided to the doctor, who are keeping
themselves updated through various seminars, journals, etc, which increases their
bargaining power.
S
T
Low
Moderate
High
Threat of substitutes
The only reason for the substituting is the difference in the pricing. There are a lot of
generic products emerging in the industry lowering the overall profitability of the
industry. Availability of the herbal and homeopathic medicines increases competition
and the threat of substitutes. Generic products are in rise, as people tend to spend
lesser amount on allopathic medications because of slow economy. There is a moderate
to strong threat of substitutes because of availability of the herbal and homeopathic
medicines and customers illiteracy rate. They get the cure from these medicines along
with this there has been a failure towards the governments end to washout fake and
smuggled medicines from the market. The other factors that affect the substitutability of
the product depend on the prescription of the doctor, area, affordability, price &
education.
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Pest forces that affect threat of substitute

Political Factors There are high import duties on the raw material of pharmaceutical
products, of which the local companies benefit by charging lower prices than the
multinational companies who charge high prices to cover up high raw material costs to
give good quality product. This creates an advantage to the local companies and
increases the threat of substitutes.
Social Factors Our customer being the doctor, would prescribe a medicine to his
patient depending upon the profile of the patient, and keeping in mind other factors such
as location, price etc. The pharmacist and medical stores usually self prescribe similar
medicines to the consumers due to shortage or higher prices of the required medicine.
Both of these social factors increase the threat of substitute.
Technological Factors Research and development about new diseases and their cure
help different company in getting an advantage over their competitors, increasing the
threat of substitute.
P
S
T
Low
Moderate
High
56 | P a g e
Bargaining power of Suppliers
The bargaining power of suppliers in the industry is moderate. The inputs used by each
company, such as various chemicals, glass, plastics, etc. are unique & differentiated.
The method of a company selecting its supplier goes through a stringent selection
process, in order to make sure the quality of inputs match the company specific criteria;
this makes it a very cumbersome and costly process for companies, and therefore they
intend to stick to limited amount of suppliers who have passed their selection criteria.
The stringent process of selection reduces the number of potential suppliers. Overall it
increases the bargaining power of suppliers.
PEST forces that affect bargaining power of suppliers

Political factors Political factors has no significant effect on the bargaining power of
suppliers.
Economic factors Inflation may cause increase in cost of raw material, but the supplier
offsets the increasing cost by passing on the entire burden to the producer due to high
bargaining power.
Social Factors Social factors have no significant effect on the bargaining power of
suppliers.
Technological factors Advancement in technology brings about change in better
quality raw material, which the pharmaceutical companies demand from their suppliers,
and hence it reduces the bargaining power to small extent.
T
Low
Moderate
High
57 | P a g e
Rivalry among existing competition

Despite of the proprietary differentiation and unique selling proposition amongst the
products of different pharmaceutical companies, rivalry in the industry is high. There is
intense competition amongst the companies to gain a higher market share. Sanofi
Aventis lies on the 5th position despite the fact that it is the only company which
possesses the blood plasma technology in Asia. This shows the intense competition
amongst the existing companies. Competition is moderately diversified and since the
skills required are specialized it would be hard to get into the industry. Thus these
factors increase the rivalry amongst the competitors.
Pest forces that affect Rivalry

Political factors The political factors plays little or no role in promoting or looking after
competitiveness, quality and hygiene etc.
Economic Factors Growth potential and market demand is very healthy for the
industry, as inflation causes rise in the cost of production, which cannot be passed on
further to the consumers, because of government regulations. Hence the rivalry
increases between the competitors to gain greater market share of the growing industry.
Social Factors Change in trend towards more information needed by the consumers
about the medicine being consumed, make the competition between the company more
intense in relation to creating a positive image for the company and therefore its
products.
Technological Factors Technology can enable firms to adopt newer ways of
manufacturing and processing pharmaceutical products. Key industry players tend to
innovate with process restructuring and machines with more productive capacity, the
basic fight is on capturing the market not penetrating into each others shares.
E
S
T
Low
Moderate
High
58 | P a g e
Threat of New Entrants:

Yes
(+)
1) Do large firms have a cost or performance advantage in
your segment of the industry
2) Are there any proprietary product differences in your
industry?
3) Are there any established brand identities in your
industry?
4) Do your customers incur any significant costs in switching
suppliers?
5) Is a lot of capital needed to enter your industry?
6) Is serviceable used equipment expensive?
7) Does the newcomer to your industry face difficulty in
accessing distribution channels?
8) Does experience help you to continuously lower costs?
9) Does the newcomer have any problems in obtaining the
necessary skilled people, materials or supplies?
10) Does your product or service have any proprietary
features that give you lower costs?
11) Are there any license, insurance or qualifications that
are difficult to obtain?
12) Can the newcomer expect strong retaliation on
entering the market?
No
effec
t
No (-)
Threat of new entrants is low as there are a number of proprietary differences

which exist in the form of different formulas & medicines offered by various
companies in the pharmaceutical industry. Added to that is the high capital
requirement & established players in the market, make this a favorable factor
for Sanofi Aventis.
59 | P a g e
Bargaining Power of Buyers
Yes
(+)
No
effec
t
No
(-)
1) Are there a large number of buyers relative to the

number of firms in the business?
2) Do you have a large number of customers, each with

relatively small purchases?
3) Does the customer face any significant costs in

switching suppliers?
4) Does the buyer need a lot of important information?
5) Is the buyer aware of the need for additional

information?
6) Is there anything that prevents your customer from

taking your function in-house?
7) Your customers are not highly sensitive to price.

8) Your product is unique to some degree or has accepted
branding?
9) Your customer's businesses are profitable.
10) You provide incentives to the decision makers.
The buyers have a low to moderate bargaining power as Sanofi Aventis has
exclusive distribution rights for products such as Insulin. Also, the buyers cannot
take the function in-house due to the technology & capital requirements.
60 | P a g e
Threat of Substitutes
Yes
No
effec
t
(+)
1) Substitutes have performance limitations that do not
completely offset their lowest price. Or, their performance
is not justified by their higher price.
No
(-)
2) The customer will incur costs in switching to a

substitute.
3) Your customer has no real substitute.
4) Your customer is not likely to substitute.
The threat of substitutes is moderate as there are no real substitutes for

medicines but customers can switch to homeopathic, organic (Hikmat)
medicine, or even witch doctors.
Bargaining Power of Suppliers

Ye
s
(+)
No
effe
ct
No
(-)
1) My inputs (materials, labor, supplies, services, etc) are

standard rather than unique or differentiated.
2) I can switch between suppliers quickly and cheaply.
3) My suppliers would find it difficult to enter my business or

my customers would find it difficult to perform my function inhouse.
4) I can substitute inputs readily.
61 | P a g e
5) I have many potential suppliers.

