Salix Company Strategy Analysis | Free Essay Example

Salix Company Strategy Analysis

Words: 588
Topic: Business & Economics
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Salix is a pharmaceutical company; it has a goal to provide gastroenterological medications of the best quality to the patients suffering from gastroenterological issues such as Crohn’s disease, inflamed or irritable bowel disease, ulcerative colitis, traveler’s diarrhea. The medications made by Salix are distributed to gastroenterologists and general practitioners. The company’s products of Salix are sold in several of the biggest and most influential countries of the world.

Its founders are Loren Johnson and Randy Hamilton. At the moment their company has achieved high level of success on the international arena, the leaders feel the pressure to grow, but they do not know if they should expand their customer base for the existing drugs, search for additional drugs or start exploring other diseases. One of their main issues is finances. The leaders actively participate in the working process of Salix.

The difference between OTC drugs and prescription drugs is that the patients do not need a doctor’s prescription to purchase OTC medications, whereas prescription drugs cannot be sold without a special document signed and stamped by a doctor. Proprietary are the patented drugs with a well known name.

Such drugs are developed and promoted by pharmaceutical companies; their names are often advertised through various mass media, no one else is allowed to produce these drugs before their patent expires. Patent expiration can be prolonged because of the FDA approval procedure that is necessary for the drug to become popular, but may take a lot of time. Generics are the drugs that came off patent or the analogues of the patented drugs produced after the expiration of patents.

Salix’s strengths mainly are based on the company’s capacity for acquiring licenses for the medications on the territory of its own country this allows the company widen their range of customers and distribute their products to more patients. Salix’s weaknesses are related to the company’s manufacturing capacity, new medications are hard to discover and expensive to develop.

The company’s opportunities are based on the development of their franchise and the research of new medications outside of the field they are used to working in, this would be the ultimate opportunity for Salix’s growth and expansion.

Potential threats Salix may face are the reforms of the state healthcare that would limit their business opportunities and affect their sales. Salix has definitely identified a profitable niche, yet it has its limits socially and financially, company has reached the barrier when it has serious difficulties finding new drugs and developing them.

Salix’s strategic management is in-licensing and search for the customers within the territory of the United States, this strategy helps the company focus of a specific market and the demands of certain range of customers.

Their leadership traits are transactional; the main directions come from the above and are established by the team of the owners and founders of the business. Besides, the company works through the democratic kind of leadership trying to maintain the relationship with the opinion leaders of the gastroenterology community (Salix Pharmaceuticals, Inc: Succeeding on the Road Less Traveled, 2008).

Salix’s success is based on the fact that they chose a new niche for development of their business. Over time this niche became filled with the competitors and the opportunities for the development are decreasing because of the financial and scientific issues. Health care industry’s rapidly developing dynamics require proper strategic thinking and planning, appropriate planning comes for the well developed leadership, these are the factors that have been keeping Salix on the top (Ginter, Duncan & Swayne, 2009).

Reference List

Ginter, P., Duncan, J. & Swayne, L. (2009). Strategic Management of Health Care Organizations (6th ed.). Hoboken: Wiley. Print.

Salix Pharmaceuticals, Inc: Succeeding on the Road Less Traveled. (2008) PDF file.