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Strategic Management Bresch

by | May 26

Strategic Management
Academic Institution
Author Note
November 4, 2019
Strategic Management
Bresch should lower down the prices of EpiPen, to a considerable amount relevant to other countries. The idea of raising the prices drastically due to growing demand remains unethical. Considering the Mylan shares have already started going down, there is fear of losing customers to competitors. Shareholders are now lacking faith in the company resulting in the exit of many shareholders and a fall in sales as predicted by analysts in the stock market. The company will lose its financiers, consequently crippling its operations. There would be less production for a dwindling market, as many consumers would switch to alternatives (Mariton, 2009). The government is now on the company toes that may suggest a possible termination of the license or increased taxes. The only option remaining is to reduce the prices, most preferably relevant to other countries. However, Mylan is in a better strategic position, considering the EpiPen brand loyalty with its consumers. Consumers, as a result, remain reluctant to other alternatives such as Adrenclick, which goes for almost half the price of EpiPen. Nonetheless, reducing the prices remains to be the best option even though it suggests a fall in the profits.
Price variation across countries does not seem reasonable whatsoever. The difference between an EpiPen in America is way high than that in the USA. Considering the headquarters of the company are in the United States, the rationale for charging extremely high amounts in other countries does not make sense. EpiPen in Canada, for instance, goes for $131, while in the United States, it costs consumers $350. The high variations cannot be accounted for, considering the two countries are almost close to each other. On the positive side, when Mylan remains consistent with its prices, the company will be able to achieve profitability as more people will be buying EpiPen at a more considerable price. Adrenaclick had already proven to be a threat to the industry, acquiring 7% of the whole market pharmaceutical industry. If the prices were not consistent, consumers would switch to other alternatives as prices were unbearable, resulting in a growing market share of competitors. Making the prices to remain consistent reduces the strategic advantage to competitors, offering the prospect for dominance by Mylan in the future. On the contrary, if the prices remain steady, Mylan will lose its drastic revenue growth. The company has recorded a drastic revenue increase from $200 million to more than a billion dollars in the last seven years. Reducing and keeping the prices consistent will lead to short term decrease in revenue generated, but is way better than a reduction in market share due to consumer dissatisfaction.
Mylan pricing policy should depend on the manufacturing costs, competitors, and demand and supply forces. Manufacturing costs and expenses are vital in determining the final price of the products as they are costs factored before the final price can be attained. The company may partner with health insurance programs such as Medicaid in ensuring its prices are accessible to many Americans at more affordable prices. Mylan will boost its Public Relations issues by increasing its image of a firm that operates on the centrality of consumer satisfaction and care. Additionally, designing membership cards for regular consumers to access the products at more affordable prices is more convenient. The result will ensure more consumers remain affiliated to the company due to better treatment and costs.
Bresch’s most significant risk is loss of market share, shareholders of the companies, and a threat of termination of license of Mylan. The drastic increase in prices had attracted a lot of controversies and attention of many US senators and, consequently, the judiciary. It was a war Mylan had fewer chances of winning with competitors benefiting from the controversies. Amongst many concerns, the Judiciary wished to know how the company intended to assist those patients that were short of finances. Furthermore, the CEO feared losing market shares, as many consumers were continually complaining of overpriced EpiPen products.
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Mariton, J. (2009, March 9). What is Scenario Planning and How to Use It. Retrieved October 11, 2019, from https://www.smestrategy.net/blog/what-is-scenario-planning-and-how-to-use-it
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