Competitive Success Factors
How should companies respond to this pharma-versus-pharma environment? Here are 10 Competitive Success Factors for surviving
and thriving in the Competitive stage:
1. Competitive culture Companies in Competitive stage industries, such as consumer electronics and airlines must focus on competition and respond
aggressively simply to survive. The vast majority of pharmaceutical companies have never experienced competition of this intensity,
and need to instill a much more competitive mindset in all levels of the organization. Executives should formulate and execute
revised strategies for this new environment as soon as possible.
2. Organizational competitiveness Increasing focus on competition requires changes in corporate structures, functions, and processes. Most pharma brand teams
assign a single product manager, market researcher, or competitive intelligence professional to be "in charge of" competition.
More progressive companies, however, use multi-disciplinary groups, such as Competitive Centers of Excellence, or full-time
competitive teams to handle such responsibilities. For example, some pharmaceutical companies deploy competitive counter-launch
teams whose sole responsibility is to undermine and thwart competitive products up to two years prior to the competitor's
launch. Companies should apply similar approaches to corporate competitive planning, with assigned, dedicated staff and regular
3. Competitive planning Most pharmaceutical product teams create only portions of competitive plans, such as competitive product market research and
competitive product profiles. Relatively few brand teams conduct integrated, comprehensive competitive plans that synthesize
findings and identify specific action steps based on competitive company and product profiles; competitive intelligence and
research; customer analyses; stakeholder analyses; market and environmental analyses; and corporate profile relative to competitors.
It is not enough just to prepare these plans: They need to be implemented, reviewed, revised, and regularly revisited.
Pharma executives should also prepare corporate competitive plans to anticipate and prepare for changes in the broader environment.
At minimum, executives should incorporate company competitive planning during annual strategic planning and budget review
periods. Such plans help to identify potential competitive game-changers or wild cards, test market assumptions, and uncover
potential blind spots.
4. Launch/counter-launch The paucity of new products creates even greater pressure for a successful launch. Conversely, because of stagnating markets,
competitors cannot afford to have a powerful new player penetrate their limited market space. Consequently, competitors will
increasingly use counter-launch plans to preempt new competitors—particularly during the pre-launch phase when the new product
is most vulnerable. For instance, Amgen has, to date, protected its multibillion-dollar anemia franchise in the US by filing
a patent infringement lawsuit to prevent Roche from introducing its new agent Cera. Similarly, Bristol-Myers Squibb, makers
of the blockbuster anti-clotting agent Plavix, has aggressively tried to pre-position Lilly's new competitor Effient. "The
way I see it, if and when it is approved, [Effient] will be a niche product," BMS CFO Lamberto Andriatti recently told analysts.
5. Competitive simulations Like sports teams, pharmaceutical companies should "scrimmage." Traditionally, pharma marketers have conducted business "war
gaming" only when launching a product. In today's market, these exercises should be conducted at least annually. Companies
should conduct a new version of war games called "competitive simulations." Competitive simulations are more realistic, engaging,
and productive versions of war games that factor in not only physicians, payers, and consumers, but also other influential
Unlike traditional war games, which focus on physician promotions and detailing, competitive simulations are customized to
test important strategic and tactical issues for a particular product and market. Simulations may be used to test the overall
marketing plan or individual plan sections, such as payer strategies or communication plans. Most important, competitive simulations
provide usable results, including specific action steps for going to market and winning.
6. Competitive differentiation In the Competitive stage, the sheer number, intensity, and diversity of competitors compels companies to create unique, sustainable
product and corporate positioning along several dimensions. For example, to enhance its ability to negotiate with governments
and other large payers, Novartis has repositioned itself as a full-line healthcare product company by offering branded and
generic pharmaceuticals, vaccines, and consumer healthcare products.
Other companies will succeed in this competitive environment by focusing on a specific strategic market segment, geographic
region, or disease state, and serving that target more effectively and efficiently than competitors. For example, Novo Nordisk
achieves differentiation by focusing on all aspects of diabetes pharmacotherapy, including a diverse portfolio of diabetes
products, numerous product formulations, novel delivery systems, extensive diabetes education programs, strong stakeholder
relationships, and global diabetes philanthropic initiatives.
7. Cost competitiveness In the Competitive stage, it's particularly important to focus on payers, sophisticated repeat buyers who have the advantage
of deciding among multiple competing brands. In today's market that means that competition shifts toward greater emphasis
on cost and service.
Pharmaceutical companies must move aggressively to identify substantive ways to reduce costs. Companies have implemented techniques
such as rationalizing R&D and product portfolios, revising processes, and raising employees' financial consciousness. Companies
in other industries, such as Dell and Nike, have become "virtual companies," essentially outsourcing most functions. Over
the past decade, pharma companies have increasingly moved in this direction by outsourcing manufacturing, distribution, clinical
development, sales, marketing, IT, and even discovery. This approach not only makes companies more cost-efficient, but also
more responsive to customers and competitors.
8. Technology competition In the Competitive stage, companies have a much more difficult time discovering new products. Consequently, competition shifts
from internal discovery to external licensing and partnering. Over the past decade, pharmaceutical companies have been forced
not only to find new compounds, but also to compete aggressively with their peers to gain access to those products. In a reversal
from the Commercialization stage, pharmas in this stage are now actively marketing to biopharmaceutical companies, academic
institutions, and other organizations, sometimes participating in product "bake-offs" or auctions for attractive, early-stage
compounds. Companies are also competing for other types of technologies, such as genomics or nanotechnologies, to help expedite
the discovery, development, or delivery of products.
9. Stakeholder competition Stakeholders other than physicians and patients—various healthcare professionals, regulators, consumers, the media, politicians,
distributors, and patient advocacy groups—are increasingly influencing the adoption, utilization, pricing, and perception
of drugs. What's more, companies are competing among themselves for the influence and support of these key constituents. Forward-thinking
companies have developed strategic stakeholder leader plans, similar to those developed for key opinion leaders, to gain competitive
advantage with these influencers.
10. Competition training Key staff members need to know how to analyze competitive products and companies, monitor competitive activities and signals,
anticipate competitive moves, develop preemptive and defensive strategies, utilize best competitive practices, and take decisive
action. Progressive companies have instituted competitive leadership forums, train-the-trainer programs, competitive case
studies seminars, and a variety of other initiatives to provide professionals with the confidence and techniques to gain a