Abstract
Over the past few years, Sanofi-Aventis' strategic decisions have enabled the company to reinforce its leadership in the international market. The company has grown by merging with competitors, it has increasingly invested in R&D, reinforced its presence in the major markets (the United States and Europe) and in all the major pharmaceutical segments such as generics and vaccines. The firm in 2007 was one of the world's leading research-based pharmaceutical companies and the biggest one in Europe.
Like all its major competitors such as Pfizer and Johnson & Johnson, Sanofi-Aventis is still engaged in “mass-marketing” strategies based upon a portfolio concentrated around a small number of drugs meant for mass markets and reaching the highest levels of profitability. Indeed, Sanofi-Aventis' total sales highly depend on eight drugs presented as “blockbusters”: Lantus (metabolism), Aprovel (cardiovascular), Lovenox and Plavix (thrombosis), Stilnox / Ambien and Copaxone (Central Nervous System), Taxotere & Eloxatine (Oncology).
But pressure from medicine agencies, practitioners, public opinion and also from the financial market is indeed increasingly powerful and is making long-term and uncertain research more difficult to finance. And the Federal and Drug Administration's refusal to commercialize Acomplia in the United States, a drug destined to obesity treatment, which was to become a new blockbuster, is an example of the difficulties that Sanofi-Aventis has to face. This must result in thinking of new competitive advantages that has to be built to deal with such uncertainty. However, even if not all strategic moves have been successful, Sanofi-Aventis' business portfolio is also composed of Sanofi Pasteur, the Vaccine Business Unit which has a growing importance in terms of sales (2007: €2.8bn+14.5%). And in 2005, Sanofi-Aventis launched its generic brand Winthrop, which currently exists in 14 countries.
The company has strong financial resources which enables it to compete within the industry's top 10 companies and to implement its strategy. With €4.5bn spent for R&D in 2007 (fourth place among the top 10 pharmaceutical groups), Sanofi-Aventis allocated both money and human resources mainly in the vaccine unit in order to remain the market leader. It also deserves specific attention regarding its pipeline evolution by enriching it with innovative molecules which would respond to unmet medical needs or improve already existing treatments. Sanofi-Aventis has also built its competitive advantage through its brand reputation which can make the difference especially in emerging countries, its industrial organization and human resource management which always supports its strategic orientations and makes the understanding of the economic environment easier, and its geographical presence with a leadership position in Europe and the emerging countries.
That's why we believe that Sanofi-Aventis has the resources and capabilities to implement a new strategy and benefit from the whole opportunities that are going to shape the new era of the pharmaceutical industry. Our recommendations will therefore be focused on: product differentiation by intensifying the development of generics and vaccines and a stronger geographical diversification especially in the emerging countries (BRICs).
