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SMS for Life Business Case

Valeria Abramenkova Oleg Dolzhenko Ekaterina Lee Ksenia Shapovalova 2013

The project SMS for Life was successfully implemented in Africa 1

Introduction of SMS for Life significantly increased the stock level of ATCs and Quinine in three regions of Tanzania…

3

During the pilot the stock levels of ATCs and Quinine rose by 64% and 35% correspondingly

+64% ACTs

4 411

The average response rate across all three pilot districts of Tanzania was 95%, never dropping below 93%.

In order to motivate health amenity workers the following measures were taken:

Health workers received free phone numbers

+35% Quinine

Health workers were sent an automatic reminder message

16.981 12.536

2 696

The system of credits motivated health workers to respond and do it on time First week Last week

2

First week Last week

4

…And decreased the percent of stock-outs The stock-outs of ATCs and Quinine dropped by 53% and 14% correspondingly

-14%

-53%

24

  

18

77

In the course of the pilot all the goals were reached: The access to anti-malarial drugs was improved Data-gathering can be made by simple and accessible tools

Public-private partnership model proved to be effective

“SMS for life” was also effective in other African regions, therefore it may be more successful if developed in following directions:

4 Prestige

First week Last week

New partners

First week Last week

Sources: case data, the analysis of the team

2

New markets

Profits

The improvement of the company’s reputation through enhancing public awareness of SMS for Life initiative will be beneficial in a number of ways

1

The main objective is to position Novartis as a socially responsible company by attracting public attention to SMS for Life initiative

3

It can be achieved via the advertisement…

The company’s corporate image highly benefits from charity activities According to Boston College Study:

16%

In health amenities including hospitals, drugstores by adding information to posters, brochures

2

66%...

84%...

On TV by adding On billboards by adding information to extra information to the commercials existing ads.

The main method is to place information about the work the company does, on its produce Seeing an emblem people will know they support the company which works for a good cause :

34%

…of Americans have a better impression of a company involved in charity work

4

… would switch brands or retailers to one associated with a good cause

By demonstrating its commitment to corporate social responsibility, Novartis would reach the following goals : Improve reputation and as a result: Increase demand Improve customer loyalty Attract new partners to the project Implement SMS for Life initiative in other regions In long-term run it will help to increase profits. However, this point will be analyzed later

Sources: case data, Boston College Study

3

In order to expand SMS for Life project, sustain and develop the main initiatives launched under it, Novartis must attract new partners, that will provide either technical or financial support

1

Mobile and IT companies are responsible for the technical side of the project

2

Authorities, charity funds and celebrities will help raise money for the project

Mobile Network Operators

Authorities

112%

Since the project was implemented in Tanzania, Vodafone’s branch Vodacom has more than doubled the total amount of its clients there.

mln of people

4,2

7,3

1,6

5,6

1,7

1,7

1,4

1,4

1,4

Evidently, the participation of authorities is crucial to the functioning of the project, therefore it is necessary to introduce the positive results of the pilot projects in order to ensure their support.

Charity funds

The obvious benefits of such cooperation will help Novartis attract more partners among mobile network operators.

2008

4,2

4,2

4,2

2009

2010

2011

IT support The IT partner of SMS for Life is IBM. It supports the overall management of the project and the provision of an on-line collaboration tool, "Lotus Live". The tool allows all the project partners to coordinate their inputs. Their contribution is not financial, rather than that it provides the project with resources. The main objective is to maintain the partnership.

Sources: case data, Boston College Study

8,9

While working with charity funds it is particularly important to demonstrate that aims of SMS for Life correspond with their aims. One of the potential sponsors is Bill & Melinda Gates Foundation, which has committed nearly $2billion in malaria grants

Celebrities Involving celebrities will not only provide the project with funds but also increase social awareness to the levels which cannot be achieved by other means Celebrities like Justin Timberlake Justin Timberlake Madonna and Madonna deliver millions of Pamela Anderson dollars of value each year Oprah Winfrey to charity causes Bono

4

9,3 5,5 4,8 Annual impact, 4,0 $ mln 3,6

Other developing regions and countries with poor road network development and health service, which face the problem could also greatly benefit from the project SMS for Life GDP per capita, $

Infant mortality rate, deaths per 1000 live births

39,5 46,5 40,9 54,1

12.400 1.700

Bolivia

Tanzania

Cambodia

5.000 2.400

26 mln

Potential partners among mobile network operators: Telefonica Group, America Movil

