Page 84 - DMGT554_RETAIL_BUYING

Unit 6: Market Specialist

Notes
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Caselet OldPharm

ldPharma has a long, successful tradition in researching, developing, and selling
“small molecule” drugs. This class of drugs represents the vast majority of drugs
Otoday, including aspirin and most blood-pressure or cholesterol medications.
OldPharma is interested in entering a new, rapidly growing segment of drugs called
“biologicals.” These are often proteins or other large, complex molecules that can treat
conditions not addressable by traditional drugs.
Biological R&D is vastly different from small molecule R&D. To gain these capabilities,
pharmacies can build them from scratch, partner with existing startups, or acquire them.
Since its competitors are already several years ahead of OldPharma, OldPharma wants to
jump start its biologicals program by acquiring BioFuture, a leading biologicals start-up
based in the San Francisco area. BioFuture was founded 12 years ago by several prominent
scientists and now employs 200 people. It is publicly traded and at its current share price
the company is worth about USD 1 billion in total.

OldPharma has engaged McKinsey to evaluate the BioFuture acquisition and advice on its
strategic fit with OldPharma’s biologicals strategy.

Source: http://www.mckinsey.com/careers/apply/interview_tips/practice_case_studies/practice_
case_-_oldpharma

Self Assessment

Fill in the blanks:
5. ................................... is the process of communicating the value of a product or service
through positioning to customers.
6. Understanding the retail ................................... plays an important role in the success of a
retail store.

7. Under ................................... analysis, the retailer classifies customers on the basis of their
age, sex, education, income, etc.
8. Geographic analysis allows the retailers to understand the buying ...................................

6.3 Retail Market Specialists

The importance of formulating a retail strategy is understood by all small and big retailers. To
build a competitive advantage that can be sustained, retailers need to pay special attention to
aspects like price, location, merchandise, service and communications. Operations, purchasing/
logistics, market research, financing and technology, which determine the strategic positioning
of the firm are also equally important. In this unit, we discussed how each of these factors affect
the firm’s image. To utilize the limited human, financial and physical resources optimally,
retailers should have a well-planned strategy. Thus, retailers should follow a systematic step-
by-step planning process for formulating and implementing the strategy. Periodic reviews and
evaluations will help the retailer to take corrective actions either by replanning the strategy or
by implementing it more effectively.

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