Are You Fully Exploiting Your Unique Competitive Advantage?

Some company related examples we see repeatedly are:
    •    Pfizer – who often do an outstanding job of tying whatever their drug is superior on to efficacy;
    •    Sanofi-Aventis – who are always able to consistently sweat the clinical data to maximum benefit and turn a small molehill of data into a perception of a mountain of data;

What is your unique competitive advantage?

You could have a positional advantage – maybe you have the only drug that treats the condition; or you might have a strong patent and no one can come near your drug legally. Sometimes companies get good at combining activities that synergistically create a superior advantage, and one that is harder to copy.
One interesting example outside of Pharma is Aldi, a discount supermarket chain. They have more than just a discounted price in their strategy. They sell most products you would find in a normal supermarket but instead of selling 30 000 or so products, they only have 1500, all of which are their own brand version of the product. In addition to that, they have created efficiencies to reduce or eliminate other costs, such as shelf stacking.
Other supermarkets try and do parts of this model but cannot completely copy it as they have very different businesses in place, which is making Aldi a difficult success story to duplicate. Its sales were up by 30% in the middle of the recession, profits up 5 times, and most of this came from increased sales at their existing stores rather than new store openings…and that was in 2011. In 2012 it grew that much in the first 3 months! Their positioning with regard to their high quality and low prices plus a very lean business model has been a winning strategy for them. Food for thought for Pharma companies who are not able to achieve these kinds of results.

Is Your Strategy Targeted on a Specific Market or Segment?

Is your target group segmented to its full capability? Unfortunately, we often see targeting based on the companies’ organizational charts, and that can reduce the potential result. If we look at non-Pharma sectors, one company was able to grow dramatically; if you looked in more detail at why, you would notice that a large amount of this was due to both detailed granular analytics on their customers as well as a focus on a particular fast growing city and fast growing segment.

If we equate that to Pharma, what is a fast growing region? China, off the top of my head, fits this description. And diseases? Again, off the top of my head, lung cancer. Yet, although most Pharma companies talk about their emerging market strategies, marketing executives in fast growing disease areas in China appear to have disproportionately small budgets compared with some of the other slow, non-growing markets. Just to clarify…understanding your markets and segments, defining them correctly, and equipping them with the resources they need, is critical to growing your sales and profit.

Is Your Strategy keeping you on Top of Any Emerging Trends?

The reason this springs to mind is because I was at a Pharma conference in early 2012 and a presenter discussed this topic and gave an example of Kodak as being an innovative company, so much so that they had a Chief Innovation Officer. Within days after the conference, it was announced that Kodak were filing for chapter 11 bankruptcy protection. It seems they failed to keep up with what was going on with phone digital cameras and were slow to move to the digital era. Presumably they appointed the Chief Innovation Officer a little too late. They are still in business, having a court approved financing in January 2013 for the company to emerge from bankruptcy by mid 2013. However, it just goes to show that no matter how big and successful a company you are, if you fail to notice the changes in the world around you and doggedly stick with what you have always done (as Kodak had been doing), then the world will continue to change and you may not be a part of that change.
Many trends often emerge slowly, but when they do, strategies often ignore them; however, when the trend grows to a point that it hits profits negatively, then it is often too late to respond effectively. Analyze trends carefully (for example, the ageing population in Japan, if this has any bearing on your brands). Think this through to its logical implications for your company. What customer behaviors may change as a result of this, which drugs will become bigger sellers in that group, which drug lines will reduce in sales, what is the expected effect on the profit and loss, and how does that line up with the current investment priorities? Food for thought.

Is Your Data Just Data or is it giving you Critical Insights?

Everyone has data, lots of it. Companies have ATUs (Awareness, Tracking, Usage) coming out left, right and center. This makes people feel comfortable that they know everything they need to. Nevertheless, a lot of this is ‘just data’ – nothing unexpected, all behaving as you would anticipate, nothing to make you think ‘Eureka!’ Applying good analytics to data, however, can yield unexpected and critically important results….and results that are unexpected can be very powerful.

