Final report

NOVARTIS

CH-4002 BASEL SWITZERLAND

41613241111

41613248001

1 2 / 2 0 / 2 0 1 2

ANUM ZAHRA 134

SUBMITTED TO

SIR ABDUL KHALIQ

1

ABSTRACT

Medicine is incredibly important to us we need medicine

because that it helps to maintain or restore our health prevent of

disease, injury and other damage to our body or mind.

Medicine can cure illness, boost immunities, provide extra

nutrients and vitamins that the body can't produce or consume

on a daily diet and Novartis is one of the best pharmaceutical

company which have its business in 140 countries and this

report contains mission , vision ,offices detail , check list for

cooperate strategies , flow of productivity , detail of products ,

customer contact matrix , product matrix , culture of

organization , competitive advantage , training methods ,

success stories and swot analysis of the Novartis pharmaceutical

company .Novartis is the only pharmaceuticals producer that has

considerable competitive advantages in key industry success

factors such as R&D ,competent employees ,financial

strengths ,marketing & sales & organizational efficiency.

2

TABLE OF CONTENTS

Introduction

Background of Novartis……………………………………………………..3

Purpose ……………………………………………………………………...4

Scope………………………………………………………………………...4

Method used…………………………………………………………………4

History……………………………………………………………………….5

Mission & vision…………………………………………………………….6

Offices of Novartis in Pakistan……………………………………………6-7

List of competitors…………………………………………………………...8

Body

Fishbone diagram ……………………………………………………………9

Histrogram………………………………………………………………10-11

Checklist for the cooperate strategies………………………………………12

Products……………………………………………………………………..13

Products in Pakistan………………………………………………………...14

Customer contact matrix…………………………………………………….15

Product matrix……………………………………………………………….16

Productivity flow chart………………………………………………………17

Culture of organization………………………………………………………18

Competitive advantages……………………………………………………...19

Training undergone ………………………………………………………….20

Success stories……………………………………………………………21-27

Failures/threats……………………………………………………………….28

Conclusion……………………………………………………………...29

Recommendations……………………………………………………..30

Bibliography……………………………………………………………31

Glossary……………………………………………………………..31-32

3

Introduction of Novartis

Novartis have diversified portfolios ALCON (EYE CARE) ,SANDOZ(GENERICS)

, SELF CARE PRODUCTS , VACCINES & DIANOSTICS AND ANIMAL

HEALTH CARE is a world leader in the research, development, production and

marketing of self-care products. Products are designed for in-home treatment of

medical conditions and ailments to help improve people’s ability to live the healthy

lives they want for themselves and their families. NOVARTIS have a robust portfolio

of cough, cold, respiratory disease treatments, digestive health solutions and pain

management medication as well as skin care products, smoking-cessation therapies

and mineral supplements.

BACK GROUND

Novartis International AG is a Swiss multinational pharmaceutical company based

in Basel, Switzerland, ranking number two in sales (46.806 billion US$) among the

world-wide industry in 2010 and employs 96717 people.

It is engaged in the research development, manufacture ,marketing of branded drugs

generic pharmaceutical products ,preventive vaccines, Diagnostic tools & consumer

health products. The company operates in more than 140 countries across the globe.

Novartis manufactures such drugs as clozapine (Clozaril), diclofenac

(Voltaren),carbamazepine (Tegretol), valsartan (Diovan), imatinibmesylate and

(Gleevec / Glivec). Additional agents include cyclosporin (Neoral / Sandimmun),

letrozole (Femara), methylphenidate (Ritalin), terbinafine (Lamisil), and others.

Novartis is a full member of the European Federation of Pharmaceutical Industries

and Associations (EFPIA) and of the International Federation of Pharmaceutical

Manufacturers and Associations (IFPMA).

4

PURPOSE

The purpose of report is to get information about Novartis

pharmaceutical company which is working in 140 countries.

