The Significance of Leadership Style in Strategic Management Process
Discuss about the Corporate Social Responsibility Contribute.
The leadership style plays the most significant role in the strategic management process. The strategic direction of an organisation is developed by concentrating on the vision and mission determined for the future prospects. According to Adner, Ruiz-Aliseda and Zemsky (2016), the effective strategic planning is the driver of the organisational success driven by the efficient leaders. Considering the current challenges in the business world, the organisation needs to develop the fruitful strategic direction that helps in securing the competitive edge (Tansey, Spillane and Meng 2014). The study is thus following the strategic formulation of Glenmark Pharmaceutical Company, which has set their vision to emerge as the global pharmaceutical company by developing the integrated research based solutions (Glenmarkpharma.com 2018). The company has already captured the leading position in discovering the new molecules, such as NBEs (New Biological Entity) and NCEs (New Chemical Entity). The report highlights that the company has established their significant presence in the branded generic business field across the emerging economic market. This generic business of the company serves the market of Western Europe and US. The API business of the company serves over almost 80 countries that include, India, South America, EU, and US. The company is even focusing on developing their R&D centers to accomplish the goal set for the enrichment of the lives across the globe.
The study would develop the Porter’s Generic Business Strategy of Glenmark Pharmaceutical to understand the strategic decisions of the company. The associated segments in the porter’s generic strategy would suggest the positioning of the company in a competitive landscape. Furthermore, the study will discuss the existing organisational structure maintained by the company to develop the business functionalities. In fact, the conceptual analysis of the formal structure will also be discussed in this study.
According to Bell, Dyck and Neubert (2017), the positioning of a firm within the industry depends on the profitability level, which might be above or below the average of the industry. A firm can determine the long term sustainability when the profitability level is above the average. It has been observed that every firm concentrates on developing two basic types of competitive advantage, such as low cost and differentiation. The achievement of these competitive advantages turns out to be much beneficial for the company to survive for a longer time. Moon et al. (2014) implied that generic strategies are often conceptualized as the value system or the business philosophies. There are some of the specific fundamental ways determining the development of the generic strategy and these ways are as follows:
- The selection of the specific business philosophy and the value system
- The selection of the product or service attribute types
- The selection of the customer group types
- The selection of the location
- The focus on the value chain areas inside or outside the organisation
Glenmark Pharmaceutical Company: Vision and Mission
These specific considerations are needed to be taken into account while formulating the generic strategy for any firm. Similarly, Glenmark Pharmaceutical Company is also developing their business generic strategy to secure their competitive position. The further section of the study would discuss the Michael Porter’s Generic strategies in terms of investigating the strategic functionalities undertaken by the company.
Porter’s Generic strategy creates the wider focus on the factors that are responsible for achieving the competitive advantage and sustain the superior performance of the firm (Martynov 2015). Glenmark Pharmaceutical is focusing on securing the competitive landscape by introducing the innovative pharmaceutical products to the market. The explanation of the porter’s generic strategy is explained further:
The first component of generic strategy is the cost leadership, which determines the lower pricing structure of the products in compare to the competitors in the market. According to Eva et al. (2018), the cost leadership strategy is developed when a company realizes that the lower pricing structure of the product can help in win over their competitors. This strategy helps in creating the flexibility margin when the competition become stiff and the company requires earning more, less, or same profit level (Toma, Secundo and Passiante 2018). It is necessary to identify the most helpful ways to achieve the cost leaderships. Glenmark Pharmaceutical
The following concerns are needed to be taken into consideration while developing the cost leadership strategy.
- It is essential to present the accurate demand forecasting and the utilization of the high capacity (Kumar, Mukherjee and Adlakha 2015).
- Attaining the higher economies of scale is helpful enough to achieve the cost leadership.
- The development of the service and product standardization strengthens the cost leadership structure.
- Aiming at the average customers for selling the products would also be much helpful in such context.
- Most importantly, it is essential to invest in the techniques that usually save the costs.
