
Novartis
Novartis, a Swiss drug maker, is planning to purchase a majority stake in Zhejiang Tianyuan Bio-Pharmaceutical Company, a Chinese vaccine maker. Novartis has agreed to pay $125 million for the company that holds a 3% share of China's $1 billion vaccines market. The market for vaccines is growing 20% or more in developing nations of Asia, Africa, and Australasia. In the past, vaccine use has been limited to basic shots against diseases such as polio, tuberculosis, and measles, but as the economies of these countries grow, government and private healthcare spending focuses on preventing diseases such as hepatitis B, cholera and rotavirus, tetanus, and others. Some critics are against the acquisition, claiming that prices will increase. Novartis claims it is not interested in raising prices but rather to expand Tianyuan's product offerings.
-Refer to Novartis.One thing Novarti plans to do is increase sales to governments and to the United Nations agencies because these are the typical buyers of vaccines to distribute in poor countries. Thus,the company is willing to give up short-term profits to increase market share for this company. In terms of the Boston Consulting Group's portfolio matrix,which basic strategy will Novartis be implementing?
A) hold
B) harvest
C) divest
D) build
E) divert
Correct Answer:
Verified
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