MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

Case study:ASTRAEYE PHARMA PVT LTD.

Fanshawe college

MGMT7023 Strategic Policy & Planning

Professor Derek Noon

October 12, 2023

Jonathan Hudson, Mingqian Zheng, Ruishan Liu, Jesse Daniels

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

1. Issue Identification

AstraEye Pharma Pvt Ltd, from its Indian branch, engaged in the ophthalmic pharmaceutical business.
They are pursuing aggressive sales and market share growth plans for the new fiscal year. And make sure
that whether to develop and sell a new product- Fresh Plus, or just focus on the old main product.

2. External Analysis
2.1. Industry Overview
An overview provides a brief snapshot of the industry and key trends. Important categories to pay
attention to are:

- Annual sales in dollars or units by key geographic markets or other indicators of market size
1
with year-to-year growth, annual growth rate and/or anticipated future growth
- Key product or market segments by size and growth rate or performance indicators including
useful numbers (for comparison to firm's strategy internal analysis)
- Total industry participants including trends and key entries and exits
- Main competitors and key industry success factors (for comparison to firm's strategy in
internal analysis)
- Other key trends, shifts and/or industry conditions such as seasonality that are not part of
PESTEL or five forces analysis
-

The global ophthalmology pharmaceutical industry is growing at 6% annually

2.2. PESTEL

Political Economic Social Technologica Environmental Legal

l

Governmental Increased Since the Potential new Increased heat Recent

policies demand for 2019 and improved and dryness due labour and
regarding the dollar in pandemic R&D in the to climate wage laws
zoning laws India, leading there has been ophthalmolog change. have been
for to larger and a growing y implemente
development more frequent concern and pharmaceutica d in India
of exchange rate distrust in l industry. reducing the
pharmaceutica changes. medical and legal
l products. pharmaceutica working
l products. hours and
minimum
wage.

Growing Large growth With social Potential Sand storms Changes to

tension of GDP in media usage development caused by consumer
between India India by 6.3% being at an all and deforestation protection

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

and UN between 2023 time high in innovation in and overuse of laws

countries and 2029 India and in the water. regarding
especially forecasted by Europe, automation Especially in the control
Canada which the latest misinformatio process India. of products
could increase WEO report. n and regarding have been
the difficulty conspiracist manufacturing adjusted in
of selling propaganda products. India in
products has grown 2020. These
within these rampant and changes
countries. readily have
available. widened the
scope of the
law to
protect
consumers
more, which
in turn
increases the
difficulty of
operations
for
businesses,
especially in
the
pharmaceuti
cal industry.

Growing The world Since the Artificial Increased In India,

tension economy is 2019 intelligence concern scientific
between India expected to pandemic a use pertaining regarding discoveries,
and UN grow 3% in large to marketing recycling and or anything
countries 2023, which is percentage of and website disposable pertaining to
could lead to half the rate of the working building. products. public
embargoes, the The global class has Affects health can
sanctions, and ophthalmolog moved to packaging. not be
other trade y remote work patented.
restrictions pharmaceutica where they are
that could l industry. In often on their
either restrict 2024 the laptop for
or greatly world prolonged
increase the economy is hours. This
cost of expected to has proven to
production, grow 2.7%, damage and
shipping, and which is down dry out eyes.
distribution. from 2023.

Alliance Asia is the India’s Growing fear An

between largest population and unprecedented
China and contributor to growth rate conspiracies pandemic due to
India could world will reach regarding the thawing of

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

prove to be economic 0.81% in technology the polar caps

detrimental to growth, 2023, almost potentially reviving long
UN member growing at a double the used in/on dead and frozen
companies disproportiona rate of the medical and viruses.
working te rate global pharmaceutica
within India if compared to increase. This l products.
China-Taiwan the rest of the could
relations world. This potentially
continue to could lead to a surge
intensify. introduce new of Indian
Potentially competition or citizens
leading to new prove to assist seeking job
foreign trade in the growth opportunities.
policies, of APP.
increased
corruption,
and new tax
policies.

The Labour Inflation Safety Pressure from

Law Reforms across G20 precautions NGOs to reduce
of India. advanced around the synthetic
Changes in economies, world have products and
labour laws which is been taken chemicals and
regarding largely in more to reduce plastic
wages, Europe and seriously in use in product
working APP’s the workplace packaging.
hours, markets, is since the start
working projected to of the
conditions, reach 2.8% pandemic.
and overtime core inflation This could
pay in India. in 2024. This lead to
will certainly increased
apply to the costs for
supplies and supplies
shipping that amongst other
APP relies on. cost increases.

Ethical and
legal disposal of
chemical waste
in the
production
process of
pharmaceutical
products.