6) My business is important to my suppliers.
7) My cost of purchases has no significant influence on my

overall costs.
The bargaining power of supplier is moderate to high as the inputs required

by players within the pharmaceutical industry are differentiated & switching
between suppliers is a time consuming task as the selection process is very
thorough & requires a significant investment of time.
Rivalry among Existing Competitors

Yes
(+)
is
not
No
(-)
1) The industry is growing rapidly.

2) The industry
overcapacity.
No
effe
ct
cyclical
with
intermittent
3) The fixed costs of the business are a relatively low

portion of total costs.
4) There are significant product differences and brand

identities between the competitors.
5) The competitors are diversified rather than specialized.
6) It would not be hard to get out of this business because

there are no specialized skills and facilities or long-term
contract commitments, etc.
7) My customers would incur significant costs in switching

to a competitor.
8)
My
product
is
complex
and
requires
detailed
62 | P a g e
understanding on the part of my customer.
9) My competitors are all of approximately the same size as
I am.
Moderate amount of rivalry exists within the pharmaceutical industry as the

pharmaceutical industry is growing at the rate of 8-9% annually while
exports are growing by 20% each year. The products are differentiated with
strong brand loyalties towards the international brands, however me too
brands are also growing in sales. Drugs require understanding of compounds
and dosage, etc from the side of the chemists but since manufacturers aim
their push efforts towards the chemists, rivalry grows to get shelf space with
retailers.
Overall industry rating:
Favorab Modera Unfavora

le
te
ble
Implicatio
ns
1) The threat of new entrants.
Favorable
2) Bargaining power of buyers.
Favorable
3) Bargaining power of suppliers.
Unfavorable
4) Threat of substitutes.
Unfavorable
5) Intensity
competitors.
of
Total
rivalry
among
Favorable
5
22
3
3
17
Favorable
63 | P a g e
Effect of pest on porters five forces
Opportun
Factor and Effect
ity or
Threat
Intense
documentation
Increase in the cost
of raw materials
End Customer
awareness
New Diseases
High technology
import duties on the
Buye
r
Powe
r
Supplie
r
Power
Moderat
New
Substi
Rivalr
entry
tute
Low
Threat
Low
High
High
High
High
Low
Low
Low
Low
Low
Opportunit
y
Opportunit
y
Opportunit
y
Threat
raw material
Research and
Opportunit
development
Pricing policies
Threat
Low
High
Low
High
Moderat
e
High
Moderat
e
Low
Low
Modera
Threat
Modera
te
Low
Low
te
Low
Modera
te
Moderat
e
High
High
Low
High
Modera
te
High
Low
Low
High
Low
Low
High
Interpretation
64 | P a g e
Analyzing Porters Five Forces for the pharmaceutical industry leads to the result that
the industry is a relatively favorable one to operate in. It provides a number of
opportunities for companies like Sanofi Aventis. The opportunities can be capitalized
upon and hence, would lead to an increase in the competitiveness of the firm and a
general level of prosperity of the industry. The above table shows that research and
development is Sanofi Aventiss strongest pillar, which helps the company to upgrade
and improve its technology. Advanced technology makes the processes uncomplicated
which utilizes less human resource and saves time.
The companys internal structure is very strong, the only threat it is exposed to is from
the external environment and that also from the political and economical factors which it
doesnt have any control over.
Company specific action
Sanofi Aventis should concentrate on the threat of substitutes and bargaining power of
suppliers extensively to further enhance the attractiveness of the industry for itself in
both the short and long run.
External Factor Evaluation
Opportunities
Weight
Ratin
g
Weighted
Average
High population growth.
0.08
0.24
Emerging diseases.
0.15
0.60
Customers preference for medicines produced by MNCs.
0.10
0.30
Acquisition of local companies.
0.18
0.72
Increasing awareness of the market about

various drugs and diseases.
0.15
0.45
Threats
1
Slow down of the economic growth of the country.
0.03
0.06
Heavy reliance on third parties for supplying of materials.
0.08
0.08
65 | P a g e
3
Counterfeit products in the market.
0.05
0.10
Exchange rate fluctuations.
0.05
0.10
Use of herbal and homeopathic medicines.
0.04
0.08
Government fixing prices of pharmaceutical products.
0.09
0.09
Total
1.00
2.82
The Total Weighted Score of 2.82 in the External Factor Evaluation (EFE) Matrix
denotes that Sanofi Aventis is responding well to the existing opportunities and threats
in Pharmaceutical Industry. In other words, the strategy Sanofi Aventis is implementing
is taking advantage of the existing opportunities and minimizing the potential adverse
effect of external threats in an appropriate way better than any of the competitors in the
industry.
However, the high pollution growth, emerging diseases, the preference for medicines
produced by MNCs, acquisition of local companies, increased awareness about various
drugs and diseases, slow down of the economic growth of the country, heavy reliance
on third parties for the materials, counterfeit products in the market, exchange rate
fluctuations, use of herbal and homeopathic medicines and the fixed prices by the
government from the EFE give a clear picture of the opportunities and industry threats,
which affect Sanofi Aventis.
Of the opportunities Sanofi Aventis can take advantage by acquiring the local
companies and use their infrastructure and core competencies which can help in
producing the remedy for the new and emerging diseases. A major threat that the
company is facing is the heavy reliance on the third party suppliers for the raw
materials, the suppliers experience financial difficulties or are unable to manufacture a
sufficient supply of the products meeting requisite quality standards. It also increases
the risk of quality issues, even at the most scrupulously selected suppliers. Even though
they aim to have backup sources of supply whenever possible, however, the
organization cannot be certain if there will be sufficient sources unavailable.
Company specific action:

