Case Study Biomed

Thai Drugs Co. Ltd. is an established family owned business- just one of a total of 170 small to

medium size local Thai pharmaceutical manufacturers. Competition also includes 5 large firms

with over 50% manufacturer’s sales and foreign manufacturers with 65% Thai pharmaceutical

market share. Thai Drugs decided to venture into the generic market in 1990 and created a

subsidiary, Biomed Co. Ltd., which simply was a sales organization to market and sell the

generic product line - employed 1 sales manager, 11 sales representatives, and several sales

administrative clerks. Utilizing the existing manufacturing capacity through Thai Drugs Co. Ltd.,

it provided over 100 items of prescription and non- prescription drug items, selling to hospitals,

drugstores, and clinics, yet only had .07% market share and represented a minimal sales portion

of Thai Drugs Co. Ltd., and profitability of Biomed Co Ltd. was an unknown. Ponlerd is a family

member and just completed his MBA at the Ivey Business School in May of 2006 and is to be

the General Manager of Biomed Co. Ltd. He is inheriting a recently implemented, new market

strategy and there are new changes in the industry soon with the introduction in 2008 of the

GMP (Good Manufacturing Practices). His decisions could make or break Biomed Co Ltd.

The demand for generic drugs is increasing and consumers purchase them as a cost savings

with virtually the same advantages of non-generic drugs. Consumers are ultimately the end

users, with distributions through various outlets such as pharmacies, hospitals and clinics,

which are the main focal point of customers for Biomed Co Ltd. Hospitals make up nearly 70%

of the market, however with the “30-baht universal health care scheme”, bids are awarded to

the lowest price product. Pharmacists are able to write prescriptions and consumers look for

them as a cheaper and more convenient alternative than a hospital visit and represent around

30% of the market share. A very...