Why Small Businesses are Hiring Franchise Pharma Companies
Some time back franchises were seen as a largely big corporation tool. Only big companies were seen as entities that could afford to have franchises or even the possibilities of attracting good franchise partners. Franchises in this partnership were often seen as second fiddle, surviving because of the bigger company’s name and patronage.
Luckily, the financial scene in India and the market has become remarkably different now. The character of franchise of pharma companies is also changing. Instead of acting as the Indian proxy for large multi-national concerns, these franchises today are becoming partners for small and medium industries.
Changing scenario of the Indian pharma sector
The reason behind this change is the changing nature of the sector itself. Today India is emerging as a major player in the international market with leading the global trade in volume. This growth story is closely linked with the growth of the pharma SME sector. The small industries have been driving the trade in generic drugs, a major share in the Indian export volume.
The story began when the Indian markets opened up. What was seen as a possible threat of domination by international players instead became one of the best tools for Indian businesses. It brought in finances as well as research and technology to Indian firms. The pharma companies were among the first to cash in on this benefit. They now had the know-how and the money to compete at the international market.
The need for franchises for smaller pharma companies
Expanding business: Today the smaller businesses are faced with the unique need to look for more partners to foster their growth. This includes partners in production, marketing and distribution. As their business expands, their requirements are also going up and franchises are the best way to acquire a read-made partnership.
Overstretched resources: A small pharma company simply does not have the resources to go all by itself. For a global or even a nation-wide business one needs a massive distribution network, competent production division backed by a solid R&D. Then there is the marketing. This is simply too much output for a small or medium company and it is this very factor that has traditionally hobbled their growth.
Franchises of pharma companies is their solution to this problem. They can get access to the resources of the partnering pharma company with one simple partnership. Not only can they save their own resources, they also get to benefit from the franchise!
Expertise: Sometime we need franchises because we simply do not have a multi-function expertise. For instance, your company may have the expertise in production, but you lack the edge in marketing. By hiring a firm specialising in marketing, you get the firm’s expertise in one neat package.
Regional partners: One of the biggest problems faced by expanding businesses is the marketing edge required in the new market. While one may have domination in one market, a different region, whether domestic or foreign, will have different rules. This is especially true for phrama companies which not only have to deal with unique market conditions, but also the rules and regulations in a given market. You have to understand the market, the buyers, the prevailing trends and the doctors practising in the area.
Low risks: Creating a franchise poses one of the lowest risks in the expansion. We can go into a new market with a new partner who has not only invested funds, but is also keen on ensuring the success. This means that our own investments are kept to the minimum while our partner works for the best possible returns on investment.
Time saving: With wider business opportunities smaller companies today have the chance to grow quickly. But they seldom have the funds or resources to do this quickly. For self-expansion they will need to train new people, look for a place to hire and so on. Instead, they have access to a readymade set-up. Even with some rudimentary training, this will take much less time.
Franchises are no longer just the domain of large corporations. Franchise of pharma companies now also come under the SME sector. This has been a win-win partnership for both.