Sanofi Aventis should focus on the opportunity of acquiring local firms, in order to tap
into new markets by taking over their production process and products. They should
study all the potential local companies which are growing due to innovation in
medicines. This strategy would even help them to cope with the threats of counterfeit
66 | P a g e
products, by introducing new medicines for different diseases, further strengthening
their product portfolio.Sanofi-Aventis should work more to create a differentiation
between the medicines provided by the company and the remedies provided by the
homeopathic and herbal medicines.
Competitive profile matrix
CPM
SANOFIAVENTIS
CRITICAL
SUCCESS
FACTORS
GSK
ABBOTT
WEIGH
T
RATIN
G
SCORE
RATI
NG
SCOR
E
RATIN
G
SCOR
E
Market Share
Price
Competitivenes
s
Financial
Position
0.05
0.15
0.20
0.10
0.15
0.6
0.6
0.6
0.1
0.30
0.30
0.4
Product Quality
0.05
0.2
0.15
0.10
Consumer
Loyalty
0.10
0.3
0.4
TOTAL
1.0
1.55
1.65
0.3
1.5
Note: The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 = major strength.
Interpretation:
67 | P a g e
According to the competitive profile matrix of the pharmaceutical industry in Pakistan,
the industry is lead by GSK as being the leader in Pakistan with the score of 1.65 and
Abbott with 1.5, whereas Sanofi-Aventis is a bit stronger than Abbott as it scores 1.55.
The rivalry amongst the firms is very high, as the competitive profile matrix values
portrays similar scores of all of them. Hence all the areas must be concentrated upon in
order to stay in-line with the competition.
Sanofi Aventis should not compromise on its quality as this would make them lose their
customer base. The pharmaceutical companies cannot increase their prices because of
the fixed prices by the Government, the organization does not has any other option to
increase their market share except for building a strong customer base which can be
achieved b providing the customers good quality products.
Source: http://www.medtrack.com/research/Istats.asp
INTERNAL ANALYSIS
From the internal analysis, we get the strengths and weaknesses of the company.
Those are derived from the following four components:
Financial Trends
Value chain Analysis
Core Competencies
Strategic Costs
1-Financial Trends
The sales of the company were Rs 6.158million in 2010 compared to Rs 6.725 million in
2009. There was a decrease in sales revenue. But there was an overall growth in net
sales over the last 2 years that is 2008 to 2009 of 54%. The gross profit of the company
has increased by 7.8% largely because of decline in cost of goods. The operating cost
of the company has decreased by 1.6%, implying that the company has controlled its
expenses.
Sanofi works mostly on cash basis because they are subject to the risk of non-payment
by their customers which consist principally of distributors, pharmacies, hospitals and
government institutions. In order to minimize the credit risk exposure they sell their
products on cash basis to the distributors which comprise approximately 86% of their
68 | P a g e
sales. The liquidity position of the company is sound. The company maintains flexibility
in funding by maintaining availability under control committed credit lines. Overall the
companys financial position is strong.
2-Value Chain Analysis
Human Resource
Management
Technology
Development
General Administration
Raw
Materi
al
Operatio
ns
Distribut
ors
Sales &
Marketi
ng
Retail
Pharma
cists
Final
Consum
ers
Suppliers of Raw Materials
Sanofi Aventis selects its suppliers after a thorough inspection by a team of the
suppliers. Suppliers are selected after inspection and testing their chemicals according
to their quality standards and also approved by the FDA. Moreover, the company
purchases its packaging material from local manufacturers.
Aventis primarily gets its raw material from its own affiliated companies, most of them
based in France. They are called inter company suppliers. Moreover, Aventis rely on
third parties for the manufacturing and supply of a substantial portion of their raw
material, active ingredients and medical devices. This exposes them to risk of supply
interruption in the event that their suppliers experience financial difficulties or are unable
to manufacture a sufficient supply of their products. It sometimes also increases the risk
of quality issues.
The supply chain department at Sanofi Aventis is performing under the supervision of
highly qualified and experienced staff which caters the supply needs of the local market.
69 | P a g e
The department also helps to qualify the suppliers on basis of their previous business
practices & market repo which helps Aventis to select the best suppliers.
The management of inventories is handled by experienced staff which starts its action
from the moment the raw material is received and is settled in the warehouse. The
effective movement of raw materials from warehouse to quality control and production
unit is the key to resource flexibility at Sanofi Aventis. The warehouses location plays a
key role in managing the inventories efficiently and the management at Sanofi Aventis is
fully aware of the long term assurance of material availability for the production that is
why the warehouse is situated at the heart of the factory, linking the production
processing belts and quality control department.
Operations
Operational activities are done at the plant located at Brooks Roundabout, Korangi
industrial area, Karachi. Sanofi has recently closed down their plant at Wah and are in
the process of transferring their machinery to the plant in Karachi.
Sanofi Aventis has a sophisticated and productive operations design. The objective of
the industrial affairs is to produce, pack and provide the highest standard quality
medicines, meeting stringent safety conditions, at competitive costs to its customers.
Beside this emphasis is also laid on the health and safety of their workers and
protection of the environment. The production plants are clean and every effort is made
to produce the best quality medicines. There are warehouses in the facility to keep the
boxes of medicine. Moreover, for vaccines, there is a vaccine storage area where the
vaccines are kept at the required temperature. In 2009, Sanofi-Aventis continued to
make considerable investment in Pakistan. They completed a new liquid plant in
Karachi and the renovation and up gradation of the Quality control lab, etc. The
medicines are produced with the precise ingredients to make sure the customers get
the best medicine. There are thousands of workers at the plant who check the medicine
for any flaws before packaging. The sophisticated machinery helps to nullify any error to
the greatest possible extent.
Sanofi Aventis has an independent quality control system which is strictly in accordance
with the world renowned authority regulations. Quality Control department of Sanofi is
70 | P a g e
equipped with top-line branded equipment. In connection with good quality
manufacturing facilities it also have well modernized and advanced equipment in its
quality control department which is being headed by well qualified, skilled and
experienced professionals.
Continuous improvement at Aventis is achieved by applying the standards of sampling
and testing of process and quality at different levels of production. This concept of
continuous improvement at Aventis is in line with the concept of Total Quality
Management.
Distributors
Sanofi receives stocks from the Karachi warehouse and sells that to Retailers and
Wholesalers in local market through their sixteen Regional Distributors. Sale to all
Institutions including Government and Private Hospitals all over the country is done
directly by the company but supplied through twelve Institutional Agents. There is a risk
of non payment by the customers of Sanofi which includes the distributors as well. So
to tackle this problem, the company sells their products on cash basis to the distributors
which comprise approximately 89% of the companys sales.
Sales and marketing
The sales team of Sanofi Aventis consists of well trained and educated personnel,
which have the skills to inform its customers mainly the doctors about their products and
identity its benefits. Aventis has formulated a sales team by a thorough and refined
process which selects the best and most compatible sales force that achieves the
objectives of the company. Every year Aventis conducts various seminars and
workshops for its sales people which include:
The importance of communication in an organization

