麦肯锡麦肯锡－PHAsectorplan

Thisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfrom某著名企业&pany.Thismaterialwasusedby某著名企业&panyduringanoralpresentation;itisnotapleterecordofthediscussion.SectorPlanOctober,1998BuildingOurPharmaceuticalPracticeinPRCPRCClienteleDevelopmentSUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview1PRCPHARMACEUTICALPRACTICEASPIRATION1999actionplanToberecognizedastheprimarycounselorforaggressivepharmaceuticalMNCstosucceedindealingwithChinaspecificissuesandforlocalenterprisestofaceupchallengesinanopeningmarket,basedonunparalleledreputationfordeliveringtangibleresultsandtransferringindustryexpertise.2SUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview3GCOPHARMACEUTICALCLIENTSChemicaldrugTCMLocalMNCRecent24monthsPastRecent24monthsYuayi-ShanghaiPharmaceuticalsJ&J(3)PfizerNovartis(2)BaxterInternationalBoehringerIngelheimJ&J(7)SmithKlineBeechamNovartisYuayi-ShanghaiTraditionalChineseDrugGuangzhouPharma(2)4TongrentangWuhanHongtaoKGroupShanghaiPharmaGuangdongApolloSichuanTaijiJiangsuYangzijiangShenzhenTaitaiTonghuaDongbaoZhengdaQingchubaoGuilinSanjinGuangzhouPharmaJanssenSmithKlineBeechem*SquibbGlaxoPfizer*AstraRocheNovartisBayerEllyLillyMerkSalesin1997,US$million20015610063544236NCPCNanfang999ShandongXinhuaGuangzhouBaiyunshanShandongLukangHaerbinPharmaNortheastChinaPharmaShijiazhuangPharmaLocalMNCTARGETCLIENTELERANKEDBYSALES5ClientShanghaiPharmaGuangzhouPharmaNCPCNanfang999More……..ProgressTalkingabout3rdphase??2ndphaseinprogress,talkingaboutthe3rd??SalesforceeffectivenessworkshopsuccessfullyconductedSeveralroundsofdiscussionwiththetopmanagementReadyfordiscussionofLOPAdamecispreparingadiscussionpackonUSmarketstrategyReadyforfirstdiscussionCLIENTELEDEVELOPMENT/RELATIONSHIPCONTINUENCYINPROGRESS6TargetclienteleNCPC(Shijiazhuang,Hebei)ShandongXinhua(Jinan,Shandong)GuangzhouBaiyunshan(Guangzhou)Revenue1997304815761379OwnershipSOE,NCPCLtd.listedSOE,listedinSHandHKListedinSHCAGR92-9637%29%8%ments#1amonglocalAsia’slargestantibioticsproducersignificantexpansionsincemid1980’sHighaspirationoffurthergrowthDominatingtheanalgesics&antipyreticsmarketwith20-30%marketshare.Losingmoneyin1997,duetointernalmanagementproblemandimproperbusinessdiversificationRecoveringin1998,with44%salesgrowthDeterminedtofocusonantibiotics,physicianmedicineandrealestateManagementreadinessTARGETPHARMACEUTICALCLIENTELES-CHEMICALDRUGS(1)RMBmillion7TargetclientShandongLukang(Jinan,Shandong)HaerbinPharma(Haerbin)DongbeiPharmaRevenue1997939935877Owner-shipListedinSHListedinSHListedinSHmentsManagementreadinessTARGETPHARMACEUTICALCLIENTELES-CHEMICALDRUGS(2)RMBmillionAntibioticsscalenexttoNCPCandHaerbinR&Dandqualityadvantage30%shareinantibioticsmarketSalesin1sthalf1998fellduetoenvironmentproblemsandpoweraccident.Conglomerationofproduction,tradepaniesand48chain-stores.Diversifiedproductportfoliocoveringantibiotics,TCMandbioproducts.Consistentchannelmanagementamongtradingsubsidiariesascurrentmanagementfocus.Oneofthe“BigFourFamilies”togetherwithNCPC,TaiyuanPharma(mergedwithNCPC)andShandongXinhua.VCandantibioticsproducerIntegrationofresearch,productionandsales&marketingascurrentmanagementfocus.CAGR92-9631%18%13%8Conglomerationof4pharmapaniesmergedin1997ProducingVC,antibiotics,enzymeandbioproducts.Changingmindsetfromfocusingonhospitalstoendusers.Withaggressiveplantoexpandsalesforce,establishmoresalesofficesandinvestheavilyinmarketingandadvertisement.VerysuccessfulconglomerationdevelopedrapidlyviaM&AwithformermilitarysupportBusinesscoveringrealestate,beverage,agricultureandfinance.,TargetclientShijiazhuangPharmaGroupNanfang999Revenue19977002054OwnershipSOE,withawindowpany(ChinaPharmaEnterprisesInvestmentCo.)listedinHKListedSOECAGR93-97?????13%mentsManagementreadinessTARGETPHARMACEUTICALCLIENTELES-CHEMICALDRUGS(3)RMBmillion9TargetclientTongrentang(Beijing)WuhanHongtaoKGroup(Wuhan,Hubei)GuangdongApolloRevenue199615901260(1997)419OwnershipListedSOEPrivateListedCAGR92-9679%??-20%mentsManagementreadinessTARGETPHARMACEUTICALCLIENTELES-TCM(1)RMBmillionPowerfulbrandinChina.Highlyintegratedresearch,production,retailing(andevendiagnosis).SuccessfuldiversifiedproductportforliorecognizedastraditionalChinesetherapiesandtonics.OneofthemostsuccessfulprivateenterprisesinChinaVeryrapidgrowthsinceestablishmentin1993HeavyinvestmentonR&Dandmarketingnetwork100millionRMBinvestedtorestructure15SOEsbyM&Aetc.KeenonfurtherexpansionSalesshrank1/6from1993,duetoimproperbusinessdiversificationandmanagementdeficiency.Determinedtoturnaroundbyfocusingonorganizationre-structuring,productportfoliore-designandcostcutting.10TargetclientSichuanTaijiJiangsuYangzijiang(Taixing,Jiangsu)ShenzenTaitaiRevenue1996375