It has been observed that the cost leadership works well when the market is highly competitive. D. Banker, Mashruwala and Tripathy (2014) pointed out that cost leadership exists when any firm offers the high standardized product and services. Cost leadership is developed when the buyers have the bargaining power to negotiate the product price. In fact, when the company finds the less customer loyalty and lesser chance of switching costs, they tend to develop cost leadership strategy. Haider et al. (2018) implied that cost leadership strategy helps in protecting from enormous competition. Moreover, it helps in dealing with the cheap substitute that is considered as the offset by the lower prices. On the other hand, these cost leadership strategy creates the obstacle for the new entrants. It is noticeable that the powerful suppliers have the higher bargaining power, which leads to price reduction. On the contrary, Porter and Kramer (2017) argued that this cost leadership strategy is quite temporary and it is not quite market friendly. In support of this statement, Laszlo and Zhexembayeva (2017) pointed out that the less efficient producers cannot see like this strategy to remain competitive in a dominant market position. In addition to this, the cost leadership strategy is considerable limited due to the potential threats from the advanced technological shifts. It has been observed that Glenmark Pharmaceutical concentrates on moderate costs of the products with the assurance of high quality and standardization. The structure of the cost is thus signifies profitable in both the regional and the global sector.
Porter’s Generic Business Strategy of Glenmark Pharmaceutical Company
Product differentiation is developed when the competitive advantage of a firm depends on varieties and special features that are incorporated into the service or product. When the customers receive these product variations, the customers become willing to pay the considerable amount for it. According to Saeidi et al. (2015), an organisation needs to identify the special features in a product then incorporate these features to attract more numbers of customers. It is essential to understand that the utility for customers as well as their preferences are needed to be matched. The differentiation of the product can be achieved when a company succeeds to raise the performance of the product and increase the satisfaction level of the buyers. On the other hand, Anitha and Begum (2016) commented that the organisation needs to promise the customers to provide high quality product or service. When the distinctiveness of a customer is enabled, the organisation adopts such differentiation strategy to enhance their status. It is noticeable that when the market is much larger to be captured by other organisation that is selling high standardized products, this strategy works in a significant way. In fact, when a company identifies that’s the need and preferences of the customers are quite larger and these requirements are needed to be fulfilled by unique approach, the strategy of differentiation helps in dealing with this scenario. During the differentiation process the organisation can charge premium prices for the special features. Moreover, Guldenmund (2017) identified that the business market is can increase the production buy depending on this differentiation strategy.
One of the major benefits associated with this strategy is the lesson number of competitive rivalry. When the forms can distinguish themselves on the basis of particular differentiation, there is a lesser chance of market Rivals. Williams, Perillo and Brown (2015) explain that powerful suppliers have the ability to negotiate the increasing price, which is easily absorbable by the farm due to the higher number of loyal customers. The powerful buyers, on the other hand, have the lesser chance to negotiate scenes there are fewer options available. The improvement of the leadership skills is not sufficient to develop more innovativeness within the organisation. Understanding the better technicalities helps in achieving the determined objectives. It can also be indicated that the differentiation strategy works as a threat to the new entrants in the market. In spite of such benefits, some of the associated risks are also observed in this strategy development. Al Saifi (2015) indicated that when a company develops a long-term perceived uniqueness, it becomes quite difficult to maintain this approach. In fact, many of the forms are adopting this strategy to promote specific product features. It is quite considerable that the premium pricing structure has the limitation, which can be the identifiable barriers to developed is differentiation strategy. If the organisation fails to communicate the specific benefits derived from this product and services, the risk level increases accordingly.
Cost Leadership Strategy of Glenmark Pharmaceutical Company
Glenmark Pharmaceutical is quite inclined towards introducing more innovation. From discovering novel molecules to developing effective medicines, the company seeks innovation in every aspect. The company identified that if they can adopt the differentiation strategy, it will be helpful to attract more number of customers and enrich their lives across the world. The company not only brings differentiation in the products, but also in the operational process. Especially, in the therapeutic areas of Dermatology, Oncology, and Respiratory system, the company has ensured more differentiations and innovations (Bolden 2016). This distinctive approach towards scientific capabilities became the strong pipeline for some of the first in class modules. Therefore, it can be interpreted that the company can utilize this differentiation strategy to accomplish the business objectives.