Communication channels
Overcoming the communication barriers, etc.
71 | P a g e
Moreover, one of the strengths of the company is its extensive marketing on which it
has capitalized. The marketing expenses of Sanofi Aventis have increased primarily due
to the selling expenses pertaining to the addition of vaccines business. Many
promotional and other activities were held by the company to educate people about
disease such as dengue, etc and the use of vaccines to prevent/cure such diseases.
Sanofi operates in major therapeutic areas like diabetes, cardiovascular, oncology,
urology and many others. Each segment is focused through different medical marketing
activities for increasing awareness of disease. Moreover, Sanofi has contracted with
doctors, for example a Diabetes doctor, who travels to different cities in Pakistan and
sometimes abroad as well to deliver lectures and conduct seminar. This promotes
Sanofi-Aventiss image and promotes its brands. The cost incurred such as travelling,
etc is also marketing expense. International and local scientific medical congresses and
workshops are considered to be very valid source of updating the medical knowledge of
clinicians disease area. The company assists the medical community to update their
knowledge and skills to help the patient in a better way.
RETAIL PHARMACISTS
Retailers have to get registered and approved by the government to sell drugs. The
main focus of pharmaceutical companies like Sanofi Aventis is to convince doctors
through their sales team to prescribe their drugs. This sales team is on the companys
payroll and especially trained. The distributors sales force is responsible for distributing
medicines to chemists, retailer-cum-chemists and hospital pharmacies.
Support activities
Human Resource Management

The principal to equal opportunity is central to the HR policies of Sanofi-Aventis and
they are committed to equipping all employees with their job roles and support them to
realize their full potential. The company places high regard in grooming talent as it
believes that its employees are the sustainable competitive advantage for the future.
Technology Development
72 | P a g e
In line with their continuous endeavors to regularly upgrade information systems SanofiAventis continued with their policy to invest more and more in IT and upgrade of related
infrastructure, thereby enhancing both quantitative and qualitative aspects of
management decision making.
Sanofi-Aventis has continuously strived to seek excellence in process improvement.
The organization has managed to improve various processes across the organization
eliminating manual paper work as much as possible. Some of their business process
projects have been very successful which include:
Enterprise Resource System (ERP)
The corporation upgraded the enterprise ERP solution SAP to its latest
version. This required extensive offshore training to their key users.
ePerformance
Employee appraisal is a long and challenging process for every company.
This new tool was developed to reduce paper based exercise, which
improved record keeping, enforced timelines and ensured compliance to
the appraisal process.
Electronic Purchase Requisition
The EPR system which has now been further improved to integrate
directly with SAP and simplifies and automates the purchase process
throughout the organization. The system automatically enforces financial
controls and manages thresholds simplifying tasks for financial controlling
Employee Self Service
ESS has been enhanced and extended to their field force.ESS is a
powerful HR system to eliminate manual queries and paperwork for
dispensation of personal information, salary slips, leave application and
other payroll related services.
Research & Development.
Disease prevention is the most cost effective health care intervention available.
Because immunization helps to inhibit the spread of disease, many people can be
protected from illness and death. With tomorrows health challenges in view, the R&D
team is working both on innovation and improvement of medicine and there is lot of
effort towards vaccine delivery, as Sanofi Pasteur, the vaccine division of Sanofi group,
is the largest company in the world devoted entirely to human vaccines. Vaccines
provide an effective response to major diseases, generally as a preventive measure but
sometimes as a therapeutic solution.
73 | P a g e
R&D explores a broad spectrum of innovative approaches, and develops new products
in the key areas of therapeutic expertise: Thrombosis, Cardiovascular diseases,
Diabetes, Vaccines, Oncology, Central Nervous System disorders and Internal
Medicine.
Management Committee
The management committee provides direction and leadership to the organization by:
Setting the strategic objectives
Formulating policies and implementing risk management and internal control
procedures.
Ensuring effective management of resources
Monitoring activities to ensure objectives are met in transparent, ethical manner
in line with the values of the organization
The management committee comprises:
Tariq Wajid
GM and MD
M.Z. MOIN Mohajir
Director Finance and Administration
Muhammad Amjad
Dr Amanullah Khan
Shakeel Mapara
Mamoona Firdous
Yaseer Pirmuhammad
Laila Khan
Masood A. Khan
Zubair Rizvi
Masaud Ahmad
Director International Affairs

Director Medical
Director HR
Director DRA
Head of Audit and Compliance
Head of Communication
Head of Supply Chain
Head of Marketing
Head of Sales
3-Core Competencies
Research and Development
A major portion of Sanofi Aventiss budget is allocated for the Research and
Development. The mission of Sanofi-Aventis Research and Development is to address
patients' real needs those that are either poorly covered or completely ignored - and
provide them with appropriate therapeutic solutions. To fully achieve this objective, the
organization launched a transformation program in 2009 to make R&D an innovation
driver operating in a new environment that would stimulate creativity, openness and
higher performance.
74 | P a g e
R&D explores a broad spectrum of innovative approaches, and develops new products
in the key areas of therapeutic expertise: Thrombosis, Cardiovascular diseases,
Diabetes, Vaccines, Oncology, Central Nervous System disorders and Internal
Medicine.
Sanofi-Aventis last year conducted a clinical research projects the focus of these was in
the fields of diabetes, infectious disease and breast cancer. A large scale study, TAP
(Typhoid in Adult Pakistani Population) was conducted to determine the incidence of
typhoid fever. This project was of great benefit to the population at large as it offered
primary and secondary prevention to patients suspected of typhoid.
A research project VISION to determine the prevalence of retinopathy (condition
affecting the retina of the eye) in diabetic patients was also undertaken during 2009.This
project termed PRESERVING VISION is the first of its kind in Pakistan which should
help to avert blindness in diabetic patients.
Producing vaccine
Sanofi Pasteur is the vaccine division of the Sanofi group; it is the largest company in
the world devoted entirely to produce human vaccines. Vaccines provide an effective
response to major diseases, generally as a preventive measure but sometimes as a
therapeutic solution.
To prevent diseases in children, adolescents and adults around the world, the Sanofi
Pasteur R and D department is developing new generations of vaccines. Sanofi Pasteur
offers the wildest range of vaccines for 20 diseases.
With future health challenges in view, the R & D team of Sanofi Pasteur, the groups
vaccines division is working on both innovation and improvement of vaccine delivery
and modes of administration. Either alone or in partnership, the research team is
attacking such major diseases as dengue, pneumococcal infections, cytomegalovirus,
malaria, tuberculoses, Chlamydia and Type B meningitis.
State of the Art manufacturing plant

Sanofi-Aventis has state of the art manufacturing facility and processes. In order to
differentiate the quality of the products, the manufacturing processes are continuously
improved and stringent quality control standards are maintained.
For storing the vaccines, there is a Cold storage facility which stores the vaccines at the
ideal temperature.
75 | P a g e
Marketing and Sales Campaign