297???OwnershipListedin1997SOEconglomerationCollectiveCAGR92-96mentsManagementreadinessTARGETPHARMACEUTICALCLIENTELES-TCM(2)RMBmillionOneof10keyTCMenterprisesidentifiedbyNationalTCMAdministrativeAgency.StrongR&Dcapability.Goodperformanceamonglistedpanies.Financeingoodshapeandsalesgrowing60%in1sthalfof1998WithitsownR&Dcentreandresearchinstitute,8newproductslicensedin1997byMOH,8inR&Dprocessand8istobeputintoproduction.HeavyinvestmentinadvancedproductionequipmentandmedicalexpertrecruitingSalesgrowth25%KeenonexpansionHeadhuntedseniormanagersfromSKB,Uni-liverandJanssen.

114%????27%11TargetclientTonghuaDongbao(Tonghua,Jilin)ZhengdaQingchubao(Hangzhou,Zhejiang)GuilinSanjin(Guilin,Guangxi)Revenue1996287275267Ownership

?mentsManagementreadinessTARGETPHARMACEUTICALCLIENTELES-TCM(3)RMBmillionSharholdingShareholding,conglomerationStateOwnedSalesgrowth35%in1997.Amongtop10TCMproducersSignificantexpansionviaM&A.LocatedinTCMmaterial-abundantarea.Favoredbylocalmunicipalgovernment.CoreenterpriseinHangzhouwith30JVorshareholdingpanies100products,planingtobemorefocused30millionRMBworthofstatedownedsoldtoemployees.Profitincreased10times92-96.Goodbrandnameinitssegmentandwell-sellingproductKeenonfurtherexpansionCAGR93-9740%??????12panyNCPCShandongXinhuaGuangzhouBaiyushanShandongLukangHaerbinPharmaDongbeiPharmaShjiazhuangPharma

