STRATEGY
THE GLOCALISATION CHALLENGE This article introduces the concept of glocalisation and describes why it is has become the essential strategic capability. It will contrast the increasingly global nature of the pharma market, both supply and demands sides, with the continuing importance of locally-specific market conditions, such as market access, competitive environment, healthcare systems and market segments. The implications of this 'local needs in a global market' situation is that firms need to develop superior capabilities in "glocalisation" (the adaptation of a core, global strategy to local market conditions). The article will use examples to illustrate shortcomings in firms' current glocalisation capabilities and outline a three-part approach to improving these, thus setting up the rest of the series. Brian D Smith, Principal Advisor, PragMedic
When your business is global but your markets are local, you must glocalise.
T
he pharmaceutical industry has changed dramatically since I first stood at a laboratory bench in the 1970s. Then, drug markets outside of “the west” were considered insignificant and competition from those developing markets was inconsequential. But today I live in a hugely different world, in which no company can ignore the opportunities and threats presented by what is a truly global pharmaceutical industry. But the globalisation of our industry has created a dilemma. Our competitors and customers are global but our markets remain intensely local. Biology defies borders, but the same is not true for regulation, competitors, health-
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P H A RM A F O C U S A S I A
ISSUE 49 - 2022
care systems, reimbursement systems, cultural preferences and many other market factors that remain essentially local. This 'global but local’ nature of our market means that the challenge is to keep the scale and scope advantages of a global strategy without sacrificing the competitive advantage that comes from tailoring to local needs and wants. This is the glocalisation challenge. This article, the first in a series of four, will help you to understand the challenges and promise of glocalisation and why many life science firms fail to glocalise. It will introduce the practices that enable the best firms to succeed at being simultaneously global and local.
In subsequent articles, I will expand on those best practices based on my decades of research into our evolving industry. Why Globalise?
The pharmaceutical industry has been an international industry since first German and Swiss, and later British and American, companies evolved into the modern industry in the late 19th, early 20th century. Even in their earliest days, firms like Merck, Bayer, Roche, Pfizer and others were quick to sell their innovative products outside of their home markets. But for more than a century, pharmaceuticals remained an international rather than global industry, with the vast