One of Sanofi Aventiss objectives is to create awareness to the people about the
diseases and how should they be cured. For this purpose Sanofi Aventis invests a major
portion in launching different marketing and sales campaign. The Marketing and sales
campaigns held by the company are Seeing is Believing, Explore the Potential
(Pediatric campaign), Pure water-Pure life campaign, RODD study, local speaker
programs, scientific product presentations and intravenous medication programs for
health professionals.
Typhoid, Pelvic Inflammatory Disease and Urinary Tract Infections are common
infections affecting a large segment of the population. Through clinicians, more than
6500 patients were provided free early diagnostic facilities for detection of Typhoid, PID
and Urinary Tract Infections during the year.
Sanofi-Aventis has a tradition of facilitating academic activities for medical practitioners.
As a part of this tradition, various events such as works and lectures by experts, round
table discussions, seminars and symposia etc were organized during the year. Around
8000 doctors participated thus enabling them to enrich and update their medical
practice.
Keeping in view the importance of Pediatric patients, focused activities like round table
discussions and local speaker programs were arranged to update knowledge on
medical conditions .A program U Management has been introduced all over Pakistan
to train the general physicians for establishing diagnosis and management of BPH.
4-Strategic Cost Management Process

Strategic costs are recorded through traditional accounting system, done by a team of
accountants hired by the company, based on the specific activities being performed and
then assigning costs to the appropriate activity responsible for creating the cost.
The Strategic costs of Sanofi-Aventis include the following costs:
Operational Costs (warehousing, manufacturing & workforce)
Sanofi- Aventis has a state of the art plant which is continuously improved and
upgraded; the cost incurred for advancement and maintenance is high. The corporation
is continuously transforming the business to meet the challenges that lie ahead.
76 | P a g e
Therefore a project for divestment of Wah manufacturing site and shifting its entire
production facility to one place at Karachi was initiated in 2007.
Sanofi-Aventis has a large pool of highly skilled labor force which has to be looked after.
Raw Material Cost
As Sanofi-Aventis outsource the raw materials for production, the cost increases.
Distribution and marketing Cost
Sanofi Aventis distributes its products all over Pakistan which is done through different
channels, of distribution. The organizations marketing department is active and
launches new campaigns to create awareness. It also conducts seminars and
workshops. Sanofi Aventis controls the transportation, distribution and marketing costs
effectively.
STRENGTHS
Strong Brand
Sanofi Aventis has the advantage of being a powerful and a strong brand name in the
market, which gains the customer trust and loyalty which is essential for the long term
growth of a company.
Research and Development
The R&D for a company is essential as it helps the organization to improve, advance
and grow both internally and externally. The research and development team of Sanofi
Aventis is working both on innovation and improvement of medicine. R&D explores a
broad spectrum of innovative approaches, and develops new products in the key areas
of therapeutic expertise: Thrombosis, Cardiovascular diseases, Diabetes, Vaccines,
Oncology, Central Nervous System disorders and Internal Medicine.
Diversified range of markets
Sanofi Aventis is a strong international pharmaceutical company which is in a constant
process of research and development, due to the strong R and D facility the
organization was able to manufacture vaccines and medicines for animals too.
77 | P a g e
The organization plays an important role in human health care as well as in animal
health care.
Medical Marketing Department
Spreading of knowledge to doctors on disease management and improvement of
healthcare standards is the foundation of the major scientific programs at SanofiAventis. They measure growth not only through numerical targets (i.e. sales) but also in
terms of addressing patients' needs through innovative campaigns and activities held at
hospitals & doctors' clinics.
Huge and strong product portfolio, catering different segments
Sanofi Aventis has an extensive portfolio of prescription medicines, vaccines, generics
medicines, consumer health care and animal health, along with a balanced presence on
both traditional and emerging markets. Sanofi-Aventis addresses fundamental health
issues and makes major therapeutic solutions available in its areas of expertise:
diabetes, oncology, thrombotic and cardiovascular diseases, central nervous system
disorders, internal medicine & vaccines.
The top ten products of Sanofi Aventis are Flagyl, Claforan, Amaryl, Haemaccel, Tarivid,
Daonil, Phenergan, No- spa, Avil, Lasoride. In which Flagyl has been named as the
Number 1 brand.
State of the Art manufacturing Plant
Sanofi Aventis has a state of the art manufacturing plant which is equipped with the
latest equipment and machinery which makes the production process hassle free and
efficient. Sanofi Aventis is the only pharmaceutical company in Asia which has the only
blood plasma technology.
Together with all other site departments, the Quality Control / Quality Assurance and
Qualification & Validation groups under Industrial Quality & Compliance (IQC)
department are committed to manufacture and control products consistently in
compliance with Sanofi Aventis global quality standards and regulatory requirements.
ERP system
The organization uses an Enterprise Resource System to improve the business
practices. It has updated the ERP system to Systems, Applications and Products (SAP)
computer software.
78 | P a g e
WEAKNESS
Slow decision making process due to an elongated hierarchy structure
The hierarchy at Sanofi Aventis is elongated which results in a slow decision making
process which results in a loss of time and at some instances opportunity as well.
Less employee benefits and perks
It is essential to keep the employees motivated to keep their spirits high and to keep
them determined to achieve the goals and objective, the employees complain that they
are not provided with enough fringe benefits as compared to the benefits provided by
the other corporations. This at times result in losing the employee to the competitor,
which is a major drawback for an organization.
Tough Credit Policy
The company has a tough credit policy for its customers, one of the threats it faced from
its customers were them delaying the payment or even failing to pay. For safety
measures the company reduced down the credit policy to 11%, while the rest 89% sales
are done on Cash basis. This tough credit policy lets go of the potential customers who
are ready to trade on credit basis.
Internal Factor Evaluation

Strengths
Weight
Ratin
g
Weighted
Average
Strong and recognized brand name.
0.15
0.60
Research & development.
0.12
0.36
79 | P a g e
3
Diversified range of markets.
0.05
0.20
Medical marketing department.
0.09
0.18
Huge and strong product portfolio, catering different

segments.
0.15
0.45
State of the art manufacturing plants. (Only blood plasma

technology in Asia)
0.13
0.52
ERP system being used, to seek improvement in processes.
0.06
0.18
Weakness
1
Slow decision making process due to elongated hierarchy

structure.
0.04
0.08
Decreasing market share. (2nd to 5th position in a space of 2

years)
0.13
0.13
Less employee benefits and perks.
0.05
0.10
Tough Credit Policy (Cash/Credit 89%/11%)
0.03
0.06
Total
1.00
2.86
Interpretation
The total weighted score of 2.86 in the Internal Factor Evaluation (IFE) Matrix indicates
that Sanofi Aventis is above average in its overall internal strength. The major strengths
are huge brand name, strong product portfolio and State of the art technology;
these strengths should be jealously guarded. Decreasing market share and less
employee benefits make up Sanofi Aventis weaknesses. Sanofi Aventis has a strong
research and development department which helps in advancing its business
processes. It also has a strong Medical Marketing Department which conducts
campaigns, seminars and conferences.

