Weikang Pharmaceuticals

EXECUTIVE SUMMARY – WEIKANG PHARMACEUTICALS

This project report provides problems and analysis of Weikang Pharmaceuticals growth rate over the years and their marketing strategy as compared to competitors over the same period.

Weikang Pharmaceuticals was established in 2005. Its main products are high technology biomaterials (biological or synthetic substance which can be introduced into body tissue as part of an implanted medical device or used to replace an organ, bodily function, etc.) like TISTAT, Surgicel and Gelatin Sponge. Since 2005 the company has achieved rapid growth, with over 300 employees and an annual operating income of ¥85.88million. Its products are sold all over China and exported to many other countries.

Weikang Pharmaceuticals has been performing outstandingly in the field of surgical hemostatic materials in China with their product TISTAT currently occupying 80% of the market share. Sale of TISTAT has exceeded 300 million units and the company’s sales revenue has maintained an annual growth of 130% in the last three years and an 80% increase in net profit.

The company also has a policy of no trade credit it supplies to its distributors only when they make 80% of the payment at the time of placing the order and the rest within 7 days of the delivery. The product sales and promotion are also conducted by regional distributors. To manage this Weikang Pharmaceutical has divided the market into different units or territories on the basis of number of hospitals or the geographical area of the regions.

In the given case there is a conflict between the two distributors, Li Zhong distributor in Liuzhou and Sun Qiang is the distributor from Nanning.

In 2011 Li Zhong met with the director of department for medical devices at Nanning Second People’s Hospital which was a large polyclinic Hospital in Nanning.

Various point of views were discussed at the meeting and responses from the survey were studied.

Based on carefully analyzing the views put forth at the meeting and the results of the survey, we believe that a peaceful solution between the two distributors is the ideal option.