The pharmaceutical industry is one that has been seeking to enhance efficiency in customer relationship management through strategies that involve a transition from the traditional sales force to Key Account Management. However, the transition requires organization changes and is subject to several factors. In that respect, this analysis refers to the case of pharmaceutical companies in Greece for the purpose of analyzing change management that relates to the transition. To achieve the objective, the analysis will provide a literature review and an empirical analysis seek that seeks to answer a number of questions that define the research thesis. Those questions include:
- What are the key transition’s factors that are crucial to the companies’ management?
- What are the key changes resulting from the transition?
- What are the most crucial change management responses to the transition effects?
2. Literature review
Pharmaceutical industry and the transition
The limited access to physicians is a great cause of challenges for pharmaceuticals’ sales force and businesses in the industry have sought to enhance their sales through innovative practices that increase their product’s uptake. In that respect, the companies have sought to transform their sales forces to valuable resources by rolling out strategies to manage their key accounts with their key target market that mainly comprise of physicians. This has resulted to a transition from the sales force tactics that were product driven to a new approach which is more customers- centered.
Overview of Pharmaceutical industry in Greece
The Greece pharmaceutical industry operates under complex and challenging environment and is experiencing fast changes as a means for the Companies to enhance their performance. The country’s healthcare expenditure accounts for 9.5% of the country’s GDP and sales to hospitals account for a 17% of the total industry sales. In addition, the country’s private expenditure on healthcare is 47% of GDP hence being the largest among the EU’s 15 member countries. This is an indication of the need to enhance key accounts management considering that institution customers are forms a significant target market. (Croma, 2014) The industry’s sales performance can be summarized by the sales figures shown on the table.
Total sales values:
Year Value in Million € % change
1996 948.80 -
1997 998.10 5.20%
1998 913.00 -8.53%
1999 1100.00 20.48%
2000 1302.00 18.36%
2001 1560.00 19.82%
2002 1966.00 26.03%
2003 2373.00 20.70%
2004 2869.00 20.90%
Source: (Croma, 2014)
Transition in Greece pharmaceutical industry
Considering the challenges facing the pharmaceutical industry in Greece and the need to enhance companies’ sales, the industry is in transition from the traditional sales force to Key Account Management. The transition can be explained through an overview of the two processes as summarized below.
Traditional sales force