The company should maintain its strong product portfolio. They should look towards
emerging diseases and try to cater to them by extending the product line even further.
Sanofi-Aventis is the only company that possesses a blood plasma technology in
80 | P a g e
Asia; it should use its strong Research and Development team to invent new
medicines through it. Sanofi Aventis has a strong product portfolio which caters to its
diversified market which includes human health care and animal health care.
Generic Strategy
Narrow
buyer segment
Broad range of
buyers
Market Target
Differentiation
Low Cost
Diffrentiation Strategy
Overall low-cost
Provider strategy
Best-cost
provider
strategy
Focused low-cost
strategy
Focused diffrentiation
strategy
Generic strategy of Sanofi Aventis is Differentiation Strategy

Reasons for differentiation strategy:
Sanofi Aventis has an 88 year experience in insulin & diabetes & thus leads in the insulin
manufacturing field. Additionally it has exclusive distribution rights to insulin in Pakistan;
Superior quality and performance characteristics;
Large product portfolio, so targets a large market segment
Highly experienced professionals;
Emphasis on R&D in developed as well as emerging markets;
It is the only company to own a liquid blood plasma in Asia;
81 | P a g e
It uses an ERP system for improving its processes;
It has a Medical Marketing Department, which held conferences and seminars to aware
its customers, doctors, about the new diseases and the cures they have to offer.
TOWS Matrix
Strengths-S
Weakness-W
S1- Strong and recognized W1- Slow decision making

brand name.
process due to elongated
hierarchy structure
S2- Research &
development.
W2- Decreasing market
share (2nd to 5th position in
S3- Diversified range of
a space of 2 years)
markets.
W3- Less employee
S4- Medical marketing
benefits and perks
department.
W4- Tough Credit Policy
S5- Huge and strong
(Cash/Credit 89%/11%)
product portfolio, catering
different segments.
S6- State of the art
manufacturing plants
(Only blood plasma
technology in Asia)
S7- ERP system being
used, to seek
improvement in
processes.
82 | P a g e
Opportunities-O
SO-Strategies
WO-Strategies
O1- High population

growth
1- Focusing on untapped
markets like Cancer,
HIV, and new disease
to increase market
share. (W2, O2, O4)
2- Attract potential
customers by giving
easier credit terms to
about 15%-20%
(W4,01,03)
O5- Increasing
awareness of the market
about various drugs and
diseases.
1- Increase the market

share and strengthen
the product portfolio
by acquiring local
companies. (S5, O4)
2- Conducting seminars
and ATL activities to
create awareness
about emerging
diseases.
(S2,S4,O3,O2,O5)
3- Developing new
formulas in fields such
as Cancer (S2, O2,
O5)
Threats-T
ST-Strategies
WT-Strategies
T1- Slow down of the

economic growth of the
country
1- By focusing heavily on
personal selling, they
can inform potential
clients about their
superior quality
medicine compared to
the cheaper local
medicines. (S1,S4,T3)
2- Capitalize on exclusive
technology & develop
new medicines (Tablet
Insulin) (S2,S6, T1,
T6)
1- Motivate employees to
formulate and market
new medicines by
giving them monetary
benefits
(W2,W3,T3,T5)
2- Backward integration
to avoid potential
shortage (W1,T2)
O2- Emerging diseases.

O3- Customers
preference for medicines
produced by MNCs.
O4- Acquisition of local
companies.
T2- Heavy reliance on

third parties for
supplying of materials
T3- Counterfeit products
in the market
T4- Exchange rate
fluctuations
T5- Use of herbal and
homeopathic medicines
T6- Government fixing
prices of pharmaceutical
83 | P a g e
products.
Space Matrix
INTERNAL STRATEGIC
POSITION
EXTERNAL STRATEGIC
POSITION
Financial Strength (FS)

Return on Investment +5
Liquidity +5
Working Capital +4
Cash flows +5
Inventory turnover +4
Leverage +4
Environmental Stability (ES)

Technological changes -2
Rate of inflation -4
Demand variability -2
Price range of competing products -2
Barriers to entry into market -3
Competitive pressure -3
Ease of exit from market -2
Price elasticity of demand -4
Risk involved in business -2
FS Average +4.5
ES Average 2.6
84 | P a g e
Competitive Advantage (CA)
Market share -3
Product quality -1
Product life cycle -2
Customer loyalty -2
Competitions capacity utilization -3
Technological know how -1
Control over suppliers and
distributors -2
Industry Strength (IS)

Growth Potential +4
Profit Potential +5
Technological Know-how +6
Financial stability +5
Resource utilization +5
Ease of Entry into New Markets +4
Productivity, capacity utilization+5
IS Average +4.9
CA Average -2
Y axis
Financial strength +4.5 Y axis: 4.5+ (-2.6) = 1.9
Environmental stability -2.6
X axis
Industry strength +4.9 X axis: 4.9 + (-2.00) = 2.9
Competitive advantage -2.0
85 | P a g e
Conservati
ve
Aggressive
FS
+6
+5
+4
(2.9,
1.9)
+3
IS
+2
+1
+0
-5
-4
-3
-2
-1
+0
+1
+2
+3
+4
-1
Defensive
-2
Competitiv
e
-3
-4
-5
-6
86 | P a g e
+5
Sanofi Aventis is in a good position to use its internal strengths to take advantage of the
external opportunities, overcome the internal weaknesses and avoid external threats.
Sanofi Aventis should pursue the Aggressive Strategies. Therefore, Market
Penetration, Market Development, Product Development, Backward/ Forward
Integration, horizontal integration can be feasible strategies, depending upon the
specific circumstances that face the firm.