CEOnameTextYearswiththepanyTextQualificationbackground(academic,workingexperience)TextCLIENTELECEOPROFILE-CHEMICALDRUGSOthermentsTextINPROGRESS13panyTongrentangWuhanHongtaoKShanghaiPharmaGuangdongApolloSichuanTaijiJiangsuYangzijiangShenzhenTaitaiTonghuaDongbaoZhengdaQingchunBaoCEOnameTextYearswiththepanyTextQualificationbackground(academic,workingexperience)TextCLIENTELECEOPROFILE-TCMOthermentsTextINPROGRESS14Developedrapidlyinthepast10yearsWithdiversifiedproductportfolioandveryspecificsegment.AggressivelyinvestingonR&D,marketing,salesforcedevelopmentandhumanresourceAspirationclosetooperational/actionlevelConcentrateinSouthChinaFacingmultipleissuesspecifictoChina-regulatoryandeconomic,withwhichtheystillneedtobuildexperience.ExpectingfurthermarketpenetrationandproductintroductionMostlySOEconglomerationChangingmindsetfromproduction-orientedtomarket-oriented,thereforeneedbasicmarketstrategydirectionsConcentrateinNorthChinaLocalMNCEACHCLIENTELESEGMENTISFAIRLYDISTINCTIVE15MNCs,chemicaldrugsLocal,chemicaldrugsLocal,TCMHighPriorityissuesChinamarketdynamicsMultipleregulatoryissuesMarketorientedmanagementsetup.ProductstrategySalesandmarketingenhancement.1379ManagementreadinessASSESSMENTOFPHARMACEUTICALCLIENTELESEGMENTSFinancialstrengthApproachingKSFsmunicationwithheadquartertopmanagement.Demonstrationof某著名企业ChinaMNCconsultingexpertiseandChina-specificindustryknowledge.Brainwashingthetopmanagersbydiscussingwiththemontheirownissuesusing某著名企业methodologyandtools.(e.g.workshops)Patientmunicationwithtopmanagment16SUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview17EXTERNALREPUTATIONBUILDINGMajorassociationsKeygovernmentagenciesLeadingmediaChinaMedicalAssociationChinaChemicalDrugIndustryAssociationChinaMedicalTradeAssociationChinaForeignPharmaceuticalpanyAssociationMOH(MinistryofHealth)SPSA(StatePharmaceuticalSupervising&administrationAgency)STAC(StateTCMAdministrationAgency)MinistryofLaborandSocialSecurityChinaMedicalIndustry

ChinaChemicalDrugIndustryInformationChinaHealthChinaPharmacyChinaPharmaceuticalBusinessUpdate18MAJORINDUSTRYASSOCIATIONSGroupChairmanMembershipValueto某著名企业ChinaNationalMedicalAssociationChinaChemicalDrugIndustryAssociationChinaPharmaceuticalEnterprisesManagementAssociationChinaMedicalTradeAssociationChinaForeignPharmaceuticalpanyAssociation????WuTingbao,CEOofNortheastPharmaCo.Keyhealthcareinstitutions(medicalexperts)LocalchemicaldrugproducersLocalpharmaceuticalpaniesPharmaceuticaltradepaniesPharmaMNCs,initiatedbyJanssenMajoractivitiesGovernmentmoveinhealthcareAcademicactivitiesIndustrycodedesigning,strategymunicationandindustry-wideinitiativesIndustrycodedesigningandinformationupdatingMarketdynamicsandregulationmunication19KEYGOVERNMENTOFFICIALSGovernmentAgencyFunctionafterre-structuringValueto某著名企业

