Morepan Positioning Strategy - Essay Example

 In order to sustain a competitive advantage in the marketplace, a firm must be able to provide value to its customers in terms of customer surplus, i.e, what the customer is willing to pay for a product but does not need to pay because the Company is able to achieve a cost advantage in its production.(Positioning Strategy). As a result, economic value is created for the customer, which provides the Company’s products a competitive advantage as compared to similar products offered by other Companies.

In the case of Morepan, it may be noted that the new policy adopted by Sushil Suri has focused upon creating economic value and customer surplus for the customer, through entering into strategic arrangements to maximize its ability to supply products as lower costs to customers. This may be noted in the case of pharmaceutical ingredient loratadine, which was due to go off patent. By entering into the distribution agreement with Geneva Pharma to be the sole supplier, the Company was able to provide a cost advantage to its customers.

Moreover, in the case of bulk drugs, the Company has moved into high margin drug products where the multi -production processes are long and complex; however by developing the necessary technical capabilities to tackle such processes in a cost effective manner utilizing low labor costs in India and supplying to international markets, Morepan has been able to create economic value for its customers. Similarly, Morepan has also positioned itself not merely as a bulk drug company in the Indian market, but has consolidated its position and created customer value by also entering into the Fast Moving Health Goods category.

By hosting an entirely new range of products which could be directly marketed to the customers rather than having to reply upon physician prescriptions, the Company was able to gain direct access to the end customer unlike other drug companies. It developed a range of health products such as Lifelyte which was an electrolytic rehydrate, Y Sugar which was a sweetener, Dab fizz an antacid, and similar products which could directly be targeted at the end customer and marketed vigorously through effective sales and advertising techniques.

In this way, the Company ha uniquely positioned itself in the market for health food products. Recently the Company has further expanded its reach into the retail sector in the health care market, through the creation of the Lifespring chain of health and beauty stores, with aggressive plans to expand into various cities in India and generate higher revenues in 2007. Morepan’s original served market has been the bulk drug sector, however this market has its own constituent segments, each with its own value creation profile.

By expanding into a wider range of products, the Company is able to extend the scope of customer surplus value into other segments and thereby arrive at higher profits and create a unique position for itself as compared to its other competitors. From the bulk drug sector, it has expanded into relative sectors, such as the health food sector and the retail sector. As a result, it has positioned itself to provide higher surplus value to the customer and therefore creating economic value. It allows Morepan to successfully compete with its rivals by allowing it sufficient scope to continue to enjoy a competitive advantage in terms of price and customer value, even if some rise in prices ensures.

References:* Positioning Strategy.