Sanofi Aventis should be the market leader and grab the market share from
Glaxo Smith Kline.
The main problem Sanofi Aventis faces is that it relies heavily on its suppliers for
raw material; Sanofi Aventis can implement the strategy of Backward Integration
and be its own supplier.
To develop new formulae for the prevention from Cancer
Tap into new markets- HIV and Cancer.
BCG Matrix
TOP BRANDS Claforan
Flagyl
Haemaccel
Daonil
Claforan
Phenergan
Amaryl
No-Spa
Haemaccel
Avil
Tarivid
Lasoride
Flagyl
Amaryl
No-Spa
Avil
Tarivid
Daonil
Phenergan
87 | P a g e
Lasoride
According to the results of Boston Consulting Group (BCG) Matrix, Claforan and
Haemaccel lies in the 2nd quadrant of the matrix that represents organization best longrun opportunities for growth and profitability. And because it is the segment with high
relative market share and a high industry growth rate it should receive substantial
investment to maintain and strengthen the dominant position.
Appropriate Strategies include: Forward, Backward, and Horizontal Integration; Market
Penetration; Market Development; Product Development; and Joint Ventures.
Sanofi Aventis should market Falgyl and make it a star. Flagyl has been named
the Number 1 brand, the sales of the products are high but the growth of the
product itself is slow.
88 | P a g e
Grand Strategy Matrix
Sanofi Aventis
Rapid Growth Market
1. Market
Development
2. Market Penetration
3. Product Development
4. Forward/ Backward
Integration
Strong Competitive Position
Weak Competitive
Integration Position
5. Backward Integration
6. Horizontal Integration
Slow Growth Market
The pharmaceutical industry is growing rapidly which has a positive effect on the
industry because the demand for the products is increasing.
Due to this factor there is an intense competition in the industry so in order to grow and
obtain additional market share, Sanofi Aventis is positioned in the 1st quadrant of the
grand strategy Matrix and hence can pursue following strategies depending upon the
market circumstances.
Market Development- To find cure for diseases like HIV and to formulate new and
better methods to cure Cancer.
Product Development- To produce medicines which are effective and have
minimum side effects.
Market Penetration- To capture the animal health care market share
89 | P a g e
Backward Integration- Sanofi Aventis should start supplying raw materials which
will resolve their weakness
Internal External (IE) Matrix
Weak
1.0 to
1.99
3
Strong
Average
3.0 to 4.0 2.0 to 2.99
High
3.0 to
4.0
Medium
2.0 to
2.99
Low
1.0 to
1.99
According to the above IE Matrix, Sanofi Aventis is placed in the V cell, which suggests
that the organization should follow the hold and maintain strategy. In this case, the
tactical strategies should focus on market penetration and product development.
Product Development- To produce medicines which are effective and have

minimum side effects. Medicines should be developed to cure from HIV and
Cancer.
Market Penetration- Market its existing products by holding seminar and
conferences and informing its customers, doctors, about the benefits of
companys products.
90 | P a g e
Summary Matrix
Alternative Strategies
Forward
Integration
Backward
Integration
Horizontal
Integration
Market Penetration
Market
Development
Product
Development
Concentric
Diversification
Conglomerate
Diversification
Horizontal
Diversification
Joint Venture
Retrenchment
Divestiture
Liquidation
IE
GRAN
D
X
COUN
T
2
X
X
X
X
3
2
SPACE
0
0
0
0
Strategic Analysis for Sanofi Aventis brings to front that Production Development,
Forward Integration, Backward Integration and Horizontal Integration are the four
common strategies found through Porters input matching model.
Therefore its suggested that they can go for any of these or either having a combination
of these strategies.
Product Development: Sanofi Aventis has a very strong Research and Development
department; it can use its state of the art technology to its fullest and formulate a cure
for HIV, Cancer and other emerging diseases.
91 | P a g e
Market Penetration: Sanofi should focus on its Medical Marketing Department, in
organizing different events in combine with their ATL activities to increase the
awareness and brand image of its products, so that the sales of its existing products
increase and get a larger market share than its competitors.
The QSPM Matrix

Strategy 1 - Developing new formulas in fields such as Cancer
Strategy 2 - By focusing heavily on personal selling, they can inform potential clients
about their superior quality medicine compared to the cheaper local medicines.
Strategic Alternatives
Critical Success Factors
Weig
ht
Strengths
Developing
new
formulas
Focusing
heavily on
personal
selling
AS
TA
S
AS
TA
S
Strong and recognized brand name.
0.15
2.0
0
0.3
0
4.0
0
0.6
0
Research & development.
0.12
4.0
0
0.4
8
1.0
0
0.1
2
Diversified range of markets.
0.05
3.0
0
0.1
5
4.0
0
0.2
0
Medical marketing department.
0.09
2.0
0
0.1
8
4.0
0
0.3
6
Huge and strong product portfolio,

catering different segments.
0.15
3.0
0
0.4
5
4.0
0
0.6
0
State of the art manufacturing

plants. (Only blood plasma
technology in Asia)
0.13
4.0
0
0.5
2
1.0
0
0.1
3
ERP system being used, to seek

improvement in processes.
0.06
3.0
0
0.1
8
2.0
0
0.1
2
92 | P a g e
Weaknesses
Slow decision making process due
to elongated hierarchy structure.
0.04
3.0
0
0.1
2
2.0
0
0.0
8
Decreasing market share. (2nd to

5th position in a space of 2 years)
0.15
4.0
0
0.6
0
4.0
0
0.6
0
Less employee benefits and perks.
0.06
2.0
0
0.1
2
3.0
0
0.1
8
SUBTOTAL
1.00
3.1
0
2.9
9
Strategic Alternatives
Critical Success Factors
Weig
ht
Opportunities
Developing
new
formulas
Focusing
heavily on
personal
selling
AS
TA
S
AS
TA
S
High population growth.
0.08
3.0
0
0.2
4
4.0
0
0.3
2
Emerging diseases.
0.15
4.0
0
0.6
0
1.0
0
0.1
5
Customers preference for

medicines produced by MNCs.
0.10
4.0
0
0.4
0
4.0
0
0.4
0
Acquisition of local companies.
0.18
3.0
0
0.5
4
1.0
0
0.1
8
Increasing awareness of the market

about various drugs and diseases.
0.15
4.0
0
0.6
0
3.0
0
0.4
5
93 | P a g e
Threats
Slow down of the economic growth
of the country.
0.03
2.0
0
0.0
6
3.0
0
0.0
9
Heavy reliance on third parties for

supplying of materials.
0.08
1.0
0
0.0
8
2.0
0
0.1
6
Counterfeit products in the market.
0.05
2.0
0
0.1
0
4.0
0
0.2
0
Exchange rate fluctuations.
0.05
4.0
0
0.2
0
2.0
0
0.1
0
Use of herbal and homeopathic

medicines.
0.04
3.0
0
0.1
2
4.0
0
0.1
6
Government fixing prices of

pharmaceutical products.
0.09
4.0
0
0.3
6
2.0
0
0.1
8
SUBTOTAL
1.00
SUM TOTAL ATTRACTIVENESS

SCORE
3.3
0
2.3
9
6.4
0
5.3
8
According to the QSPM Matrix, Sanofi Aventis should implement Strategy 1 i.e. to
develop new formulas to cure cancer. Sanofi Aventis has the advantage of having an
advanced and strong Research and Development Department and highly skilled
scientists, by taking advantage of these strengths Sanofi Aventis can formulate new
methods to cure Cancer. Sanofi Aventis is the only pharmaceutical company in Asia to
own a blood plasma plant. All these strengths can be utilized to give the consumers a
better and disease free life.
Strategic Implementation
Strategy implementation is the most important area of the whole strategic management
process. Nine out of ten strategies fail at the implementation stage. Just being able to
devise new strategies to outperform the competitors is not enough. The strategic vision
94 | P a g e
has to be translated into concrete steps & the internal processes and management
system have to be aligned accordingly. Internal and external analysis is just the tools to
drive strategies but the implementation includes three parts. These parts are structure,
resources and culture. All or few of these have to be altered to make sure that strategy
being implemented is successful.
The components of strategic implementation