The report covers the company’s structure, operation, SWOT analysis, product and

service offerings, sales, and corporate stretegies, providing a 360° view of the

company

Scope

This report contains following information

Provides detailed information on Novartis AG required for business and

competitor intelligence needs

Contains a study of the major internal and external factors affecting Novartis

AG in the form of a SWOT analysis

Offers an in-depth view of the business model of Novartis AG including a

breakdown and examination of key business segments

Contains five-year financial information and charts of Novartis AG.

Provides intelligence on Novartis AG’s mergers and acquisitions , strategic

partnerships and alliances.

Captures the latest news about Novartis AG, such as business expansion,

restructuring, and contract wins Highlights:

This report includes Novartis AG's business description, segment overview,

company history, products and services, SWOT analysis, 5-year sales and

management , key executives and biographies, key

METHOD USED

Background research

Like an information scan, background research can involve a number of things:

- Online research; - Speaking to experts who give an overview of topic;

- Reading various literature

5

History

Novartis pharmaceutical is established in 1996.The history of Novartis traces back to

three companies

Geigy Pharmaceutical

Ciba pharmaceutical

Sandoz pharmaceutical

Giegy whose origin goes back to the middle of the 18thcentury.

CIBA founded around1859and Sandoz established in 1886In1970 CIBA and Giegy

merged .the newly created CIBA-Geigy ltd and Sandoz continued to follow separate

path for two and half decades In1996 Sandoz and CIBA- Geigy joined to form

Novartis pharmaceutical.

6

NOVARTIS PHARMA PAKISTAN

Head Office

Novartis International AG

CH-4002 Basel Switzerland Tel: +41 61 324 11 11Fax: +41 61 324 80 01

Head office in Pakistan

Novartis Pharma (Pakistan) LTD.

15 West Wharf Road, Karachi 74000, Sindh, Pakistan

Phone:

9221-2313389 / 2316286 / 2313387 / 2313390

Fax:

9221-2310241

Mission:

We want to discover, develop and successfully market innovative products to prevent

and cure diseases, to ease suffering and to enhance the quality of life. We also want to

provide a shareholder return that reflects outstanding performance and to adequately

reward those who invest ideas and work in our company.

Vision:

We want to discover, develop and successfully market innovative products to prevent

and cure diseases, to ease suffering and to enhance the quality of life. We also want to

provide a shareholder return that reflects outstanding performance and to adequate

those who invest ideas and work in our company.

Sector Head

Farhan Baider Malik

15 West Wharf Road, Karachi 74000, Sindh, Pakistan

Phone:

9221-2313389 / 2316286 / 2313387 / 2313390

Fax: 9221-2310241

Managers Khalid Ashraf (National Sales Manager)

Moiz Haider(Brand Manager)

7

Zubair Ahmed(Training Manager)

Ali Imran (Human Resource Manager)

Moin Khan (Factory head)

Regional Sales Managers

Tuyyab Nazir Lahore

Mujeeb Alam Multan

M Shakeel Karachi

Arshad Iqbal

Islamabad

Zonal Sales Managers

Lahore

Muhammad Zeeshan Altaf M. Sohail Aslam

Faisalabad

M. Ejaz Qamer Shahzad Ali

Islamabad

Naveed Basheer Ikram Ulah Khan M.Usman

Multan

Shahzad Jamil Ghazanfar Aziz Ghauri Qamar Zaman

Gujranwala

AbaidurRehman

Sukhar

Imtiaz Soomro Abdul Hameed

Karachi

Faizan Ur Rehman Syed Ather Hussain Asif Ali Khan

Hyderabad

Jawaid Jabbar

Syed Shoaib Hussain

Naveed Farooque

8

LIST OF COMPETITORS

9

FISH BONE DIAGRAM REGARDING ISSUES OF PRODUCTIVITY

DIVERSIFICATION

INOVATION

PRODUCTIVE EFFICIENCY

Work force

Quality

Technology R&d prog

Pipeline industry

Bonuses & benefits

Continuous training

Proved by FDA

Pipeline industry

Harmless drugs

R&D prog

Diagnostic tools & capital

10

GRAPH OF PRODUCTIVITY

1 2 3 4 5 6 7

7568600 7266120 7459640 7735281

69100007248552 7148352

2006 2007 2008 2009 2010 2011 2012

SALES YEARS

SALES YEARS

7567800 2006

7266120 2007

7459640 2008

7735281 2009

6910000 2010

7248552 2011

7148352 2012

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UNITS PRODUCED CO DIVON YEARS2000 20071800 20081850 20091900 20102050 20112100 2012

