Creallaborations: Pharma Starts Thinking Outside the Pill Box

Aug 01, 2012

Stan Bernard
Previous columns in this series have underscored how the industry's transition into the competitive stage of its lifecycle has changed virtually every aspect of pharma's traditional business models. Despite this transition into an entirely new era, many companies continue to use old business models to compete, including "customer-centric" regional sales realignments; hasty, belated initiatives to tap opportunities in emerging markets; and endless corporate level reorganizations. These attempts routinely fail because companies have been slow to recognize that new competitive models—not new commercial ones – are critical to winning in this time of market churn.

However, there are a few truly pioneering companies who are thinking outside of the (pill) bottle by initiating creative competitive collaborations, or what I term "creallaborations." Creallaborations can be defined as potential game-changing partnerships with non-pharmaceutical organizations that complement, enhance, or help a pharmaceutical company reshape its competitive landscape or achieve breakthrough results. These alliances confer unique competitive capabilities or advantages that the company could not obtain internally, through unique expertise in efficiencies, processes, relationships, or technologies.

The GlaxoSmithKline (GSK) partnership with the McLaren Group and the Teva-Proctor & Gamble joint venture are two recent examples which highlight the benefits of such creallaborations. With dramatically increasing competition and payer pressures, GSK realized that it could no longer depend solely on its traditional marketing prowess to gain competitive advantage. The company identified three new "winning market factors" essential to competing in the future: speed to market, market adaptability, and cost efficiencies. GSK then identified a potential partner which excelled in all three areas: the McLaren Group, a leading global Formula One racing car company. In September 2011, GSK CEO Andrew Witty announced a five-year partnership with McLaren to help GSK "innovate and rapidly respond to change and competitor activity...This partnership is another example of GSK looking outside its sector for inspiration and fresh perspectives on how we can achieve our strategic goals."

McLaren is recognized for high-speed, results-driven race car performance based on real-time monitoring, sophisticated system analytics, and flexible, just-in-time decision-making competencies. McLaren has used such engineering and technical expertise to simulate, monitor, assess, and enhance the performance of every single component within its cars during a race. In fact, McLaren's supercomputers can process telemetric data simultaneously from over 3,000 Grand Prix car races.

GSK plans to apply this powerful technology to significantly improve its global efficiency, productivity, and adaptability in supply chain management and clinical research. To help facilitate this knowledge and technology transfer, the two companies will jointly build and leverage the "McLaren GSK Centre for Applied Performance." The facility will train GSK employees to deliver world-class results across its 2,000 production lines in 80 global factories. In addition, the GSK nutritionals division will construct an all-new mission control facility at its London headquarters modeled after McLaren Racing's own Formula 1 race-strategy mission control center. The facility will help expedite management and decision-making for wholesaler stocking, inventory management, pricing, customer responses, and competitor activity. GSK will also evaluate how McLaren's system of in-car driver communications can be applied to modify and expedite clinical trials.

McLaren Group's Executive Chairman Rod Dennis summarized this approach by stating that "this all-new collaboration between McLaren Group and GSK—McLaren's first ever such association with a major pharmaceutical corporation—represents a strategic partnership that engages two great British companies at a variety of levels across a number of disciplines in a multi-faceted and ground-breaking way. Specifically, our intention is that GSK will harness McLaren's world-beating Formula-1 bred technology processes and operational dynamism, in order to enhance its performance across a wide variety of its divisions in a way that none of its competitors can match."

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