NOVON : nasionale verspreider van Novartis-CP in Suidelike Afrika : distribusie as strategiese voordeel

Viljoen, Philippus (2001-03)

Thesis (MBA)--Stellenbosch University, 2001.

Thesis

ENGLISH ABSTRACT: Novartis is a life sciences company with its headquarters in Basie, Switserland. Novartis divides its business into three core activities, namely Healthcare, Consumer Health and Agribusiness (Novartis AG). Novartis AG is further divided into crop protection, seeds and animal health. In order to improve business systems, Novartis AG divides its business into five geographical areas, namely NAFTA, Western Europe, Central- and South America, Asia/Pacific countries and Business International. Novartis Crop Protection South Africa (Novartis CP SA) reports to Business International. The financial position of producers in various sectors of the agricultural industry has weakened over the past years. Various reasons are given for this, such as a decrease in nett farm income, adverse weather conditions, a government which is unsympathetic towards the commercial producer, macro-economic factors (weakening of the local currency against the US Dollar and British Pound and high interest rates), as well as poor financial and general management by producers. Due to this poor performance, the agricultural industry as a whole hardly showed growth in real terms over the past five years. Input suppliers, such as the aqrochernical industry suffered the same fate. The agrochemical industry has changed tremendously over the same period. Suppliers of generic products are increasing annually. The agrochemical industry is regulated by Act 36 of 1947. This Act makes it relatively easy, fast and cheap for generic producers (and suppliers) to register their products in South Africa. This huge increase in cheaper generic products led to poor performances by the producers (and suppliers) of research-based products, both in volume and price. Currently, there is an imbalance between the number of suppliers and the number of distributors in the South African Agrochemical Industry. Consequently, the suppliers of these generic products always find a keen distributor in South Africa. Presently, Novartis CP SA has the largest market share in the agrochemical industry in South Africa. Over the years, Novartis CP SA developed a very strong distribution network. This network was partly the reason for Novartis' success in the field. This distribution network, in broad terms, was managed as a franchise. In other words, Novartis CP SA gave an independant company the right to sell its product range in an allocated geographical area. Today, all the suppliers of researched-based products are using dealerships to distribute their products. Although this system worked very well, it was important for Novartis CP SA to adapt this system if the situation in the agrochemical and agricultural industries would change. Due to the changes that took place in both industries, it was of utmost importance for Novartis CP SA to gain more control over the management of the distribution network. As a supplier, it was also important that Novartis CP SA tried to stabilise the fragmented distribution industry by grouping some of the individual dealerships together. As the leader in this transformation process, Novartis CP SA was in a position to choose its partners. With the establishment of Novon Crop Protection Chemicals (Novon), a company was formed in which Novartis AG and the various dealerships, as a group, has a shareholding of 45% each. In exchange for the shares in Novon, each dealership offered a 26% (veto right) shareholding in their companies to Novon. Via Novon, Novartis CP SA created a distribution company which will be able to defend its marketshare in the future.

AFRIKAANSE OPSOMMING: Novartis is 'n Switserse maatskappy wat spesialiseer in die lewenswetenskappe met sy hoofkantoor in Basel, Switserland. Novartis se besigheid word in drie kernaktiwiteite verdeel naamlik; gesondheidsorg, verbruikersgesondheid en landboubesigheid (Novartis AG). Landboubesigheid behels weer gewasbeskerming, saad en dieregesondheid. Novartis AG verdeel sy besigheid in vyf geografiese streke: NAFTA, Wes-Europa, Sentraalen Suid-Amerika, Asië/Pasifiese lande en Besigheid Internasionaal. Novartis Gewasbeskerming Suid-Afrika (Novartis CP SA) rapporteer aan Besigheid Internasionaal. Die finansiële posisie van produsente in verskeie vertakkings van die landboubedryf het oor die laaste aantal jare aansienlik verswak. Daar is verskeie redes vir hierdie tendens, waaronder 'n afname in netto boerdery inkomste, swak weersomstandighede, 'n regering wat nie simpatie toon met die kommersiële produsent nie, makro-ekonomiese faktore ('n verswakking van die plaaslike geldeenheid en hoë rentekoerse), asook swak finansiele en algemene bestuur deur produsente, die belangrikstes is. Vanweë hierdie swak prestasies, het die landboubedryf in sy geheel nie werklik enige groei getoon nie. Insetverskaffers soos die landbouchemiese bedryf het dienooreenkomstig ook nie oor die afgelope aantal jare werklik reële groei getoon nie. Voorts het die liandbouchemiese bedryf in Suid Afrika ook oor die afgelope aantal jare verander. Verskaffers van veral generiese produkte het toegeneem. Die landbouchemiese bedryf word deur Wet 36 van 1947 gereguleer. Hierdie wet maak dit vir die vervaardigers van generiese produkte baie maklik en goedkoop om produkte te registreer. Die toename in goedkoper, generiese produkte het die verskaffers van navorsingsgebaseerde produkte se verkope (prys en volume) onder kwaai druk geplaas. As gevolg van 'n wanbalans tussen die aantal verskaffers en verspreiders in Suid-Afrika, het hierdie generiese vervaardigers maklik gewillige verspreiders van hul produkte gekry. Novartis CP SA het tans die grootste markaandeel in die landbouchemiese bedryf in Suid- Afrika. Hierdie posisie as markleier, is gevestig met die hulp van sy verspreidingsnetwerk. In breë trekke het Novartis CP SA sy handelaarsnetwerk op die beginsels van 'n bedryfsreg (franchise) bestuur. Dit bring mee dat Novartis CP SA aan onafhanklke maatskappye die reg gee om sy produkreeks in 'n spesifieke geografiese area te versprei. Die meeste verskaffers van landbouchemiese produkte in Suid-Afrika maak tans van handelaars gebruik om hul produkte te versprei. Alhoewel hierdie stelsel effektief was, was dit vir Novartis CP SA belangrik om dit aan te pas by veranderende omstandighede binne die landboubedryf. Dit was vir Novartis CP SA belangrik om deel te wees van die besluitneming en bestuur van die verspreidingsnetwerk, asook om die reeds gefragmenteerde verspreidingsbedryf te stabiliseer. Deur hierin die voorloper te wees, was Novartis CP SA in staat om te kies met watter van die plaaslike verspreidingsmaatskappye hy in vennootskap wou gaan. Met die stigting van Novon Gewasbeskerming Chemikalieë (Novon), het daar 'n maatskappy ontstaan waarin Novartis AG 45% aandeel het, terwyl die onderskeie handelaars ook 'n aandeel in die maatskappy het ( 45% in totaal vir al die handelaars). As teenprestasie, het Novon 26% aandeel (dus 'n vetoreg) in elkeen van die handelaars bekom.

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