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

2.3. Porter’s Five Forces

Threat of New Entrants
To create medical products a company requires special licensing such as the Medical Device
Manufacturing License that can take years to obtain and requires a renewal every five years. This proves
to be a major barrier of entry for new entrants. In addition to this threat, Real estate in India is considered
to be expensive and only getting costlier. This alone would prove to be a barrier for new entrants in India.
Not only is real estate expensive, but increased wages in India is deterring businesses from using
or creating factories there. Lastly, in the industry of artificial tear drops and over the counter
pharmaceutical products, there is typically low brand loyalty which adds to the threat of new entrants. In
conclusion, the threat of new entrants is relatively low in India, however it is not as difficult in other
emerging markets such as China.

Bargaining Power of Buyers

Artificial tear drops is a large industry that is considered to be fragmented. There are plenty of
substitute products for buyers to switch between, thus providing them with a large amount of buyer
power. Furthermore, the switching cost between artificial tear drops brands is low, even between products
made in different countries. Most of these products have a switching cost range of $3-10 depending on
the brand.
Lastly, customer orders of artificial tear drops are limited, usually to one bottle of 15ml. In some
instances limitations on how many refills or bottles you may purchase at a time are set by the pharmacy
and are two bottles. To conclude what has been stated regarding the bargaining power of buyers, buyers
have a lot of power in the industry.

Threat of Substitute Products

Artificial tear drops in India are relatively inexpensive compared to US made eye drops. Recent
claims from the FDA stating this inexpensive alternative to US made products is linked to deaths and
diseases leading many customers in India and in Europe to use US or Europe made products.
Additionally, There is a very low level of perceived product differentiation in over the counter artificial
tear drops and pharmaceutical products in general. Instances where a customer would have a high level of
perceived product differentiation would be for more steroid based eye drops for cases of glaucoma and
other serious eye disorders. Lastly, the artificial teardrop industry is surprisingly large at USD 2.64B in
2019 and expected to grow to USD 4.30B by 2027. With over 100 artificial teardrop brands in CVS in the
US alone it is certain that there is a high threat of substitute products in this industry.

Bargaining Power of Suppliers

There is little uniqueness between each supplier's product in the artificial tear drops industry.
Where there are small differences it is in the chemical compound which provides the same relief as other
chemical compounds used in artificial tear drops. The differences in these compounds are largely
unknown to the general consumer as very few people are educated in advanced chemistry. That being
stated, the bargaining power of suppliers in this industry is low.

3. Internal Analysis
3.1. Firm Overview
AstraEye Pharma Pvt Ltd is engaged in the ophthalmic pharmaceutical business. It began operations in
Europe in the mid-1980s, and its Indian subsidiary started operations in 2011. Now APP has been
recognized as the best export-oriented pharmaceutical company by the Federation of Indian Chambers of
Commerce and Industry (FICCI) five times in a row for its excellence in the field of human resources and
new product development. Their main business is the artificial-tears segment, featuring Rejuvenate (CMC

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

concentration of 0.5 per cent and 1 per cent) and Fresh (HA concentration of 0.1 per cent). they account
for roughly 80% of total revenues. They account for roughly 80% of total revenues, with the glaucoma
and ocular-nutrition segments making up the rest. The COVID-19 brought about a blockade, but APP's
main business did not take a huge hit, with a shortage of markets for their alternatives, and APP
transitioned its brand direction to a digital-first marketing mix and strengthened its excellent relationships
with trading partners to solidify market share. App's revenues are $3.9 million in 2020-21 and $4.9
million in 2021-22.
Now, APP is considering the growth strategy for its ophthalmic pharma business in India in 2022-23 and
beyond. They aim to have 5% market share in three years and become one of the best ophthalmic pharma
companies in India. In addition, they are also considering continuing to launch new products to better
occupy market share.
3.2. Competitive Advantage
Overall APP has demonstrated competitive advantages: a good and established brand, technological
capabilities for new product development, a stable and reliable supply chain, and a mature organizational
team.
It has an established and trusted brand with a decent market share in the Indian market as well as
guaranteed quality and customer service. According to the VRIO analysis sheet, the competitiveness
demonstrated by APP in Value and Organization will provide the brand with a long-term competitive
advantage.APP should focus more on leveraging its brand and continue to build on the strengths of its
flagship products then considering new products (0.3%-HA Fresh Plus) when developing its strategy. As
it allows the company to produce prescription momentum, build credibility, and establish a competitive
position in the market.

VRIO Competitive Advantage

Value (V) APP has a mature ophthalmic pharmaceutical

business and has maintained steady growth in
market share in India. As the best export-
oriented pharmaceutical company, APP’s
technical capabilities and market share have
brought good brand value.

