Milligan Pharmaceuticals, over decades, has established a strong brand name for itself. The company’s main strength has been its outstanding management team and futuristic approach in the past that has given it the leadership in industry. Milligan pharmaceutical’s revenues have reached to $768 million by 2007 with a unique system of exclusive trainings to medical representatives and sales managers. The company has a strong financial position based on its past performance and industry linkages and the sales team is referred to as one of the best in market.
The organizational setup and chain of command at Milligan is top-down creating a vertical structure with less authority given to middle and lower management. The company is facing fierce competition from the competitors in its generic drugs and new drugs unit. The CEO has been impromptu in taking decisions regarding research activities of the company for creating new drugs as well as the sale of current drugs. There is a lack of focus on current products’ sales and distribution of attention by salespeople and MRs.
The sale of specialized drugs is ignored by MRs and management that have resulted in captivation of that market by competitors. The MRs lack training regarding specialized drugs and the compensation techniques of company are questionable and ineffective given the outcomes it is generating. The company lags behind the industry in its development of new drugs, therefore, losing market share and stagnating growth. The revenue growth for Milligan is only 4. 4% over the past four years whereas for its direct and indirect competitors its 7. 5% and 11. 7%.
Milligan’s presence is although vast across the country, yet the mainstream of revenue comes from Northeast region, to which management has paid no special attention unlike the competitors. There is lack of clarity concerning the job responsibilities and description of the MRs. The lack of product variety and market driven strategies have resulted in low motivation level for the sales force and thus a higher turnover rate compared to the industry.
Milligan Pharmaceuticals’ management requires swift shift in its management style and approach towards certain divisions.
Milligan’s management can capitalize on its strong financial position compared to industry and restructure its efforts for increase in revenues. Firstly, the company needs to prepare for the competition that is prevailing in industry and invest aggressively in research and development to come up with innovative products. This will bring Milligan in league with the rest of industry in specialized drugs. Secondly, the marketing department of the company needs to restructure its strategies and functions for the sale of products.
Milligan has outsourced sales managers who can be trained further and with clarity for company’s objectives. The sales team should be communicated well about their job requirements and the outcome management expects in each individual unit of drug. The compensation strategies need to be revised for marketing department to makes the MRs loyal to the firm. The company can offer a minimum salary packages along with sales commission to make MRs a part of company. The MRs can be involved in decision making by demanding an input from MRs regarding potential sales areas and profitable regions.
Given the current stage in company’s life cycle, the stagnant growth of Milligan can turn into declining trend, losing the market share and position. The intense competition in industry and strict legislation demands more aggressive approach by pharmaceutical firms. If Milligan continues with its conservative approach, it will soon lose market share in specialized drugs to the competitors. Also this can lead to loss of the sales force and higher turnover due to low satisfaction and de-motivation.
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