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How to structure "How to react" case types

competitive response
New answer on Nov 21, 2019
1 Answer
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Anonymous A asked on Nov 21, 2019


Here is a case that was given to me : "A major pharmaceutical group has a patent for one of their drugs which will expire next year. How do we limit the impact on profit ?"

Do you have tips on how to properly structure this type of case (response to a certain event, a competitor) ?

Thanks !

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Anonymous replied on Nov 21, 2019

Hi there,

Regardless of how the question is framed (e.g. "how to react") or how an issue is triggered (a sudden event vs. an issue built up overtime), fundamentally it is still the same business question to be addressed. In this case, it boils down to the profitability problem, and you can still use the profitability framework/structure.

Of course you need to first understand properly what are the impacts to the profitability components - how is this going to affect revenue stream, sales volume (given the market share might tank), sales price (price might also tank due to competition rising up) etc; would there be any implication on the cost side...After you truly understand the impacts and where they are coming from, then you can solution for them.


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Anonymous A on Nov 28, 2019

Thanks !

Anonymous A on Nov 28, 2019

Do you have examples of how it could impact the costs ? (other than higher cost per unit due to lower sales) And how would you then structure ways to come up with a solution ?

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