Reference no: EM132210156

In 2011, newly appointed CEO Joseph Jimenez distributed a memorandum to all Novartis associates that reaffirmed its mission ‘despite external challenges’ after the publication of Novartis’ 3rd quarterly (Q3) results (Jimenez, 2011: 1). Key Q3 successes of a net sales growth of 12% in constant currencies and various drug approvals are juxtaposed with the challenges facing contemporary global business; an environment that has become increasingly turbulent and competitive with globalisation pressures. The pharmaceutical industry is not exempt, and is aggressively cutting costs where possible in response to mounting government austerity measures (Jimenez, 2011: 2). A 5% price reduction on drugs this year alone by select European governments support the generic drug market; a market that pharmaceutical companies who earn a significant share of its revenue from patents don’t have much experience in (Bennett, 2011). By creating a leaner cost base, keeping R&D high and optimising productivity, Novartis is taking an ambitious global strategy head on to face the global debt crisis and imminent industry-wide patent expirations (Jimenez, 2011: 3).

In order for Novartis to succeed, Jimenez advised his associates that change is necessary and the next 3-5 years will bear witness to an organisation-wide restructuring involving the consolidation and reallocation of select divisions and resources . Novartis did not waste any time and had already cut 1.400 US sales jobs by early 2011, as well as shut down a production site in the UK (Bennett, 2011). 1.100 Swiss jobs and 900 US jobs will be obsolete over the course of the initiative, whilst 700 new positions in China and India will be created in the extended plan of action . Hiring cheaper labour in the emerging markets will strategically offset the jobs lost at the manufacturing facilities that were shut down in Europe (two in Switzerland and one in Italy) .The job cuts approximate 1% of Novartis’ entire workforce, allowing the organisation to generate savings of $200ml annually1.

Assume you are the Business Manager at Novartis. You have been asked to write a report, to be presented to the board of directors, on how a strategic plan should be developed and change implemented in the organization for the next 35 years.

Your report should include the following:

1) An overview of the strategic management process

2) Steps involved in developing the strategic plan including a situation analysis

3) Strategies to be used including Competitive Strategies

4) Implementation or tactical plans

5) Review and evaluation schedule

6) Conclusion