The growth strategies of a global pharmaceutical company : a case study of Aspen Pharmacare Holdings Limited.
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Date
2015
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Abstract
The evolution of Aspen Pharmacare Holdings Limited from its origins less than 20
years ago is a success story worthy of analysis. Aspen began trading in 1997 as a
small pharmaceutical business managed out of a suburban house in Durban,
South Africa and by 2004 had achieved revenues of R2,2 billion. Aspen has now
grown to become a global company with offices in approximately 50 locations
across the world and revenues of R29,5 billion in 2014. Given the rapid and
sustained growth achieved by Aspen over the past 11 years (2004 – 2014), the
main aim of this study was to identify and analyse the growth strategies adopted
by Aspen over this time period. The research method used was a descriptive
study through a single case study of Aspen by analysing secondary data in the
form of publicly available company reports and presentations, as well as financial
results, issued by Aspen between 2004 and 2014. Qualitative data was extracted
and analysed to determine the growth strategies used by Aspen, whilst certain
quantitative data was used for illustrative purposes. The study found that, guided
by strategic and visionary leadership, Aspen adopted a number of growth
strategies including (i) organic growth, as a key factor in creating incremental
value for Aspen and its stakeholders, (ii) inorganic growth, in the form of carefully
planned and well executed acquisitions aligned to the Group strategy, (iii)
extending territorial coverage through global expansion, particularly into emerging
pharmaceutical markets, and (iv) ongoing investment in production capabilities as
a means of creating a strategic advantage. Despite the challenges of intense
competition, restrictive legislation, pressure on medicine prices, currency volatility
and market specific risks, Aspen has delivered double-digit earnings growth to its
shareholders for 16 consecutive years. The study culminates in the development
and proposal of a sustainable growth model which is intended to be a unique
contribution to the academic writings on business growth. It may be used by
companies (particularly South African pharmaceutical companies) as part of their
strategic planning process for growth.
Description
Master of Business Administration. University of KwaZulu-Natal, Westville 2015.
Keywords
Business communication., Strategic planning., Corporations--Growth--Planning., Business planning., Pharmaceutical industry--Growth--Planning., Theses--Business administration., Aspen Pharmacare Holdings Limited.