Degree of risk: high Food or waterborne diseases: bacterial diarrhea, hepatitis A, and typhoid fever Vectorborne diseases: dengue fever, malaria, and yellow fever Water contact disease: leptospirosis

Degree of risk: very high Food or waterborne diseases: bacterial and protozoal diarrhea, hepatitis A, and typhoid fever Vectorborne diseases: dengue fever, Japanese encephalitis, and malaria Note: highly pathogenic H5N1 poses a negligible risk among citizens who have close contact with birds Hospital bed density, per 1000 people

0,46 0,08

Sources: case data, CIA World Factbook

This information demonstrates the presence of the last mile problem in Bolivia and Cambodia as representatives of their Latin America and South East Asia.

Overall the situation in Latin America and South East Asia is similar to that in Africa

63 10

1,1 0,22

14 mln

Sanitation facility access, % of population

2,9 0,7

0,06

0,8

Potential partner among mobile network operators: Telenor

Degree of risk: very high Food or waterborne diseases: bacterial diarrhea, hepatitis A, and typhoid fever Vectorborne diseases: malaria and plague Water contact disease: schistosomiasis animal contact disease: rabies

8 mln

Road network development, km per sq km

World

27 31

5

The increase of public awareness of Novartis’s initiative and introduction of commercial products in addition to Coartem and Quinine into the project as well as expansion on emerging markets will help increase Novartis’s profits

1

The improved reputation of the company is likely to boost its sales

2

According to Strategic management journal, a $500,000 increase in charitable contributions results in an estimated $3 million increase in sales.

850

Donation

850

Return

1.360

$2.210 mln

Thus, it may be supposed that the Novartis’s profits will rise in the same proportion. Moreover, it will attract socially conscious shareholders.

3

Other products will be added to the database each getting its own code with a hash key.

Information about the level of stock in these drugs will be sent when necessary.

$850 mln

+160%

The infrastructure can also be used in order to supply regions with commercial products

  

Y8Q9V#3F#0

This will: Not affect the social value of the project Allow to increase Novartis’s profits Ensure customer loyalty in the future

The further development of SMS for Life is impossible without support of inner Novartis organizations, such as Novartis IT and the Novartis Foundation.

Y8: Coartem Yellow: 8 boxes Q9: Quinine injectables: 9 V#: Voltaren: 3 boxes F#: Fenistil, 0 boxes

The expansion on emerging markets will help to increase the profits of the company dramatically

Although the share of Latin American and South East markets is not big right now, it is expected to soar by 2021. The forecasted market increase in Latin America is 139% whereas in Asia it is 102%.

Therefore, stating a claim today Novartis will ensure large portion of this rapidly growing market in foreseeable future

Europe Asia

1600

Latin America Middle East Africa

34%

31%

North America

800

7%

25%

0 2008

Sources: case data, Boston College Study

2012

2021

6

Thoroughly worked out strategy will help to promote the social value of SMS for Life as well as increase Novartis’s profits gg

1

gg

Social and commercial importance Expansion

New partners

In order to achieve its goals the project will need to reach out to more people in need. Geographical expansion is inevitable.

It is also important to allow other pharmaceutical companies to participate in the project given that they provide necessary medication in the region.

See sl. 6

In foreseeable future it will raise both Novartis’s and its partners’ profits

2

Internal support To expand its influence in Africa and other emerging markets as well as provide service for new partners help of inner organizations is crucial.

2

3

External support To meet the growing number of initiatives launched under SMS for Life, which requires resources, most sponsors should be appealed for.

Leadership The leader must play the variety of roles:

   

Be an inspiration and motivator to those around you Be persistent and relentless Know that new experiences are new opportunities Believe in your cause, and make sure your team does too

Sources: the analysis of the team

Entrepreneur

Strategist

Diplomat

7

Starring: Kate Lee

Ksenia Shapovalova

MGIMO Sophomore of MEO-IT

MGIMO Sophomore of MEO-IT

Member of consulting department in MGIMO Business-club

Member of the marketing module in MGIMO club «Economicus»

Valeria Abramenkova

Oleg Dolzhenko

MGIMO Sophomore of MEO-IT

MGIMO Sophomore of MEO

Member of IB department in MGIMO Business-club

Leader of the marketing module in MGIMO club «Economicus»

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