MOH(MinistryofHealth)SPSA(StatePharmaceuticalSupervising&administrationAgency)STAC(StateTCMAdministrationAgency)MinistryofLaborandSocialSecurityNationalhealthcarepolicydesignandoverallexecutionSupervisinghealthcareorganizationsMedicalproductlicensingSupervisingpharmaceuticalmanufacturingandtradepaniesInchargeofpharmaceuticaladministrativeprotectionSupportingTCMresearchdevelopment(technicalandacademic)ReporttoMOHRDLpolicyexecutionRDLlistdeterminationKeyofficialsZhangWenkangZhengXiaoyuVice:ZhuJie,ZhangHongkui20LEADINGMEDIATitleFormatPositioningChinaMedicalIndustryChinaChemicalDrugIndustryInformationChinaHealthcareChinaPharmacyChinaPharmaceuticalInformationMonthlyMonthlyBio-monthlyUpdateofindustrydevelopment,medicalresearchandperspectiveonfuturedevelopmentUpdateofproductandenterprises,perspectiveonmarkettrendHealthcarepolicyandadministrationCoremedicalproductjournalinChinaMarketdynamicsupdateandproductinformationMajorissuerSPACinformationcenterChinaChemicalDrugIndustryAssociationChinaChemicalDrugIndustryAssociationChinaPharmaceuticalIndustrialGeneralCo.MOHMedicalAgencyofMOHSPACinformationcenterChinaPharmaceuticalTradeAssociation21IndustryassociationsdifficulteasyEaseofaccessLowHighImpactASSESSMENTOFEXTERNALREPUTATIONBUILDUPTARGETSGovernmentagenciesIndustrymediaMajorvehiclesSeminar,speechesatmeetingsSeminar,speeches,workshopArticles22PRIOR某著名企业CHINAPHARMACEUTICALEXTERNALREPUTATIONBUILDINGDateFormatTitleAudienceAuthor/presenterSep.98WorkshopSalesforceeffectivenessworkshopNCPCMikeSherman,GordonOrr23EXTERNALREPUTATIONBUILDINGPLANTopicResponsibilitiesPreferredmediaandapproach24SUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview25KNOWLEDGEBUILDINGPROGRAMPDeffortsFactpackeffortsAuthors/leadershipYing&yangMarketingSuccessfulsalesandmarketinginChina??????RichardZhangMikeShermanDoneInitiative26SUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview27PEOPLEProjectMGMsSEMsEmsAssociatesBA/CAsGordonOrrTCChuJonanthanWoetzalTonyPerkinsDanialAdamecSaimondIpRichardZhangPeterKenevaneKevinLaneChennyLinYibingWuJaneXuZQLiCarlYangDominicChanLemengZhangPingPingJoannaYaoPoHouSKB,Novartis,PfizerSKBJ&J,SHPharmaPfizerNovartis,Baxter,BoehringerIngelheim,GZPharmaGZPharmaSHPharmaNovartisSKBNovarris,SHTCM,J&JGZPharmaPfizerPfizerGZPharma/J&JBarterSHPharmaSHPharma28NEXTSTEPFORCLIENTELEDEVELOPMENTContactglobalCSTtodevelopMNCclienteleInvite某著名企业PharmaspecialisttoChinaHolda某著名企业PharmapracticeConferenceinChinaMNCLocalNewersBuild某著名企业awarenessamongtargetclientelethroughpharmamagazine,e.g.,“ChinaPharma”andothermediaInvitekeyclienteletopharmaworkshopAssignCSStoeachclienteleIdentifyandprofilenewersinpharmaindustryUnderstandthekeyissuesofthenewers29SUMMARYAspirationTargetclienteleExternalreputationbuildingKnowledgebuildingPeopleAppendix-Industryandplayersoverview30US$billionCHINAPHARMACEUTICALMARKET1994ChemicalDrugTCM19951996199718%CAGR28%7.38.910.712.7TCM31US$million*TOPJVPLAYERS:SALESANDPROFITTRENDS929394959697929394959697929394959697SalesPretaxprofitXian-Jassen(Jassen)TSK&F(SB)SquibbCAGR92-97CAGR92-9727%21%20%15%26%-2%***N/AN/A32US$million*TOPJVS:SALES/PROFITTRENDPretaxprofitCAGR92-97CAGR92-97959697WuxiAstraJ&J32%96929394959697Sino-Swed(Pharmacia/Astra**)14%15%94959697DalianPfizer54%216%N/AN/A33US$million*TOPJVS:SALES/PROFITTRENDPretaxprofitCAGR92-97CAGR92-9794959697HangzhouHuadong16%6%N/A949596

GuangzhouGreencross-3%-5%959697ShenyangNovoNordisk33%58%N/AN/AN/A9596ShanghaiRoche-46%

34US$million*TOPDOMESTICPLAYERS:SALESANDPROFITTRENDS–CHEMICALDRUG929394959697929394959697929394959697929394959697PretaxprofitHuabeiPharmaceuticalCo.Shenzhen999GroupGuangzhouBaiYunShanEnterpriseCo.ShandopgXinHuaPharmaceu-ticalCo.CAGR92-97CAGR92-9737%13%8%29%24%31%17%19%35US$million*TOPDOMESTICPLAYERS:SALESANDPROFITTRENDS–CHEMICALDRUG9293949596929394959692939495969293949596PretaxprofitHarbinPharmaceu-ticalCo.DongbeiPharmaceuticalGroupShangdongLuKangPharmaceuticalCo.ZhuhaiLivzonPharmaceu-ticalCo.CAGR92-96CAGR92-9618%13%31%51%22%0%44%35%36US$million*TOPDOMESTICPLAYERS:SALESANDPROFITTRENDS–CHEMICALDRUG929394959694