Rarity (R) The high-level professional R&D team has

good technical capabilities and brings long-
term competitive advantages to APP. Whether
you are improving your flagship product
0.5%-CMC or developing a new product -
0.3%-HA, all will be a good choice.

Imitability (I) Maintaining revenue growth and market share

during the COVID-19 shows APP’s
competitiveness.

Organization (O) APP has a mature organizational team.

Sanders is experienced as a strategic manager
and has the ability to lead team progress and
shape brand vision and strategy. The APP

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

organization has mature marketing strategies

and multiple sales channels to ensure the
market competitiveness of its products. So
this is also their core competitive advantage.
-

4. SWOT
Strengths (S):

1.Mature and trustworthy operations, a good regional brand reputation, and the artificial-tears
segment series of specialty products have a high market share.

2. A strong supply chain allows the company to control costs very well and has not been greatly
affected during the COVID-19 lockdown so it is very stable.

Weaknesses (W):

1.No information was seen on the brand's sales in neighboring countries, with an average
international presence.

2.APP cost control. Their current costs associated with new product development and website
development remain higher than overall expectations.

Opportunities (O):

1.In India, APP has a good sales pipeline, thanks to their focus on serving HCP, patients and inside
salespeople.

2.APP is considering developing an official website or seeking a third-party partner website, which
can bring benefits in today's growing e-commerce world.It will give APP the opportunity to reach a
wider customer base.

Threats (T):

1.The industry as a whole still needs to recover from the systemic shock of the end of the COVID-19
lockdown. Turbulent industry trends.

2.Inevitable competition from other brands and possible price wars.

5. Alternatives, Decision Criteria, and Recommendation

5.1. Decision Criteria

Based on the internal and external risk and opportunity analyses conducted by APP, and in conjunction
with Sanders' planned goals and objectives for the development of the business, the decision criteria can
be broken down into the following four sections:

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

1) Expanding the market share: Sanders aspires to make APP one of the most recognizable
pharmaceutical brands in India as a goal, aiming to expand share and visibility in the Indian
ophthalmic pharmaceutical market for APP as a start-up company in India. Therefore, market share
will be the primary decision metric.:

2) Save of costs: As the global economic downturn due to COVID has forced decision makers to
consider the cost of implementing a strategy, minimizing the cost of consumption is also an important
decision criterion.

3) Customer satisfaction: As a company that specializes in ophthalmic pharmaceutical products,

patient satisfaction is a very important measure when proposing strategies to implement new
products.

4) Sales growth: Sales growth is one of the easiest ways to quantify and visualize the success of a
sales strategy.

5.2. Alternatives

A combination of development objectives and internal and external analysis of the company resulted in
three strategic alternatives, including making artificial tear sales and promotion a primary objective,
creating a digital communication platform for healthcare professionals to use the product for patients, and
increasing the cost of publicity, and strengthening collaboration and linkages with hospitals and clinics.

Alternative 1

The first alternative is to focus major efforts on the development of sales and marketing of artificial tear
products. As the largest segment of ophthalmic pharmaceuticals (29% of the total) and APP's main
product line, the potential for developing artificial tear products as a specialization is unlimited. Targeting
the yet unexplored segment of severe dry eye treatment, APP has launched a new product Fresh Plus for
the treatment and relief of severe dry eye. Market research reveals that APP's new product launch will be
a strong competitor in this market segment.

1) Scarcity of Competitors: Currently, only one brand, Ellora Pharma, has launched a concentrated
product for patients with severe dry eye syndrome. The market segment is still open.

2) Price Leadership: APP's pricing research team has given a maximum post-launch retail price of $5,
which will be more competitive than Ellora Pharma's $5.50 product.

In summary, developing new products to capture the dry eye segment is both cost and benefit
advantageous for APP.

Alternative 2

The second option is to develop APP's own online website to provide a digital communication platform
for senior medical staff and patients, and to publicize and promote ophthalmic medical products online.
Due to the second wave of the COVID epidemic and the third wave of the blockade, online
communication and seeking medical advice became more convenient. Developing APP's own website and
attracting more senior ophthalmology medical personnel to the platform patients to provide assistance can
not only provide more marketing and promotional opportunities for APP, but also provide more
humanized medical consulting services for consumers, which will have a positive impact on the
accumulation of consumer satisfaction and loyalty. However, website development and maintenance will

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

need to face high annual fee costs, as well as obtaining development rights and how to attract HCPs
onboarding will be difficult issues.

