Teva taps the consumer world's biggest brander
Despite being the world's leading generics company, Teva Pharmaceuticals also recognized the need to adapt its competitive
business model. Teva is increasingly competing with not only generics but also branded products, which innovators are continuing
to promote after patent expiry to supplement flagging sales. Brand versus generic battles are particularly fierce in the growing
emerging markets, where price differentials are smaller than the United States and consumers have strong brand recognition
and loyalty. Consequently, Teva needed to dramatically enhance its branding capabilities, product portfolio, and global reach.
Strange bedfellows: GSK CEO Andrew Witty and Ron Dennis, Executive Chairman of McLaren Group hope to add some horsepower to
GSK's supply chain management and clinical research programs.
To that end, Teva formed a global joint venture in November 2011, called PGT Healthcare with Proctor & Gamble (P&G), the world's
recognized leader in product branding. The two companies will combine their two global over-the-counter (OTC) businesses with
plans to build a $4 billion business leveraging P&G's strengths in consumer research and marketing, with Teva's experience
and relationships with regulators and pharmacies. The joint venture will pool Teva's active pharmaceutical ingredients with
P&G's recognized brands to create novel OTC products, such as new Vick's allergy relief combination products and line extensions.
Leaders of the two companies have publically emphasized PGT's competitive advantages, stating that their combined capabilities
are "unmatched in the industry" with "one of the broadest and deepest OTC product portfolios and geographic footprints." However,
Teva's primary underlying motive is to learn and apply P&G's best branding practices globally to its growing portfolio of
branded generics and OTC products and, ultimately, its innovative products. "P&G has demonstrated it may be better than anyone...when
it comes to branding, [which] increases the efficiency and the success," said Eli Shani, PGT's chief operational officer.
The five steps to creallaborations
These are only two high-profile examples of creallaborations being developed in the pharmaceutical industry. Pharmaceutical
companies seeking to enhance their competitive models and positions should adopt a five-step "Creallaboration Framework" for
creating innovative collaborations:
» Creallaboration analysis—Identify and prioritize the Winning Market Factors in a particular competitive space to determine
essential new corporate capabilities.
» Creallaboration brainstorming—Brainstorm and broadly analyze potential non-pharmaceutical partners and their capabilities
to select the best potential matches.
» Creallaboration contests—Conduct scenario analyses, innovation tournaments, or competitive simulations to test potential
company and competitor collaborations.
» Creallaboration actions—Quickly explore and execute on selected creallaborations.
» Creallaboration monitoring—Develop clear objectives and parameters for evaluating and refining such initiatives.
Pharmaceutical companies and professionals that recognize the importance of identifying and leveraging unique, first-in-class
capabilities from other industries and partners will gain significant first-mover advantages, resulting in a much more competitive
and timely business model.
Stan Bernard, MD, MBA, is President of Bernard Associates, LLC, a global pharmaceutical industry competition consulting firm. He can be
reached at SBernardMD@BernardAssociatesLLC.com