The focus business strategy is generally depending on both the differentiation and cost leadership. However, it is essential to create a narrow or niche market to create the strategy. This strategy is generally formulated for identifying the customer groups based on the geographic and demographic segmentations. Dochy et al. (2018) implied that selection of the niche market by identifying underlying gaps, which are not covered by the differentiators and the cost leaders. The focus business strategy requires creating a superior skills capture this niche market. On the other hand, it is essential for the business market is to create the superior efficiency in order to serve such market. The focus strategy can be achieved by comparing that cost or the differentiation process with the competitors initiatives. Moreover, it is in required developing the most innovative ways for managing value chain. The focus strategy works well when the business has some type of uniqueness or innovative approach in the selected segment (Manuti et al. 2015). It is essential to use the specialized requirements that the common customers cannot fulfill. It is noticeable that the niche market is quite profitable for creating the opportunity in a competitive scenario. This strategy even works better when the major players in the industry do not deal with the niche market. The company needs to develop the higher level of expertise and skills to serve the specific segment.
One of the most beneficial approaches of this focus strategy is the less number of sales. The purchasers buy the products in small quantities due to which the powerful suppliers have lower interest. There is a lesser chance to shift the loyalty. The specialization here acts as the obstruction to the new entrance and the substitute products. However, it is noticed that focusing on a particular segment determines the commitment to a narrow market (Neal 2016). The segregation of the departments will help in setting the focus on each of the aspects or segments, which need more improvements with time. The focus markets required developing distinctive competencies whereas the niche market is short lived. The risks of the higher caused due to the limitation and small volume of the production is observable.
Product Differentiation Strategy of Glenmark Pharmaceutical Company
Glenmark Pharmaceutical is planning to file the application for almost 15-20 generic products in the US market each year by focusing on the niche market. The company is expecting the innovations and specialty drugs portfolio for contributing almost 30% of the total sales (Trivedi 2017). In fact, in the fiscal year 2016-2017, the company is aiming to consolidate almost 20% hike in the revenues than the last year. Therefore, it is signified that the clear focus on this niche market may create the considerable benefits for the company in upcoming years.
According to Dochy et al. (2018), the organisational culture is developed to connect the recognised properties and processes formulated within the organisation. It depends on the beliefs, values, and attitudes of the associated people in terms of performing the organisational functionalities. The effective organisational culture helps in reducing the complexity and develops the profitable and productive scenario for the associated members. Organisational culture is often conceptualized as corporate culture. It is generally a composite of common attitudes, values, policies and Standards. It also comprises the management approach and the performance of the employees. The effective organisational culture helps in building strong relationship with the client, customers and colleagues. Two types of fundamentals are associated with the organisation culture, such as formal business culture and informal business culture. Formal business culture is generally organized with the help of hierarchy levels based on the status and power. On the other hand, the informal culture create the egalitarian organisation cultures, where the differences between the power and the status or observable.
The organisational culture at Glenmark suggests the dependency on the human resources. The company believes that the participation of the human resources is the integral part of the business growth and success. The people are quite inspired and driven by the enriching lives. They generally contribute everyday for creating the healthier atmosphere. Organisational culture of Glenmark Pharmaceutical is based on the innovative approaches and enriched knowledge (Glenmarkpharma.com 2018). The motto of the company is to develop more innovative products and create the competitive brand image. Moreover, the company focuses on diverse cultural background that helps in adopting more innovative approaches in the day to day operations. The company invests more on skill development and the leadership training for the employees in different levels. The association of cultural diversity by gathering the Global workforce creates the learning atmosphere for every employee. It has been thus observed that Glenmark Pharamceutical has been following the informal business culture where the leaders do not maintain any hierarchy level differentiated by the status or power. It is notable that the employees receive the necessary training from the experienced candidates within the organisation. One of the major benefits derived from following this organisational culture is the employees become much motivated when they receive the authoritarian values of performing on their own. However, it is noticeable that the company is focusing on diverse segmentation, which requires closer observation on the diverse different. Hence, there would be some requirements in changing this culture.
