Marketing Strategy of Valeant Pharmaceuticals International

by Jason Shaw


  • Introduction
  • Leadership Issues
  • External Conditions
    • General Environment 
    • Industry Environment 
    • Competitor Environment 
  • Internal Strengths and Weaknesses
    • Strengths
    • Weakness
  • Strategy
    • Product Strategy
    • Marketing Strategy
    • Acquisition Strategy
  • Conclusions
  • References


North American-based Valeant Pharmaceuticals is countering significant improvements in its executive system, which makes the organisation accept diverse cultures and new philosophies. Because of the decline in equity values in the region’s stock markets, the organisation is found to fight greater stresses. The organisation was tempted to recognise persistent losses by this declining location of its stock alongside its poor capital base. With the transition of ownership structure, though, business administrators are now implementing innovative tactics to further win an expanded demand and thereby counteract an increase in future sales. Strategies such as the purchase of smaller and poorer businesses and even of goods have allowed the organisation to broaden its North American product and business portfolio. In addition, marketing campaigns to gain hold of future customer and business bases are also being established. Value added development via the company’s social events also allowed it to strengthen the company’s partnerships with the customer profile. This strengthened interaction allows the business to receive efficient input from the customer profile and hence to enable corresponding adjustments to the goods and services delivered. The organisation, however, needs to work to develop its internal capabilities to better meet the expanded requirements (Arnold et al. 246-257). In this respect, the paper focuses on carrying out a situational study of the company’s success metrics in the North American market. The situational analysis would work in understanding the impact of changes in the leadership structure of the company. Further it would also endeavor to understand the need for bringing about new changes in the policy structure of the company both in regards to gaining an extensive market and product base. The paper would also endeavor to conduct a brief analysis of the industrial and socio-economic environment of the region which would help the company in devising effective strategies.

Marketing Strategy of Valeant Pharmaceuticals International

Leadership Issues

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The leadership issues at Valeant Pharmaceuticals happened owing to shift in ownership of controlling the company along many hands. It is found that in the initial stage owing to problems in meeting the needs of the shareholders the captainship of the company was given to Robert W. O’Leary who took over as the new Chief Executive Officer. O’Leary strategized the operations to help create a knowledge firm which would help produce quality pharmaceutical products for the extended market. Further the strategy envisaged by him also worked in investing in the growth of strategic units which worked in consonance with the policies of the business organization. On the contrary divestiture plans were envisaged in regards to the units which were not performing in consonance with the organization’s needs. Thus many units pertaining to Central and Eastern Europe and also other units in Russia were subjected to divestiture plans and fund released from such were used to restructure the policies and operations of the business organization. These units along with other units operating in the American regions were closed down which were not considered befitting with the future plans envisaged for the organization. Change in the management structure was also envisaged keeping in tune to the policy directions of the company. Such changes in the management structure helped in creating a more professional board of directors through emphasizing on the parameters of corporate governance and business transparency. During 2005 the ownership of the company again changed from the hands of O’Leary to Timothy C. Tyson who is found to bring about large amount of cultural changes in Valeant Pharmaceuticals. This change was brought about through Tyson’s increased ties with GlaxoSmith Kline. Change in corporate culture helped in enhancing the operational parameters of the company as the people became more effective in taking potential decisions. Again during 2008 the change in company ownership shifted to the hands of J. Michael Pearson who through his vast experience and professional effectiveness helped the company reach new heights. Mr. Pearson being an alumnus of McKinsey and heading the global pharmaceutical unit of the firm gained the required experience which helped him in restructuring Valeant. As the firm’s current chief operating officer, Mr. Pearson worked to help the restructuring of the company through bringing about new strategies in relation to modification of the product and distribution base. Modification of the product base helped in enhancing the effectiveness of the same for meeting the enhanced health needs of the consumers and patients. This modification brought in the product base of the company thus helped in gaining larger market bases around the globe and thereby helped Valeant Pharmaceuticals gain a huge growth in the revenue structures. A gain in the revenue structures helped the company in meeting the needs of the different stakeholders like the shareholder communities. Stock prices of the company which dwindled in the earlier periods now took a rising growth helping in drawing extended finances from the shareholders. In return the shareholders were met by increased dividends rendered from the revenue generated by the company on account of its sales functions. Thus the change in management leadership at Valeant Pharmaceuticals is found to have helped the company in enhancing its competitive position in the pharmaceutical industry of the region. Moreover the people belonging to the Board of Directors and also pertaining to the management team of the company being highly experienced persons and worked in key positions in companies like GlaxoSmithKline further helped the company in gaining needed productivity (Arnold et al. 246).