Alternative 3

The third option is to increase the cost of promotion and publicity, using multiple channels to promote
products and services. The focus of the enhancement would be on the cost of physician prescriptions. The
benefit of this alternative is that patients can experience whether the product itself is of high quality at the
physician's order in the first instance, and it can be realized more quickly than online advertising and
promotion. However, the cost of expanding only one offline sales channel may not be equal to the return,
and hospitals are not a significant source of sales.

5.3. Recommendation

Taken together and comparing the above alternatives, the strategy of focusing on the development of the
artificial tears product line, marketing and promoting new artificial tears launched for niche markets is the
most desirable. Firstly, APP's artificial tear medicine is a strong competitive product and the main source
of APP's revenue. It also has competitive advantages in product development and production technology.
In the production activities with relatively mature technology, the production cost will also be reduced.
Apart from this, Artificial Tears has a very large market share in the Indian eye care market and can also
be segmented into a variety of different concentrations of artificial tear products used for targeting
different grades of dry eye patients. With its own advantages and favorable market environment, it would
be the best strategy to focus on the development of artificial tears and capture the market share first. Also,
in order to increase awareness of the new product, the APP can develop a marketing strategy such as
finding KOLs to promote the product, roundtable meetings, webinars, brand reminders (literature or
brochures) to promote the product.

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

Implementation Plan

Period Proposed Action

Day 1 - 15 ● Hold focus group of senior medical care staff and understand
their doubts and expectations of the 0.3 Fresh solution.
Afterwards conduct market analytics on main competitors in the
0.3% solution space.
● Begin talks with KoL’s and roundtable focus groups on what to
improve about the formula of artificial tears

Day 16 - 30 ● Create first sample batch of products to be tested and examined

by the KOL’s in the industry to increase word of mouth during
webinars and round table meetings.
● Create research team to implement suggestions from previous
market research from KOL’s.

Day 31 - 45 ● Begin talks with pharmacies to begin putting the product on

shelves and in prescriptions as an over the counter medicine.
● Begin limited distribution of the newly improved artificial tears
to the KOL’s to build repute and rapport to create buzz around
the new medicine

Day 46 - 60 ● Release artificial tears’ improved formula to the general use of

hospitals.
● Release the new fresh plus product to general pharmacies and
begin sales tracking.

Day 61 - 75 ● Review the growth of improved artificial tears in relation to past

projected market share growth.
● Monitor pharmacy feedback on the product and conduct
research on the current market share of Fresh Plus

Day 76 - 90 ● Use market share research to project growth for both Fresh Plus
and improved Artificial Tears to extrapolate their market growth
in the future.

This implementation plan relies heavily on the Research and development of APP and the market
share in conjunction with the good reputation that Artificial tears already has as a market leader. This
allows the costs of the research to be buttressed by the existing product’s dominance and provides
APP with security to fall back on in case there are any delays or unforeseen costs. This added
flexibility created by their situation will help to ensure the success of this plan.

Control Measures
The control measures we will be using to measure success will be tracking the market share of the
artificial tears and profits gained from the improved formula, while tracking the sales growth for the
new fresh plus product. These control figures will help to show where the growth is in the company
as well as the number of mentions the new product in conferences and

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

Contingency Plan.
Contingency will be to use the established market for artificial tears as a buffer for any failures with
the product launch of fresh plus. In the event that fresh plus should fail the company will re allocate
resources into the marketing and improvement of the artificial tears to further capitalise on the
dominant market share already held by APP. This will allow the artificial tears product to continue
gaining dominance from it’s headstart while giving APP time to reassess it’s position. By improving
the marketing and formula for Artificial Tears there will still be a feeling of progression and
improvement with KOL’s so they are discouraged from being tempted by possible new entrants or
competitors.

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MGMT 7023 21F – Management Fundamentals Case Study Assignment Guide

JONS SOURCES:
UNEP (United Nations Environment Programme). (2023, July 11th). Climate Changes and Sand Storms
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communities#:~:text=Yes.,temperatures%20%E2%80%93%20is%20amplifying%20these%20factors.

Ministry of Labour and Employment, Government of India. (2020). Labour Law Reforms. Retrieved from
https://labour.gov.in/labour-law-reforms

OECD (Organisation for Economic Co-operation and Development). (2023). Economic Outlook:
September 2023. Retrieved from https://www.oecd.org/economic-outlook/september-2023/

European Patent Office. (2023). General Information About Patents in India. Retrieved from
https://www.epo.org/en/service-support/faq/searching-patents/asian-patent-information/india/general-
information-about-3

BBC News. (2023, April 4th). Global Pharma: FDA says India firm linked to US eye drop deaths broke
safety norms. BBC. https://www.bbc.com/news/world-asia-india-65171851

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