Burroughs-Wellcome Company Harvard Case Solution & Analysis

Burroughs-Wellcome Company Case SolutionĀ 

Situation Analysis:

Burroughs Wellcome Company is an American subsidiary company, which founded in 1880 by Henry Wellcome and Silas Burroughs and its operations are spread in 18 countries and it employs 20,000 people. The company sells Health Care products named as Zovirax (for Herpes treatment) and Retrovix (for AIDS treatment) that accounts for 89% of the fiscal revenue. These two products generate total to 34% sales in the health care treatment.

The company is facing the problem of pricing for Retrovir as most of the buyers consider this as too expensive medicine and also if the price is decreased then it will create the problem for bearing the cost for research and development that cost $ 80 to $ 100 million.

Regardless of repetitive requests over the past two years to bring down the cost of AZT (trademarked Retrovir), Burroughs Wellcome and its parent organization, London-based Wellcome PLC, cannot guarantee that the $6,300 yearly (discount) cost of the medication per individual would be justified, in view of high research, development, production, and different expenses connected with the medication.

The case gives the chance to investigate the financial matters and control of the pharmaceutical business, cope with the ethics of medication pricing, and examine the plan of advertising methodologies with respect to both privately owned businesses and lobbyist groups in the time of AIDS.

SWOT Analysis:

Strengths:

  • This company was first to introduce the Retrovir AZT drug for the treatment of AIDS
  • It was approved by the FDA
  • It has high brand recognition
  • Experienced in research and development of drugs
  • Free of toxic
  • Well known in US and in other 18 countries.

Weakness:

  • Price of AZT is the weakness that consumers refuse to buy
  • Some patients show negative reaction
  • It goes with long process to deliver the drugs to end customers
  • Limited availability of resources

Opportunities:

  • Aids cases are very common and it continuous to increase yearly
  • Allow opportunity to access the health care
  • To provide benefits through corporate social responsibility

Threats:

  • Increase in competitors
  • Nationalizing the AIDS dug
  • Lawsuit for the trademark
  • Improper pricing investigation
  • Campaign to limit excessive profit

Overall SWOT:

The SWOT examination demonstrates that Burroughs has a wonderful chance to be the main company in the market to give a medication to control HIV. Its competitive advantage is to provide social responsibility to benefit the customers from the brand as a prestigious medicine that slows down the effects of AIDS.

However, the brand image of the company has been affected because of intervention of the government, the high cost of its medication, and the introduction of new and most likely better medications from different organizations soon. It is going to have special effects on the organization income and sales. For this purpose, the company requires a new marketing plan and pricing strategy for public awareness in order to better understand the number of people affected by AIDS.

In terms of opportunity, the government has string social and moral responsibility towards the citizens of the country. Therefore, the company allows the access to health care by the introduction of Retrovir AZT drug.

By estimating for Retrovir (AZT) -20% has been reduced.The cost is much too high for the customers. Contrasted with different meds for cancer, it is double even triple times the cost for aggregate life time cost. Therefore, it would be very difficult for the company to manage the cost of R&D....................

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