1 2 3 4 5 61650

1700

1750

1800

1850

1900

1950

2000

2050

2100

2150

UNITS PRODUCED CO DIVONYEARS

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CHECK LIST OF CORPORATE STRATEGIE

R &D PROGRAM IN INDUSTRY

DIVERSIFIED HEALTH CARE PORTFOLIO

GROUP WIDE PRODUCTIVITY INITIATIVES

BROADER PORTFOLIOS TO MEED DEMAND

FOCUSED SOLELY ON HEALTHCARE

INNOVATION

GREATER EMPHASIZE ON PRODUCTIVITY

STRONG CASH FLOW RETURNS

REINVESTMENT FOR FUTURE GROWTH

SHARE HOLDER RETURNS

REINVEST INTO INNOVATIVE PRODUCTS

GAIN GREATER OPERATING LEVERAGE

CONTINUED INVESTMENT IN R&D

improve efficiency in manufacturing, sales, marketing and procurement

Giving bonuses to employees on annual basis

Every step is taken according to the planning

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Pharmaceuticals Products OF NOVARTIS

Name Indication(s) or drug type/classAfinitor Organ transplants and cancers

Comtan Parkinson's disease

Diovan Hypertension

Exjade Ironchelator

Femara Breast cancer

Focalin AD/HD

Galvus Anti-diabetic medication

Gleevec Chronic myelogenous leukemia

Lescol hypercholesterolemia

Lotrel Hypertension

Lucentis Age-related macular degeneration

Ritalin AD/HD

Exelon Alzheimer's disease

Sandimmune and Neoral Organ transplantation

Sandostatin Acromegaly

TasignaChronic myelogenous leukemia (CML); first line

treatment of CML[29]

Tegretol Epilepsy

Termalgin - (Paracetamol and

compounds.)Treatment of fever and light pain.

Tobramycin Cystic fibrosis

Trileptal Epilepsy

Voltaren anti-inflammatory

Zometa Cancer complications

Tofranil antidepressant

PRODUCTS AVAILABLE IN PAKISTAN

➢TAB MEPRESSOR 100 MG

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➢TAB MAPRESSOR 200 MG

➢TAB VOLTRAL 50 MG

➢TAB VOLTRAL 100 MG

➢TAB TEGRAL 200 MG

➢TAB TERNALINE 2 MG ,4 MG

➢TAB ANNUVA 50 ,100 MG

➢TAB HYDERGINE 4.5 MG ,1.5 MG

➢HYDERGINE SYRUP

➢CAC 1000

➢ INJ SANTOCINON

➢INJ METHERGIN

➢DIOVAN 160 MG , 320 MG

➢CO DIOVAN 160/25 MG

➢GALVUS 50 MG

➢GALVUS MET 50/500MG

➢GALVUS MET 50/1000MG

Customer contact matrix

less customer contact & customization

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There is less process divergence & more line flows vertically

PRODUCT MATRIX

less customization & higher volume

less divergence & more line flow vertically

PROCESS CHARACTERISTICS

High interact Some interact Low interact

Flexible flowFront officee.g medical stores

Flexible flowMedium flexibility

Hybrid officee.g distributers

Lowest complexibility Back officee.g company

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Process characteristics

Low volume products

Multiple products with low to oderate level

Few major products

High volume high standardization

Customized process with flexible and unique task

Job processe.g DIVONFor Heart failures

Disconnected line flows moderately repetitive work

Batch process1.smalle.g ANNOVA2.largee.g MEPRESSERGeneral blood pressure

Connected line highly repetitive work

Line processe.g ELGINmultivitaminvitamin B 12

Continuous flow Continuous flow processe.g VOLTRALpain killer

PRODUCTIVITY FLOW CHART

CO-DIVON

17

no

yes

Culture of the organization

Culture and values

At Novartis, our performance-oriented culture and responsible approach are

the foundations of our success. We recognize that our business depends on the

PROPER MIXING OF valsartan & hydrochlorothiazide

Stop the production

Analyse the problem

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creativity,

dedication

performance of our associates. We encourage associates to focus on

achievement through

collaboration and innovation.

