Parkin Laboratories Harvard Case Solution & Analysis

Problem Statement

The problem arose when the Government of India enforced price deductions in the drugs market. This proved to be a setback for the Pharmaceutical industry. Similarly, Parkin Laboratories, also faced issues meeting their sales target. Parkin laboratories were having problems with their sales force as well.

Situation Analysis

            Parkin Laboratories, was having issues with the polies implemented by Drug Price Control Order (DPCO). This order caused Parkin to face flat sales and revenue. The order demanded the pharmaceutical companies to decrease the prices of the drugs, according to the government allotted rates. Due to the policy, Parkin Laboratories decreased the prices of 24 drugs. Though the company was having good sales previously, but in the month of August, the company faced the declining of the profits. Over the past two years the company did not take initiatives to increase its growth. Even though the sales revenue for the company had risen, but the sales revenue in terms of sales representatives had declined.

            The medical representatives were also not successful in visiting many doctors. As the pharmaceutical organizations depend a lot on the medical representatives, therefore, if the visits are not frequently paid to the doctors then the sales revenues eventually drops. Kumar, the general manager of sales at Parkin Laboratories, thought of working for increasing the efficiency of the sales force. The cost of the company could have been drained, by boosting volumes of the products.

Goals of Parkin Laboratories

The objectives and goals are very important for the company to keep running on track. The objectives and goals should be well defined for the whole organization and they need to be very concise and up to date so that the whole organization has a purpose to work on and their duties were well defined. Similarly, in case of Parkin laboratories, the company was among top 50 pharmaceutical companies operating in India. In 2012, the total sales were approximately $510 million and recorded growth was 21.4 %. In 2013, the company had a positive and well defined approach. Parkin Laboratories, wanted to score big in 2013. Therefore, they clearly aimed for achieving the net revenue of $610 million. Though the goal was very tough, but Parkin had clearly understood the situation of the company and were quite optimistic about achieving the goal.

                        There was a goal for increasing the efficiency of the sales force and providing them training, so that the company can increase its profit and growth. There was a goal of decreasing the operational cost of the whole process and increasing visits to the doctors to increase in sales.


            The legislation had been imposed in pharmaceutical industry and gave an order to cut down the prices of medications according to the government rates. Parkin Laboratories had been facing a decline in its sale and growth in a couple of years. Kumar, the general manager, planned to increase the volume of the products for decreasing the value of the product. He planned to decrease the operation cost for an increase in the profit margin. Parkin Laboratories, also wanted to increase the efficiency of the sales force. B.P Chaudhary, chief executive of Parkin, always had in mind that effective sales force strategy is important for achieving the profits in an industry like pharmaceutical. Parkin, chief executive, had a clear picture in mind that the perfect sales team can help in increasing the achievement of growth and also forecasting the sales which are necessary for the company. In the current situation of the Pakrin Laboratories, the company was not having increased in its sales and revenue. The situation was complicated, as the overall sales were though increasing, but the sales by per medical representative was very low.

Role of Medical Representatives in Parkin Laboratories

            Medical representatives play a vital role in increasing the sales of the organization. Similarly, in Parkin Laboratories, the company was having different Medical Representatives. Their key role was to convince the doctors in prescribing their company’s medicine. Medical representatives boosted the promotion of the medicines of Parkin Laboratories and also proved to be quite helpful in increasing the bond between the company and its customers (doctors, dealers and retailers). They were required to market the medicines of the Parkin Laboratories. MRs were also very important for the company, as they encouraged the doctors to prescribe Parkin products or medicines which ultimately led to the increase in sales and revenues. They also created awareness among the doctors and nurses.................

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