Market Leader Strategies: AstraZeneca Defending its Turf

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Case Details:

Case Code : BSTR271
Case Length : 19 pages
Period : 2001-2007
Pub Date : 2008
Teaching Note : Not Available
Organization : AstraZeneca Plc.
Industry : Pharmaceutical
Countries : Europe; USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

On April 6, 1999, two pharmaceutical companies - Astra AB (Astra) of Sweden and UK-based Zeneca Group Plc (Zeneca) - merged and formed a single entity called AstraZeneca. Analysts felt that the amalgamation would be smooth as the two companies shared parallel work cultures and visions pertaining to the pharmaceutical industry. (Refer to Exhibit I for AstraZeneca's logo)...

Losec/Prilosec - The Purple Pill

Post merger, Losec/Prilosec was one of AstraZeneca's most successful brands.

It was the most successful PPI in the market and was responsible for the company being considered the market leader in the treatment of gastric acid related diseases.

In 1999, the market for the treatment of gastric acid related diseases was US$ 18 billion and Losec/Prilosec had sales of US$5.9 billion...

The Impending Shark Fin

Losec/Prilosec was a cash cow for AstraZeneca. The brand's sales between 1997 and 2001 were a whopping US$26 million. With the patent of the brand set to expire in 2001, the company was in danger of losing its market leadership in the PPI market as well as in the treatment for acid-related disease market. PPIs were a fast growing segment with Losec/Prilosec spearheading the sales...

The Shark Fin Project

But the erstwhile Astra had already planned for this eventuality. In the year 1995, Astra along with Merck, formed a team of experts which included marketers, lawyers, and scientists, who studied Prilosec and came out with around 50 possible solutions to outsmart the patent-expiration peril...

Launching Nexium

The company received marketing approval for the drug in the EU in July 2000 and in the US in February 2001. The drug was first launched in Sweden. In 2000, the brand was also launched in the UK, Germany, Ireland, Norway, and Denmark...

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