A pipeline of innovative medicines brought to life by

diverse

talented

performance driven people. All of which makes us one of the most rewarding

employers in our field.

Diversity and inclusion

Novartis is committed to equality of

opportunity

fairness

work

lifestyle

mutual respect

dignity at work for all associates.

Novartis values differences including disability, sexual orientation, race,

ethnicity, age, thinking styles, gender and religion.

Inclusion establishes and reinforces behavioural standards that foster a collaborative

culture and work environment, which will enable individuals and groups to contribute

to their fullest potential. Diversity and Inclusion adds value for our company,

patients customers associates shareholders suppliers & the communities in which we

live and work

COMPETITIVE ADVANTAGES IN PAKISTAN & INTERNATIONALY

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Strengths

STRENGTHS

Market leader

Strong cns image of Novartis

Strong brand image heritage valuation

High acceptance of carbamazepine a anti epileptic

FDA approved

Effective in multiple indications

First line , first choice therapy

More COMPETITIVE ADVANTAGES

VACCINES BUSINESS SHOWCASING

LEADING PIPELINE INDUSTRY

INNOVATIVE MEDICINES

17 VACCINES CANDIDATES IN VARIOUS PHASES OF CLINICAL

DEVELOPMENT

COST-SAVING GENERIC PHARMACEUTICALS

PREVENTIVE VACCINES

DIAGNOSTIC TOOLS

CONSUMER HEALTH CARE PRODUCTS

LOW COST QUALITY MEDICINES

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FAST GROWING SEGMENTS OF HEALTHCARE.

CORE COMPETENCIES IN SCIENTIFIC DISCOVERY AND

DEVELOPMENT TO CONTINUE DRIVING.

INNOVATION.

GROWTH

TRAINING UNDERGONE

Learning at Novartis

“If we can transform ordinary people into extraordinary people to achieve

extraordinary things, then we really have fulfilled the leadership challenge.”

Dr. Daniel Vasella, Chairman of Novartis

Our executive programs are developed in close cooperation with the world’s leading

business minds – professors and learning consultants from world-class institutions

such as Harvard Business School, Stanford, IMD, Tuck, Babson and others.

Proven learning methods encourage participants to discuss their own real business

issues, exchange ideas and solve problems. Custom-designed corporate programs

bring together executives from all over the world to build the necessary skills,

informal networks, insight and teamwork essential for success.

The programs take place in a learning environment that stimulates collaboration and

sharing of ideas and builds strong personal and professional bonds among Novartis

leaders.

Novartis Pharmaceuticals conducted seminars to educate staff about their benefits

packages

Success stories

Rankings and awards

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Novartis is honored to receive numerous awards for progress in research and

development, our working environment, and our corporate responsibility activities.

SCRIP awards 2012

Novartis awarded two of the prestigious SCRIP Awards for excellence in innovation

and R&D

Newsweek 2012 Green Rankings

Novartis is the greenest healthcare company worldwide

2012/13 Dow Jones Sustainability World Index

Novartis is a member of the 2012/13 Dow Jones Sustainability World Index, which

recognizes the leading sustainability-driven companies worldwide.

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MedAdNews

Novartis named “Most Admired Pharmaceutical Company 2012” for the 4th

consecutive year.

Science’s 2012 Top Employer

Novartis ranked no. 11 on Science’s Top 20 Employers list.

Eurobrand’s Global Top 100 Brand Corporations

Novartis brand ranks no. 39 globally and no. 2 in Switzerland.