External Conditions

General Environment

In terms of the general business environment the business entities in North America are ruled under the rules of North Atlantic Free Trade Agreement which reflects that they are maintained under the same economic and legislative climate. Again in the legislations pertaining to labor being quite flexible in the North American region helps the people to shift from one business unit to the other. Another general feature of the business units operating in North America is that the branches of the company and the service units are created in locations which are quite far from the headquarters of the company. The locations are chosen based on the resource parameters of the area which would help in the productive operation of the unit (Bangemann 33). Furthermore the enhanced use of technology is continually helping in the ease of documentation and thereby the steady release of potential medicines in the market in a much faster manner. Demographically speaking the people aged above 65 years are found to become highly dependent on the intake of potential drugs for which pressure is being continually put to reduce the cost of such through improved strategies. Similarly the legislative climate is continually working to create a safer environment for the consumers in taking potential drugs for their wellbeing.

Industry Environment

The industry environment of pharmaceutical companies in North America is mainly composed of big companies who possess significant advantages in gaining the right market for their products. These companies operating based on the economies of scale earn large amount of revenues which is highly invested in research and development activities. Similarly the big companies also work on the acquisition and merger strategy thus taking control of small firms in the industry. This further helps the big firms to enhance the market potential. Major companies operating in the market like Pfizer and Johnson and Johnson are sustaining their leadership position through large scale acquisition activities in the American market. Moreover the big companies also take resort to partnership and joint venture activities other than mergers and acquisitions to maintain their hold. The value creation in regards to the product and sales are generated through the development of networks and diversification activities (Bamford and West 4). Such diversification involves the production of other non-core products like cosmetics and other nutrition related commodities. The companies belonging to the pharmaceutical industry however are working on to enhance its research and development activities both in relation to production and sales and distribution. Research and Development are rendered high priority for it would help in rendering cost effective drugs to the consumers and thereby would help sustain their market share (Davidson and Greblov 4-7).

Competitor Environment

The competitor environment for Valeant Pharmaceuticals is composed of mainly four companies like Teva Pharmaceutical, GlaxoSmithKline, UCB, Novartis and Boehringer Ingelheim. In regards to Teva Pharmaceuticals it is found that sales activities in North America tend to contribute to around 60 percent of its total revenues in sales of pharmaceutical products in America. The company working on its value chain network aims to gain the advantage of existing resources to produce cost effective drugs and other non-core products for the consumers. Novartis as a competitor reflects a strong potential of generic drugs for which the company has earned patents. This company also works on its research and development activities to generate an enhanced market in North America. UCB mainly caters to the production of medicines for neurological problems which aim to carve a niche market for its medicinal products. Around 46 percent of its revenues in the American market are obtained from sales of neurological medicines. Companies like GlaxoSmithKline and Boehringer Ingelheim work to create a strategic base of diversified products and also works to develop its product potential in producing neurological drugs. However the latter further works to gain a more strategic ground in the American market through working on acquisition strategies. Thus it is found that the above companies are creating a huge competition for the operation of Valeant Pharmaceutical in United States.

Internal Strengths and Weaknesses


Speaking on the parameter of internal strengths Valeant Pharmaceuticals works to render diversified products in regards to its neurological health division through continuous research and development activities. In addition to its research and development potential the company also works on its acquisition policy to expand its market base. Furthermore the company through its continuous efforts is working in the designing of programs to help needy patients through rebates and loyalty schemes. Such policies help the company in carving out an enhanced relationship with its consumers. Speaking on the financial side the company reflects growth in both the Current and Quick Ratio. This reflects that the firm has a strong asset potential which helps it to meet the liabilities.  Moreover the inventory turnover cycle ratio being 1.8 shows that company has the potential in selling the existing stock base in a rapid fashion thereby helping the firm gain revenue through which it can hire in newer stock batches (Arnold et al. 248-255).


In regards to weakness firstly it is found that the debt to equity ratio for the company being greater than 1 and ranging to around 2 reflects that the company runs mainly on amount earned from debt properties. This fact hints that the company needs to reduce such ratio or otherwise can result in insolvency. Moreover other than focusing on the generation of core products the company also needs to work on diversification activities to help generate other non-core products. Generation of non-core products would enable the company in focusing on other sectors other than neurology and in that the company can gain a much wider market base. Further the company should focus on enhancing the resource belt which in combination to the organizational policies would help in gaining the right market for the products (Arnold et al. 255-257).