When we run analytics, much of what we find is to be expected; nevertheless, there is always some nugget or two that the marketing teams are amazed by and it helps them reformulate their strategy for powerful results. The unexpected results are often the most useful in initiating change. Developing these insights is not always easy. In fact, I would say that this is where many companies fall short. One aspect to guide you is what our analysts do when examining the results from the analytics projects: they create a list of questions, the answers to which would be of vital importance to your results, and when examining the questions and answers, they also look at the data and the assumptions behind the strategy. Do they still fit the current market?

Also, don’t just buy the same reports that everyone is buying. Collect data, conduct analytics that are focused on your specific questions. In fact, finding new ways to analyze data is also a very powerful tool. One of our clients was using one of our algorithms to look at a problem they had in a new light, and the result involved them redoing their entire strategy model in that market – with exceptional results. Many marketing breakthroughs have been based on solving old problems with an entirely new approach due to some data being analyzed in a different way and a new insight being found.

Does Your Strategy Allow for Predictable and Unpredictable Market Changes?

A client asked us to model all their drugs in 5 countries based on all expected (e.g. patent expiry, new competitor entrants, etc.) and unexpected (e.g. adverse events coming to light or an earthquake causing a supply chain breakdown) market events. Ensure that you are prepared for everything! I am not saying become a Doomsday prepper. I am saying conduct analytics to ensure that, come what may, you have the tools at your disposal to respond rapidly.

Understanding what uncertainty you face begins by knowing what variables can change that would have an impact on strategic decisions. Collecting data and putting that into analytics then allows you to model your response in that market or region as soon as you know something is about to happen, or has already happened.

Do You Have Both Elasticity and Rigidity in Your Strategy?

A healthy combination of these 2 elements is required. They need to be traded off against each other, depending on what is happening. Rigidity is important, but in strategy – as in life – timing is everything. You don’t want to commit to a strategy too early before you have all the analysis in hand. However, you also don’t want to be too late to commit to a strategy or you may miss the boat (as in the Kodak example I mentioned earlier). Focus on a few critical, high commitment decisions but allow flexibility in some of the other choices that need to be made. Therefore, perhaps first focus on some large, long term commitments (e.g. genomics), then some moves that will pay off over time no matter what, and next concentrate on some lower cost options that may pay off and can be elevated up as needed.

Have You Included Any Bias?

You may believe you have an unbiased, winning strategy when you actually don’t. This may be because things beyond your control change, or perhaps you had some biases you were not willing to admit to yourself. I have always found it fascinating how we, as human beings, weigh a combination of rational and emotional factors in making a decision, but we like to believe that our decisions are entirely rational. We will tell ourselves whatever we have to in order to ensure that we stick to our rational decision making.

Interestingly, some of the traits of the brain that work for us in our personal interactions actually work against us in business. A prime example of this is being overly optimistic or believing way too much in our own forecasts. Another example is confirmation bias, in which we place more emphasis on information that confirms our opinions and ignore data that does not. There is also champion bias, which is deciding how much merit an idea has depending on who put it forth. There are many more biases but all I want you to do is be aware of the possibility that because you are a human being, you have biases…so be alert for them in your strategy.

Will This Strategy Ensure You Beat the Market and Get To Being Market Leader?

The enviable position of market leader is not always the product of a strategy. There are many events contributing to the results; some can be completely random and nothing to do with your strategy (e.g. your key competitor develops a safety issue and withdraws from the market). In order to beat the market, your product must be perceived to have strong advantages, although weaker products can sometimes win the war when they change their strategy.

Do you have an Action Plan with Time Lines and Added Accountability for Each Item?

Once you have a strategy in place, you need to move into detail about how to fully implement the new strategy. You need an action plan. Your team needs to know what to do, when and how. And while you are at it, don’t forget your budget is allocated appropriately for your new strategy. Easy if you are using Eularis’ Accelerated Growth Program Analytics! However, if not, think this through also. You need to know that the most generous budgets are placed where they are going to give the company the most return. By ensuring that you get this right, the return will be worth it.