1. Build an organization with the competencies, capabilities and resource
strengths to carry out the strategy successfully
The success of Sanofi Aventis proves that it has been able to manage its resources in
an efficient manner. It has been the first pharmaceutical company to produce insulin in
Pakistan, by the name of Lantus, it also has the credit of owning the only blood plasma
plant in Asia
In order to run a smooth manufacturing cycle, Sanofi Aventis would need to divert its
resources into selecting the raw material suppliers. The facilities required to produce
such high tech products must be protected strictly. Thus, Sanofi Aventis would have to
be very careful about the security of its manufacturing plant.
Sanofi- Aventis has good relationship with its employees; it keeps on motivating them
and makes them feel a part of the company through various activities and by giving
them a good environment in the company. The company fails to motivate them through
monetary benefits, and hence the employees should be provided perks and benefits for
achieving goals and for their contribution, to increase the motivation and the output of
the company.
Sanofi- Aventiss should further effectively tap new markets, develop infrastructure and
cater to the current customers.
2. Developing budgets to steer ample resources into critical value chain activities
For Sanofi Aventis it is important that they increase the base of their operations to
penetrate and extend their share of the market. To accomplish this task successfully
Sanofi Aventis should concentrate on developing its infrastructure logistics i.e. mainly on
its supply of raw material.
95 | P a g e
3. Creating Strategy Supportive Structure
Sanofi Aventis considers itself a learning organization and also thrives to give its best to
its consumers. It looks to improve itself on a consistent basis and looks to make
changes whenever necessary. The structure and culture that the organization employs
is a very open one which helps promote teamwork.
However, Sanofi Aventis should continue with training its employees to equip them to be
better able to deal with product and market innovations in the future. The sales team of
Sanofi Aventis requires training to influence their customers.
4. Creating a Strategy-supportive work environment and corporate culture
Sanofi Aventis thrives to maintain friendly environment between its employees. It has a
very open culture where idea generation is encouraged and ideas are heard as well.
This has helped Sanofi Aventis to achieve its vision and mission. The company sends
its employees to training on a consistent basis and thus has a highly skilled labour
force. It promotes teamwork and thus development and manufacturing of products
locally wouldnt need to change the culture of the organization to a great extend. It
already promotes new ideas so adoption to the new ideas shouldnt be a hurdle
CONCLUSION
Sanofi Aventis is strong when it comes to the integration of resources, structure and
culture required to implement a strategy successfully. It should continue in the positive
direction and take advantage of the various opportunities and possible strategies
mentioned throughout the report.
PITFALLS OF STRATEGY IMPLEMENTATION
The implementation of strategy can fail if the resources, structure and culture are not
well blended to overcome the cognitive, motivational, resource and political hurdles that
can come into existence any time during the implementation process.
Thus, Sanofi Aventis should be aware of the consequences that can result because of
the above and constantly monitor the internal environment to avoid such circumstances
to be able to maintain its current position and grow in the future.
Balance Business Score Card

TARGETS
OBJECTIVES
MEASURES
INITIATIVES
96 | P a g e
FINANCIAL
CUSTOMER
INTERNAL
BUSINESS
PROCESS
INNOVATION,
LEARNING &
Increase
shareholders
wealth
Create awareness
among general
public about
diseases and how
to prevent them
Create/ retain
loyalty customer
loyalty
provide best
quality medicine
Convert paper
based system to
electronic
Stringent safety
conditions as
well as
production of
highest quality
medicine
Enhancement of
infrastructure;
adition and
automation of
existing
equipment.
Emphasis on
employee
grooming and
growth
Hygiene
campaign
Round table
discussions
Speaker
programs
Reduce no of
days receivable
Reduce
running
finance
Impact 2009
Completion
of new liquid
plant
GROWTH
97 | P a g e

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Institute of Business Management

Institute of Business Management

Institute of Business Management

STRATEGY - WHAT IS STRATEGY

Valuable to a companys chosen direction

THE VALUE CHAIN

Primary Value Chain Activities

Technology Development - includes research and development, process

Human Resource Management - the activities associated with recruiting,

Firm Infrastructure - includes activities such as finance, legal, quality management,

VALUE CHAIN ANALYSIS

STRATEGIC COST MANAGEMENT

John K. Shank and Vijay Govindarajan)

MICHAEL PORTER'S GENERIC STRATEGIES

COST LEADERSHIP STRATEGY

THE FIVE COMPETITIVE FORCES THAT SHAPE

PORTERS FIVE FORCES OF

Threat of new entrant

Differences in Industry Profitability

Forces That Shape Competition

Porter, M. (1985) Competitive Advantage, New York: Free Press

(INTERNAL FACTOR EVALUATION)

(EXTERNAL FACTOR EVALUATION)

the SPACE matrix has two dimensions which are as follows:

External strategic dimensions:

The following are a few model technical assumptions:

GRAND STRATEGY MATRIX

BALANCE SCORE CARD

The Learning & Growth Perspective

The Business Process Perspective

The Customer Perspective

Sanofi-Aventis, headquartered in Paris, France, is a multinational pharmaceutical company, the

7 MAJORS THERAPEUTIC AREAS

GREAT MEDICINE FOR MILLIONS OF PATIENTS

The Products Sanofi-Aventis produces are:

A HIGHLY PRODUCTIVE AND INNOVATIVE R&D

Amongst these Actonel, Amaryl, Clexane, Eloxatin, Epilim,Flagyl, Lantus, Nasacort,

INDUSTRIAL QUALITY COMPLIANCE

GOODS FLOWS CHART

The management committee comprises:

M.Z. MOIN Mohajir

Director Finance and Administration

Head of Audit and Compliance

Head of Supply Chain

Head Office in Pakistan:

Plot 23, Sector 22, Korangi Industrial Area,

Manufacturing Facilities in Pakistan: Karachi.

A good mission statement should comprise of the following elements:

RECOMMENDED MISSION STATEMENT

2. Products and services

9. Concern for employee

ANALYSIS OF THE INDUSTRY USING MICHAEL

Pest forces that effect Threat of New Entrants

Economic Factors The industry seems to be growing well between 12-13% on an

Bargaining power of buyers

Pest forces that affect bargaining power of buyers

Pest forces that affect threat of substitute

PEST forces that affect bargaining power of suppliers

Rivalry among existing competition

Pest forces that affect Rivalry

Threat of New Entrants:

Threat of new entrants is low as there are a number of proprietary differences