Focus Business Strategy of Glenmark Pharmaceutical Company
Formal organisational culture is a codified hierarchical arrangement that segregates the job responsibility among the employees from different departments. According to Manuti et al. (2015), it creates a relationship between the diverse job specifications within the different units of the business. In fact, following this business culture helps in connecting one department to another, which result the picture and productive outcomes. The formal organisational structure helps in developing hierarchical relationships, developing the responsibility sense, and assigning competency. If the management follows the formal organisational culture, it will create a bigger workforce since the units are differentiated as per the process, activities, and responsibilities. The associated employees would formalize their relationships for achieving a better and common goals determined by an organisation. This type of organisation culture helps in optimizing the deployment of Management as well as he stops for achieving the predetermined objective of an organisation. It creates a better social network to enhance knowledge regarding the diverse typologies of business functions.
The formal organisation culture helps in achieving a common cause of the organisation. In spite of such benefits, this culture highlights some of the significant limitations as well. () implied that the formal organisation culture suggests the laws of initiatives. It is noticeable that the associated employees become occupied with more formal rules and regulations, which prevent them from developing their innovative skills while performing the organisational activities. They cannot even develop the initiatives or the innovative capabilities due to the strict adherence to the regulations. Guldenmund (2017) also pointed out that the formal organisation culture does not satisfy the social needs of the employees. Due to the job responsibilities and Scheduled deadline, people receive lesser chance to interact with other people and share their feelings while they are involved within the urgent works. They might feel a certain level of monotonous approach while walking through a formal chain of command. The social interactions are usually eliminated in this formal organisation culture. Therefore, it can be implied that this type of structure may affect the productivity of the employees.
However, Glenmark Pharmaceutical is much focused on innovativeness while the departments are segregated. The company is trying to bring innovation in every aspect that is introduced. A formal structure might help in categorizing the departments with better work functionalities, but it might reduce the chance of social communication. However, it is also noticeable that the experiences of the Global workers in diverse segments can determine the better and fruitful outcome in terms of maintaining the innovativeness within the organisation.
Conclusion
The above analysis determines that Glenmark Pharmaceutical develops the innovative approaches for the products. However, it is important for the company to adjust the focus strategy and concentrates on developing the high quality differentiation of the products. The segregation of the departments will help in setting the focus on each of the aspects or segments, which need more improvements with time. In fact, when the company is following informal organisational structure, it helps in creating the better social networking with the people from diverse cultural background. However, it is essential to develop more knowledge on the diverse functional traits which can determine better innovation for the future prospects. The roles and responsibilities and needed to be divided among the workforce, which will ensure the productive outcome. In addition to this, the company needs to develop training in the innovative technicalities used for production related functions. The improvement of the leadership skills is not sufficient to develop more innovativeness within the organisation. Understanding the better technicalities helps in achieving the determined objectives. In fact, it is also quite essential for the company to make the adjustments in the generic business by adjusting the product line base by concentrating on the differentiation strategy. The development of the complete understanding regarding the niche market and conducting the extensive market research would be helpful in accomplishing the business goals for the long term sustainability.
Conclusion
The study explores the generic business strategies adopted by Glenmark Pharmaceutical. The company has the motto of developing the innovative product line to deliver high standardized products and services to the customers. The associated segments in the porter’s generic strategy would suggest the positioning of the company in a competitive landscape. It has been observed that two basic types of competitive advantages, such as low cost and differentiation are determined by the firms. Glenmark Pharmaceutical concentrates on moderate costs of the products with the assurance of high quality and standardization. The structure of the cost is thus signifies profitable in both the regional and the global sector. Product differentiation is developed when the competitive advantage of a firm depends on varieties and special features that are incorporated into the service or product. When the customers receive these product variations, the customers become willing to pay the considerable amount for it. Glenmark Pharmaceutical is quite inclined towards introducing more innovation. From discovering novel molecules to developing effective medicines, the company seeks innovation in every aspect.
References
The company is especially focusing on the therapeutic areas of Dermatology, Oncology, and Respiratory system. Glenmark Pharmaceutical is planning to file the application for almost 15-20 generic products in the US market each year by focusing on the niche market. Depending on the focus strategy, the company is trying to strengthen the competitive edge in a more signified manner. Organisational culture of Glenmark Pharmaceutical is based on the innovative approaches and enriched knowledge. The motto of the company is to develop more innovative products and create the competitive brand image. It is important for the company to adjust the focus strategy and concentrates on developing the high quality differentiation of the products. The segregation of the departments will help in setting the focus on each of the aspects or segments, which need more improvements with time.
References
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