2012 Working Mother’s 100 Best Companies

Novartis Pharma US named one of the best employers for working mothers.

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Universum’s World’s Most Attractive Employers

Novartis named one of the top 50 most attractive employers worldwide for

engineering students by Universum.

Swiss Graduate Barometer 2012 – Handelszeitung

Novartis ranked most popular employer in healthcare by Swiss students in Swiss

Graduate Barometer.

European Graduate Barometer 2012 – Frankfurter AllgemeineZeitung

Novartis enters the list of the 50 preferred employers among European Engineering/IT

students.

24

Transparency in corporate reporting: Assessing the world’s largest

companies

Novartis named the most transparent large healthcare company by Transparency

International

2012 Ethical Corporation Awards

Novartis wins Ethical Corporation Award for Best Corporate/NGO Partnership for

SMS for Life

World’s Most Respected Companies 2012 by Barron’s

Novartis ranks again as the most respected healthcare company in “The World’s Most

Respected Companies” by US business magazine Barron’s

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Top Employer in Switzerland 2012 by Universum /Bilanz

Novartis again ranked No. 1 employer in Switzerland for students in Natural Science

by Swiss business magazine Bilanz and Universum

Computerworld’s 21st Century Achievement Awards

SMS for Life has been honored with the 21st Century Achievement Award in the

Innovation IT category of the 2012 Computerworld Honors Program. This award

recognizes organizations that promote and advance the public welfare, benefit society

and change the world for the better through a visionary application of IT.

Bilanz magazine Sustainability Ranking 2012

Novartis again ranked as a top sustainability performer

The Scientist’s Best Places to Work: Industry 2012

Novartis again among top 20 companies globally climbing one spot to No. 17.

Pharmaceutical Executive “PharmExec 50”

For the second time, Novartis is No. 2 in PharmExec's 2012 ranking of the top 50

pharma companies based on Rx sales.

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FT Bowen Craggs Index 2012

Bowen Craggs ranks Novartis No.8 in its 6th annual index of corporate web

effectiveness, making it the second healthcare company on the list.

Interbrand’s “Most Valuable Swiss Brands 2012”

Novartis named #3 Most Valuable Swiss Brand 2012 by Interbrand/Bilanz with a brand value of CHF 6.8 billion.

Brand-Finance’s Top 500 most valuable global brand 2012

Novartis ranked as one of the "Global 500 most valuable brands" and one of the top

brands in the pharmaceutical/healthcare sector.

Novartis CEO Joseph Jimenez receives “CEO in Action” award

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Novartis CEO Joseph Jimenez receives "CEO in Action" award for commitment and

engagement in Novartis Diversity & Inclusion initiatives.

Fortune’s World’s Most Admired Companies 2012

Novartis again ranked top pharmaceutical company in Fortune's World's Most

Admired Companies 2012

SAM Sustainability Yearbook 2012

Novartis awarded Gold Class Medal in SAM's 2012 Sustainability Yearbook.

ONE MORE STORY ….

ALCON EYE CARE

Transforming lives through better vision

Since its inception, Alcon has focused on developing innovative eye treatments. Alcon offers a broad range of products to treat many eye diseases and conditions and is organized into three business franchises: Surgical, Ophthalmic Pharmaceuticals and Vision Care

28

FAILURE / THREATS IN PAKISTAN AND INTERNATIONALY

WEAKNESSES

&

THREATS

WEAKNESSES

Only one formulation is available No formulation for children Mostly under dosage is recommended Lack of resources to top attractive

opportunities

EXISTING THREATS

High share of voice of customers Increased penetration of low cost generics

in institutions Rapid growth of below the line & direct to

consumer advertising Increasingly high acceptance of valproates

THREATS

Patent expiry for diovan/co-diovan franchise In 2011/12 longer term risk of patent expiry for Gilvac ( in 2015)

Considerable risk of late stage pipeline attrition ,heightened by these products accounting for significant proportion of 2013 forecast sales