Product Strategy

Valeant Pharmaceuticals is strongly working on its product strategies to counter serious nervous ailments like migraine, epilepsy, Parkinson’s disease and similar other serious diseases. The company is found to grow stronger through its acquisition activities in the production of medicines like Zelapar to fight Parkinson’s disease. However the above product due to lack of public awareness failed to generate significant revenues during 2007. In the treatment of Epilepsy the company however gains hold in producing a drug named Regitabine through continuous research and development activities. This medicine produced by the company is held to help the company gain a stronger foothold of the American market in the coming years. In the treatment of migraines the company was able to produce Migranal which helped the company in generating adequate revenues during the 2007 period. This product was prepared by the company through the taking over of Xcel and is sold as a special drug by Valeant. Valeant Pharmaceuticals thus to counter an effective product strategy needs to create value additions in the product portfolio through considerable research activities. Working on gaining the right resources and research paradigms for producing effective drugs would help the company gain a larger share in the American market (Arnold et al. 246-247).

Marketing Strategy

The marketing strategy of the company works on certain relevant parameters which are considered useful for marketing its neurological products in the American market. It is found that the company tends to educate its sales force through the creation of special marketing brochures for the products. Further samples are rendered to the physicians who take them on a free basis for trials on the patients. If the medicine suits the physician then endeavors to purchase the product prescription from the company. Again Valeant Pharmaceuticals also work in organizing workshops and seminars for the creating effective awareness of the different products to the masses. The development of the web sphere has also helped the company in enhancing the promotion of the products. Designing of web pages and also investing in large scale advertisements to be published in the medical journals has helped the company in gaining adequate market for its products. The company also works in rendering large scale investments especially in social life activities like creation of educational campaigns for the different neurological ailments and medicines related to it. Investments are also rendered for the designing of discussion forums in the stated area. Other social activities conducted include rendering donations to different foundations specializing on neurological ailments. These activities of the company help in creating adequate promotion for the company and as well of the different production and strategic activities conducted by the company (Arnold et al. 253-254).

Acquisition Strategy

The acquisition strategy taken by the company both in terms of gaining hold of new products and companies helped Valeant Pharmaceuticals in gaining an extensive market in America. The acquisition activities of the company gained momentum after the 2003 period when around 2004 the company acquired the Amarin Pharmaceuticals Incorporation. This strategy helped the concern also acquire the right to sale the drug named Zelapar. Selling of Zelapar helped Valeant Pharmaceuticals enhance the neurological product category and thus the company gained additional revenues. Similarly during the period of 2005 the company rightly acquired the pharmaceutical firm Xcel which also helped the company gain the right to sell products like Migranal and Distat to counter ailments like migraine and epilepsy. Such acquisition strategies thereby helped the company in gaining an extensive market in the neurological category in the American region. Thus the company through such activities happened to gain an enhanced market share and increase in the revenues emanating from the sales of such drugs (Arnold et al. 250).


Valeant Pharmaceuticals based in North America continues its fight to gain an enhanced market in the region based on the sales of neurological products. The ownership of the company has rightly changed many hands and thereby has been imbued with different cultures and ideological scales helping in the growth of such in the North American market. Polices of the company has been modified to gain advantage of potential activities like acquisitions whereby the company gradually endeavors in gaining over other small companies. This strategy along with the endeavor to create a signified intellectual and cultural base has helped the company in enhancing the research and development activities to gain hold of the drug market. Continuous research and development activities has helped the company in bringing about medicines which would help in countering serious neurological disorders like Parkinson’s disease, migraine, epilepsy and others. Further the above strategies have helped the company in gaining an enhanced market share and in countering growth in the revenue column. These strategies have thereby helped in enhancing the position of the company in the stock markets of the region. Bettering up the position in the stock market has helped the company in meeting the enhanced needs of the shareholder communities. Further with growth in the financial sector the company is working to develop on its intellectual and marketing pursuits. The company to enhance its marketing base is working on the development of relationships with the social and community sphere through extensive social works. Working on the formulation of workshops and seminars is helping the employees gain an increased understanding of the external market demands and thereby helping the company to formulate its product decisions accordingly.

  • Arnold, Jason. “Valeant Pharmaceuticals International: North America”. 2008.
  • Bamford, Charles E., and West G. Page. Strategic Management. United States of America: Cengage Learning, 2010.
  • Bangemann, Tom Olavi. Shared services in finance and accounting. United States of America: Gower Publishing, Ltd., 2005.
  • Davidson Larry and Greblov Gennadiy. “The Pharmaceutical industry in the Global Economy”. 2005. November 16, 2011


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