Case 6: Small Drug Manufacturer -medium- Bain&Company, Round 2
(Source: Case Interview from Bain, Round 2)
Context:
The client is a small drug manufacturer, DevCo, based in the United States. DevCo currently has one
drug on the market sold mainly in the United States, but has also sold to a lesser degree in the U.K.
and Germany.
DevCo is looking to increase its presence in Europe and is considering expanding into Poland, Spain,
and France, specifically.
DevCo is interested in knowing which country it should expand into and what the criteria should be
for choosing a country.
I would need some more information before going further. First I would like to know what the drug our
client sells is and what it is used for. Second, I would like to know why its presence in UK and Germany is
low and why the company is considering Poland, Spain and France and no other country.
A good structure will include the following elements:
To assess which country they should expand into I would like to investigate:
- The market for the product our company is selling in each of the countries (market size,
profitability, growth).
- competition and understand how fragmented the market is, what is the share for our customer
and for competition, what is the likely reaction of competition to our launch
- Potential regulation regarding the introduction of a new drug
The final answer will be given by the answer to the question regarding which of the countries is going to
bring more profits to the client.
Information provided upon request:
The drug is an anti-clotting drug used during angioplasties, a type of heart surgery.
In Europe, when a patient has heart problems, they have one of three options:
(1) open-heart surgery (a very invasive surgery)
(2) angioplasty (a less invasive surgery)
(3) over-the-counter or prescription medicine
DevCo has a lesser presence in the U.K. and Germany because they only recently entered those
markets
DevCo is considering entering Poland, Spain, and France because those countries have the next 3
largest populations in Europe behind the U.K. and Germany
DevCo only wants to enter 1 country and intends to stay in that country for at least 5 years.
Buying decisions are made by the physician and the insurance companies and patient have little input.
(when the interviewer asks for the number of angioplasties, before showing the slide, ask to
brainstorm: )
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Case 6:Small Drug Manufacturer -medium- Bain&Company, Round 2
Question: How can we determine number of angioplasties per country?
Possible answers:
• Government registries
• World Health Organization
• Call Hospitals
• Use comparable countries to estimate proportion of surgeries to population of country
(when the interviewer asks for the market shares, after showing the slide, ask to brainstorm: )
Question: What can be causing the varying market share for PharmaCo and Kitzer?
Possible answers:
• First Mover’s advantage
• Varying advertising spending
• Local connections
• Varying perception of doctors of which surgery is high and low risk
General Information on DevCo and Each of its competitors to be given upon request:
PharmaCo:
• Drug used in high risk surgeries (~40% of surgeries)
• Price $400 / drug
Kiltzer Inc.:
• Drug used in low risk surgeries (~40% of surgeries)
• Price $400 / drug
Mork&Co:
• Drug used in very high risk surgeries (~10% of surgeries)
• Price $2,000 / drug
DevCo
• Drug used for high and low risk surgeries
• Claims less blood clothing
• Price $400 / drug
Other information given upon request:
Time to market differs by country:
Poland: 0-2 years
Spain: 0 years
France: 6 months
Distribution available, but costs are controlled by country:
Poland: 5% of revenue
Spain: 0% of revenue
France: 10% of revenue
Government restrictions: none in any of the countries
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Case 6:Small Drug Manufacturer -medium- Bain&Company, Round 2
Solution Guide (the table will help take a decision):
France Spain Poland
Market size 70M 40M 20M
Market growth -5% 0% +10% per year
Competitive 2 main competitors One dominant One dominant
environment having equal shares competitor competitor
Distribution 10% of revenue No cost 5% of revenue
Time to market 6 months Immediately 0-2 years
(A good interviewer will come up with a recommendation)
I recommend they enter France. With 70K angioplasties per year, even with the decrease every year, it
will still be the best option for the next 5 years. No other competitor has leverage in the French market.
Entering the market will take 6 months, so they can begin selling it very fast. In this time they should
start to develop relationships with physicians and secure distribution channels.
(Either France or Spain is a good answer as long as the candidate supports it)
Charts to be given upon request:
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Case 6:Small Drug Manufacturer -medium- Bain&Company, Round 2
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Case 6:Small Drug Manufacturer -medium- Bain&Company, Round 2
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