POTENTIAL THREATS

Intro of new molecules Compliance is low

ENTRY/EXIT INTO THE INDUSTRY

Increase in number of neuro science Competitive products Consumers have been offered more

choices

WEAKNESSES Failure of galvus to position NOVARTIS

in DIABATES market

29

Conclusion

It is concluded from the report that,

The external business environment analysis revealed that Novartis benefits from a

growing global pharmaceuticals market. Growth is caused by new emerging

markets ,aging global population and more diseases caused by changing lifestyles. On

the other hand, governments put increasingly pressure on pharmaceutical companies

to lower prices and increase drug availability. In terms of sales and market share,

Novartis is currently one of the top five largest pharmaceuticals producers in the

world with a market share of about 5%.From the internal analysis it can be concluded

that Novartis has an attractive, diversified and rejuvenated product portfolio with

many recently launched new products that are still in the introduction and growth

phase, making Novartis less reliant on Diovan. It is noteworthy that Novartis is the

only major pharmaceuticals producer that also has the capability to market generic

drugs. This might become more important in the future as governments around the

world try to lower health care.This might become more important in the future as

governments around the world try to lower health care costs. The analysis also

showed that Novartis has considerable competitive advantage in key industry success

factors such as R&D, competent employees, financial strength, marketing and sales

and organizational efficiency. This is vital for Novartis to maintain its strategy of

developing new and effective drugs and while focusing on growth areas in the

pharmaceuticals industry , competent employees, financial strength, marketing and

sales and organizational efficiency

30

RECOMMENDATIONS

TO OVERCOME THREATS

Formulation should be introduced for children & young adults

Promotional strategies to create awareness & increase mind share

Promote kols to the number of patients

Optimise the loyalty base of tegral users

Switch epival users to tegral

Low dosage range extension should be introduced

In the regions other than Karachi ,Lahore &Peshawar distribution should be made

more extensive to increase availability

More agents should be contacted

Management should strategies their aims to retain their sales force through

benefit planning & incentives.

To overcome weaknesses

Conduct seminars &workshops to train GPS global positioning system about

epilepsy &the usage of tegral

Treatment gap should be reduced by awareness programs in rural areas

Cost-plus pricing should be practice for new molecules exposure & regulations for

safety should be enhanced

Local firms desirous of export , buy lacking necessary export structure.

To achieve the opportunities

Capitalize on strong CNS frenchise

Patient evaluation programs

Keep (key experts evaluation programs pain full diabetic NEUROPATHIES for

30 physician

BOC 2 programs for 30 doctors each for PDN

Epilepsy project

CME (continuing medical education) programs for family physicians

Only 28 epilepsy camps are organised so far

31

Neuroscience summit : patent evaluation programs for major brands of

NEUROSCIENCE .

Total35 top kols (autoimmune diseases) from NEUROLOGY & PSYCHATRY.

BIBLIOGRAPHY

WWW.NOVARTIS.COM

YOUSIGMA-WEB’S MOST EXTENSIVE RESOURCE FOR

INFORMATION

DR.M.QASIM AWAN

PHARMA-D.R.PH

EX.HOSPITAL PHARMACIST SHAUKAT KHANUM

MEMORIAL CANCER HOSPITAL LAHORE.

Master Thesis

MSc in Finance & International Business

A Valuation of Novartis including a Real Option

Analysis Based on a Drug R&D Project

Academic Advisor: Peter Løchte Jørgensen (PhD)

Århus School of Business

September 2010

March 2011 pdf report by heif financial officer of Novartis

By JONATHAN SYMONDS

Report about Novartis published by MIRZA ABBASS

GLOSSARY

Generic drugs

A drug which is produced & distributed with out patent protection

Epival

Valproate semi sodium

CNS

Central nervous system

PDN

32

Potential indifferent indications

Neuropathies

Any pathology of the peripheral nerves

Pipeline industry

Discovery &new developments

Epilepsy

Disorder of nervous system

FDA

Food & drug administration

Ophthalmology

Is the branch of medicine that deals with the physiology &

diseases of the eye.

Immunities

The ability to resist a particular toxin by the action of specific

antibodies.