Professional Documents
Culture Documents
For most of the companies, the concept of value creation for customers is very narrow. They just
focus on achieving the short term financial objectives by not understanding the most important
customer needs. It’s time for the intersection of both society and the companies, and applying the
concept of shared value
Shared value is when, the business fulfils its economic goals and enhances its competitiveness, with
the simultaneous benefit to the society, not only in terms of providing goods and services, but also
improving the social conditions of the communities, in which it operates.
Most of the times, the companies feel that the benefit to the society will come at the expense of
company’s profits, but on the other hand, many companies are now even extending this approach
and examining ways in which they can better leverage their own assets and expertise to create
shared value
Redefining and reconceiving, the products in a way, that it benefits the society, and a lot of
new opportunities can arise by catering to the underprivileged/disadvantaged communities
of the society
Redefining the productivity in the value chain, which can help in better use of energy and
other resources. The process of procurement and distribution can also be looked after
Bringing together the companies in the same industry by making supportive clusters. These
clusters can focus on academic programs, employee supporting activities, etc
While creating shared value, one must keep in mind the compliances and regulations of the country
in which the company is operating.
Thus, simultaneously creating shared value with the economic value of the business will be one of
the powerful driving forces in the coming years.
Q.2] Is this concept applicable to Novartis, and if so where?
Yes, the concept is applicable to Novartis in context of rural India. The case clearly states the
company found a need in the Rural Indian populace for proper, affordable medical help in case of
Tuberculosis, Infections and Women Nutrition, their research found a lack of awareness about these
problems.
The company decided that they must focus on creating awareness about these diseases via a Health
Educators model. In this model representatives of the company would visit the villages (or would be
from the villages) and educate people about various aspects of treatments of TB while also assisting
in the treatment of the people already having the disease. This helped in increasing the recognition
of the brand in the Rural India. The HEs would visit the village and identify people in need of
treatment and convince them to get a treatment for it, also they would educate the people about
the disease and basic prevention methods. This was all aimed to ultimately help the company to
grow while also benefiting the people.
The program eventually helped Novartis build a healthy network of Doctors and Pharmacies who
feel that this is a good initiative. The doctors started prescribing medicine and the pharmacies are
keeping these medicines now as they are being prescribed. Eventually the program has helped both
the company as well as the rural BOP population of India.
Q.3 What are the ingredients of success for Novartis?
Through the medium of the case study, it is evident that Novartis has to take the following route:-
(2) Ride on the momentum from the above and establish a sustainable business model based on the
concept of shared value
1. We understand from the case that 80% of the audience attending the sensitization sessions were
women. Having a workforce of women HEs drawn from SHGs (Self-Help Groups) and the Anganwadis
would go a long way in understanding female-centric ailments. This would also help achieve
Novartis’ twin aim of promoting health-seeking behaviour and creating a sustainable business model
driven by an increase in health-seeking behaviour.
2. The Arogya Parivar team needed to engage the influencers at the Primary Health Centre (PHC),
the Secondary Health Centre (CHC), doctors, chemists, sarpanch et al. for making a strong
foundation for future success. These influencers enjoyed immense leverage to convince and
onboard people to Novartis plan of action for mutual benefit.
3. Extreme caution must be observed by Novartis to make sure no government norms are flouted
while going about their business. The Medical Representatives (MRs) won’t be able to directly
prescribe drugs from Novartis while sensitizing the people about the various ailments, symptoms,
diagnosis and the treatment methods available.
4. The Health Educators (HEs) mustn’t be utilised for transactional purposes for the medicines as
that will again put SOPs (Standard Operating Procedures) in jeopardy. A basic infrastructure and an
enabling environment is required for the medicines to be relayed to maintain their sanctity and
functionality.
5. Capital intensive exercises like new product development for the rural markets or co-partnering
with the FMCG majors & Big Pharma must be carefully analysed in terms of the cost-benefit they
might or might not bring to the table.
6. The primary issues of the villagers like reluctance to seek medical intervention for their ailments,
lack of information and knowledge of the medical practices and solutions available, expenses
incurred and loss of daily wage upon travelling for treatment is the bone of contention for the
success formula.
Q.4] Discuss the challenges for Novartis:
The following were the major challenges Novartis had to face in regard to the healthcare for rural
people in India:
1. Awareness:
The awareness for symptoms of TB was less amongst people of rural India.
Along with this there was lack of awareness about the diagnostic tests required, the treatment
needed, the specific drugs in its portfolio to be used, the expected outcome and the physicians
capable of offering proper treatment and follow up.
Illiteracy was rampant and a sense of mistrust prevailed amongst people. Hence it was
imperative to make efforts to come through some interpersonal mechanism with individuals
embedded within the community who can be trusted.
All this had to be done keeping in mind the cost considerations that limited the maximum
amount that could be spent on the programme
3. Affordability:
4. Acceptance
"Health seeking behaviour" was lacking and Novartis needed to prompt BOP patients to look
for medical help.
Malnutrition, iron deficiency and diabetes were common, but since health education was
absent, their symptoms weren't recognized and diagnosed (due to cost and time involved)
until they became severe
Q.5] How did Novartis resolve these challenges? Identify the options and discuss the Pros and
Cons of Each