Arogya Parivar Case Analysis
By- Group 4 Sec - C
What is the concept of Shared Value? Companies are widely thought to be prospering and proliferating at the expense of communities. Business has Often been criticized as a major cause of social, environmental and economic problems. As a consequence, government officials are forced to set policies that undermine competition and hamper economic growth. Thus, business is entangled in a mess. One of the major reasons for such a scenario is the narrow approach of companies towards value creation. Mostly. companies are focused on financial performance and do not pay heed to the unmet needs in the market as well as broader influences on their long-term success. Such a scenario can be avoided by using the concept of shared value. It is defined as generating economic value in such a way that produces value for society by addressing its challenges. A shared value approach reconnects company success with social progress
Is this concept applicable to Novartis, and if so, where? Yes, the concept of shared value is applicable to Novartis.
Novartis' senior management had given a nod to investigate BOP opportunities supported by a simple mandate: To prove that Novartis could sustainably improve access to healthcare for the world's poor. A team was assembled to initiate a two-step process: o To identify a target country and a market segment with the potential to improve health results for poor people at scale while yielding economic value for the company o After understanding the needs of the target market, to decide on the specific approach Novartis should take, be it developing a new product/service or strengthening local supply chains India was the choice as first priority given the evident growth potential of the market
What are the necessary ingredients for success? The necessary ingredients which Novartis needed for success are:
Clarity on poor from urban or poor from rural To be in a position to invest to develop this new customer segment How is traditional "go-to-market" had to evolve to reach the new segment? Aligning the new business model with its other business activities without causing conflict or disruption Managing and staffing the new business Scalability Sustainability Information on local healthcare consumption patterns The way patients sought treatment Cultural aspects of healthcare Existing barriers to entry Involvement of Rural Medical Practitioners (RMP) as they were often a pillar of community Involvement of Auxiliary nurse midwives ( ANM), Angan Wadi workers (AWW) for generating awareness
Discuss the challenges for Novartis? 1. Infrastructure issues would impede growth 2. The unreliability of the supply chain had a negative impact on patients' trust in the system and willingness to continue with the treatment 3. A struggle to educate patients and even the doctors 4. Finding a way to recruit more females 5. Changing local beliefs and habits associated with healthcare services was an uphill task
How did Novartis resolve these challenges? Identify the options and discuss the pros and cons of each? Options: Problem 1: Infrastructure issues would impede growth Actions: 1. Use of Tata Tempo Traveler 407 with A/V equipment and an inverter to provide electricity, which would ferry a couple of HEs, a driver and a support staff 2. Collaborate with other organizations 3. Put on a 15-minute street theatre using local village actors to deliver Arogya Parivar's message. 4. Tap the public-speaking skills of the HE through story telling
Evaluation Action Number
1
Pros
Van would travel some 50-60 km a day, targeting select villages in UP, attracting audience of 500 or more
Cons
Cost and constraints of pavements being too narrow to reach the heart of the villages 80$-100$ a day, the van was expensive and resource-intensive.
Sandoz and chewable calcium were passed down to women 2
Reduce cost
Time allocation to Arogya message was unclear When the message would appear relative to other party's messaging was unclear
3
Cheaper way Actors costed $15-$17
No standardization No consistency Actors did not like to travel and were unable to commit to more days as they had their own business to run
4
Dependence on standard script
Problem 2: The unreliability of the supply chain had a negative impact on patients' trust in the system and willingness to continue with the treatment Actions: 1. 2. 3. 4.
Build a direct distribution of network to the small villages Use HE as deliverymen Appoint NGOs as secondary distributors Motivate existing distributors to help
Evaluation Action Number
Pros
Cons
1
Restrictions on number of distributors Not efficient for Novartis to expand its own distribution given the current scale
2
Legal and ethical constrains Required drug distribution to be done by qualified pharmacists due to quality issues
3
Partnering with NGO, they were often not allowed to sell products Cannot make profit
4
Can create revenues and profits Customized journey plans can help reduce cost Replenishment cycles can help optimize logistics
Problem 3: Changing local beliefs and habits associated with healthcare services was an uphill task Actions: 1. Suggest correct therapy on top of the village practices 2. Infotainment 3. "Liquorish" Flavor
Evaluation Action Number
Pros
1
More adoption of medicines Repeat purchase
2
Increase buy-in
3
Repeat purchase Easy to consume
Cons
Not strictly ethical
Pilot Actions 1. Arogya Parivar started as an outsourced, separately managed unit that operated independently of Novartis 2. Novartis decided to work with Teamlease, a local recruitment agency, to recruit HE 3. The HE were trained in TB, nutrition, allergies and infections so that they can give sound advice 4. The role of HE was to create awareness of the Arogya umbrella program and availability of services 5. In the beginning HE targeted community meetings and then use the audience to talk about the symptoms of TB, the cure ad the Arogya Parivar program. 6. To cater to local preferences and cultural biases, education topics and programming, as well as the form of delivery were adapted by the HE 7. On the distribution side, Arogya Parivar worked to develop a network of doctors to take on patients, as well as a network of chemists/pharmacists to stock relevant products using sales supervisors (SS) 8. To ensure that there was no push back from the government of government doctors, Parivar also contacted government doctors and told them about the program, all the while making sure that there was no criticism of the DOTS program.
