This is a strategic market entry case that tests the candidate's ability to evaluate market attractiveness, assess organizational fit, and make a go/no-go recommendation. The case requires candidates to synthesize quantitative market data with qualitative strategic considerations, including channel strategy, product positioning, and geographic expansion implications.
Our client is a $5 Billion private European manufacturer of medicinal products. The client licenses new medicines from research companies and sells their products through both traditional European wholesale distributors as well as direct contracts with European hospitals that allow them to cross-sell their products and expand their product footprint.
The client’s existing manufacturing footprint is in urban locations close to their customers resulting in higher overhead costs compared to the competition. However, they are able to command a price premium in this market due to high quality products, excellent service, and speed to market. They currently own 10% of the European market, a highly fragmented, but growing industry.
They have an aggressive growth target of doubling their top line within the next 5 years and are thinking about entering a new market, consumer skin care, due to the following attractive characteristics: • Wide array of products treating acne, hair loss, wrinkles, infections, fungus, psoriasis, and oily skin. • Highly fragmented, $30B global market with Lotions, Ointments, and Creams making up 80% of the products. • Two major channels i) Physician prescriptions (sold through pharmacies) and ii) Over-the-Counter (sold through retail outlets) • Significant convergence with more products being sold over-the-counter placing pricing pressure on prescription products in an already low-margin business.
Your team has been called in and asked to lead our client through the analysis and decision processes of how best to proceed with this decision.