97SalesPretaxprofit某著名企业红桃KCAGR92-96CAGR92-9611%11%N/A37US$millionTOPPLAYER:SALES/PROFITTREND–TCM9293949596929394959692939495969293949596SalesPretaxprofit北京同仁堂上海药材成都地奥广东太阳神CAGR92-96CAGR92-9679%50%37%-20%26%-2%42%-21%N/AN/AN/A38US$millionTOPPLAYER:SALES/PROFITTRENT–TCMSalesPretaxprofitROS%四川太极93-96CAGR93-9693949596114%121%93949596正大青春宝35%82%39PHARMACEUTICALJOINTVENTURESINCHINA–1982-1996ChinaOtsukaSino-Swed1996199419921990198819851982SquibbTSK&FPfizerGlaxoAbbotCiba-GeigyWarner-LambertJanssenMerckRhone-PoulencRocheSchering-PloughTakedaJ&JPharma

AstraBaxerBohemannEntrantYear>6001240Hoechst40MNCPHARMACENTICALCLIENTELE–CHEMICALDRUGSpanyLocationYearInititalinvestmentPlannedfutureinvestmentOwner-shipPartnerJanssenXian1988$43.4million65%ShanxiPharmaIndustryHanjiangPharmaceuticalFourpartnersunderstatePharmaceuticalAdministration34productsSKB-TianjinTianjin1985$18million55%TianjinPharmaceuticalCo.TianjinAminoAcidCorp.ContactPanadolSKB-ShanghaiPudong,Shanghai$30.4millionN/AShanghaiInstitudeofBiologicalproductCo.ContactPanadolSquibbShanghai1985$34m,initially58%SHCorporationofPharmaceuticalTechnicalCorporationChinaNationalPharmaForeignTradeCorporationVelosetAzactamKenbCapotenProvachol$300mby2000PfizerDalian$50.4million60%DalianpharmaceuticalCo.HoechstShijiazhuang$30millionN/AHuabeipharmaceuticalFactory1994EllyLillySuzhou$28millionCeclor,ProzacJ&JShanghaiTylenolBand-Aid$70millionShanghaiBiochemicalCo.198890%AstraWuxi1994$7.2millionby2000MajorityWuxipharmaceuticalCorporationWuxiDevelopmentZoneCorporationPharmaceuticalformulationsUS$98mmby200041MNCPHARMACENTICALCLIENTELE–CHEMICALDRUGSPlannedfutureinvestmentOwner-shipPartnerRoche-JV3Shanghai1997$30millionMajoritySHNo.6PharmaFactoryConcentratedVitaminspecialitymixes,VitaminpremixRoche-JV4Pudong,Shanghai1997$29.6million60%SHNewAsiaticPharmaceuticalLtd.VitaminB6Roche-JV1Pudong,Shanghai1994$45million70%SunvePharmaceuticalCo.RocephinRoferon-ACelkeptXenicalPosicorRoche-JV2Shanghai

1997$20million60%SunvePharmaceuticalCo.VitaminERochetotal$200millionbyearly2000centuryAbbotNingbo1988$2million50%NingboPharmaceuticalFactoryEnzymeDiagnosticReageatsNovartisBeijing1988$22.8million$130million(national)60%BJGeneralPharmaCo.BJNo.3PharmaFactorySandimmunNeoralVotalinSandostatinLotensinLesolLamisilTabChongqing1988$13minitially$36mto199655%initially88%by1993SouthwestNo.3Pharma-ceuticalFactoryofChongqingChinaNationalPharmaForeignTradeCorporationVentolinBecotideBeconaseGlaxoSuzhou$100millionAnti-bioticsinjectionsLamivudine42MNCPHARMACENTICALCLIENTELE–CHEMICALDRUGSpanyLocationYearInititalinvestmentPlannedfutureinvestmentOwner-shipPartnerMainproductsMSDHangzhou1994$19.2million75%HangzhouEastChinapharmaceuticalFactorySuzhou1987$14million50%ChinaNationalPharmaceuticalForeignTradecorporationCapsuleWar