MGT 8002 Strategic Management

Introduction MGT 8002 Strategic Management

MGT 8002 Strategic Management are a pharmaceutical private company1 headquartered in Malaysia and owned by the Osman family. The chairman of the Board is Mr Haji Mohd. B. Osman. Mr Mohammad was a highly respected chemist who began to design new products from the back of his chemist shop in Subang Jaya. From these humble beginnings, he began to sell his products through suppliers to local Doctors and hospitals. This was the forerunner to an innovative culture inherited by the present company. In 1995, Mr Mohammad employed a dynamic CEO, PK Hong Lee (known as PK) who has progressively grown the business. While the Chairman and his daughter, Siti Bt. Osman sit on the Board, they leave all the running of the business to PK. Miss Siti however is increasingly scrutinising Home’s financial returns and is increasingly pressing PK for more profit as her father allows her to play a more prominent role in the business to protect the family’s interests. This comes on the back of Miss Siti’s graduation from an Australian university with an accounting degree.

MGT 8002 Strategic Management | Innovative BiotechnologyFrom its early beginnings in 1985, the company has progressively established a culture of research with a largely focused strategy of producing over-the-counter (OTC) drugs. During the last decade however, the company has progressed its research into new products including bio-medical and health food supplements (HFS) including more recently radical innovations in hearing devices (HD). Approximately 80% of its products are locally researched by scientists in Malaysia with some product licenses recently acquired from Australian manufacturers to produce and market OTC drugs and health food supplements. However this is only at an early stage. Earlier growth patterns belie more recent trends of slow growth in OTC; in future years, the company envisages much stronger growth in its new innovations spurred on by capital injections of US$30million in OTC and US$40million in 2015/16. From 2017 on, HP has reworked their strategic plan to grow market share. This is particularly relevant given that the market in the Malaysian region has witnessed slow to medium growth with many large global pharmaceutical companies already establishing strong market presence. The Malaysian market however is expected to continue to grow. While HP relies on a highly innovative approach, this has mostly been within the

Malaysian context. While much of the company’s staff is highly trained and skilled, general management staff are not globally experienced. Similarly, while HP has enjoyed much success in OTC, larger competitors are gaining market traction and the industry is highly competitive. Global competitive firms for instance appear to dictate key success factors even though smaller firms such as HP are well entrenched. While staff appears to be loyal and dedicated given the high level of staff buy-in to innovation, there is increasing concern that the company will continue to lose market share unless something can be done. More recently, the local Minister for Health was starting to enforce stricter drug approval procedures following entry into the World Trade Organisation and tighten laws related to intellectual property rights following recent patent infringements between and across Asian countries.

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