Harvard Case - Social Business at Novartis: Arogya Parivar
"Social Business at Novartis: Arogya Parivar" Harvard business case study is written by Michael E. Porter, Mark R. Kramer, David Lane. It deals with the challenges in the field of Strategy. The case study is 19 page(s) long and it was first published on : Dec 3, 2014
At Fern Fort University, we recommend that Novartis continue to invest in and expand the Arogya Parivar program, leveraging its success as a springboard for further social impact initiatives. This expansion should focus on replicating the model in other emerging markets, integrating technology and analytics for greater efficiency and impact, and building a robust framework for measuring and reporting on social impact.
2. Background
This case study focuses on Novartis's Arogya Parivar program, a social business initiative launched in India in 2008. The program aims to improve maternal and child health in rural areas by providing affordable healthcare services, promoting healthy practices, and empowering communities. The program has demonstrated significant success in improving health outcomes and has been recognized for its innovative approach.
The main protagonists of the case study are:
- Novartis: A global pharmaceutical company seeking to expand its social impact and build a sustainable business model.
- Arogya Parivar: The social business initiative aimed at improving maternal and child health in India.
- Local communities: The beneficiaries of the program, who rely on Arogya Parivar for essential healthcare services.
3. Analysis of the Case Study
Applying a SWOT Analysis:
Strengths:
- Strong social impact: Arogya Parivar has demonstrably improved maternal and child health outcomes in India.
- Innovative business model: The program's unique model combines healthcare delivery, community engagement, and social entrepreneurship.
- Brand reputation: Novartis's strong brand reputation enhances the credibility and impact of the program.
- Scalability: The program's model can be replicated and adapted to other emerging markets.
Weaknesses:
- Limited reach: The program currently operates in a limited geographical area in India.
- Resource constraints: The program relies on limited funding and human resources.
- Lack of standardized measurement: The program's impact is measured through anecdotal evidence and needs more robust data collection.
Opportunities:
- Expanding to new markets: Replicating the model in other emerging markets with similar healthcare challenges.
- Leveraging technology: Integrating technology and analytics for improved efficiency and impact measurement.
- Building partnerships: Collaborating with NGOs, governments, and other stakeholders to increase reach and impact.
- Developing new products and services: Expanding the program's offerings to address other health needs.
Threats:
- Competition: Other organizations may launch similar initiatives in the same markets.
- Regulatory challenges: Navigating complex regulations in different countries.
- Financial sustainability: Ensuring long-term financial viability of the program.
Applying Porter's Five Forces:
- Threat of new entrants: Moderate, as replicating the program requires significant investment and expertise.
- Bargaining power of buyers: Low, as beneficiaries rely heavily on the program's services.
- Bargaining power of suppliers: Moderate, as the program depends on partnerships with healthcare providers and NGOs.
- Threat of substitutes: Moderate, as alternative healthcare providers may exist in some areas.
- Competitive rivalry: Moderate, as the program faces competition from other NGOs and healthcare providers.
Analyzing the Value Chain:
The Arogya Parivar program's value chain includes:
- Inbound logistics: Sourcing medical supplies and equipment.
- Operations: Providing healthcare services, conducting community outreach, and training healthcare workers.
- Outbound logistics: Delivering healthcare services to beneficiaries.
- Marketing and sales: Promoting the program and building relationships with stakeholders.
- Service: Providing ongoing support and follow-up to beneficiaries.
Identifying Key Core Competencies:
- Social entrepreneurship: Developing innovative and sustainable business models for social impact.
- Community engagement: Building trust and relationships with local communities.
- Healthcare delivery: Providing affordable and accessible healthcare services.
- Data analysis: Utilizing data to improve program effectiveness and measure impact.
4. Recommendations
- Expand the program to other emerging markets: Novartis should identify other emerging markets with similar healthcare challenges and replicate the Arogya Parivar model. This expansion should be carefully planned, taking into account local context, regulatory requirements, and cultural sensitivities.
- Integrate technology and analytics: The program should leverage technology and analytics to improve efficiency, data collection, and impact measurement. This could include using mobile applications for data collection, telemedicine for remote consultation, and AI-powered analytics for identifying trends and improving program effectiveness.
- Build a robust framework for measuring and reporting on social impact: Novartis should develop a comprehensive framework for measuring and reporting on the program's social impact. This framework should include clear metrics, standardized data collection methods, and transparent reporting mechanisms.
- Develop a sustainable funding model: Novartis should explore various funding models to ensure the long-term financial sustainability of the program. This could include seeking grants, partnerships with other organizations, and exploring social impact bonds.
- Foster a culture of innovation and collaboration: Novartis should create a culture that encourages innovation and collaboration within the program. This could involve establishing a dedicated innovation team, fostering cross-functional partnerships, and promoting knowledge sharing.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Expanding the program aligns with Novartis's mission to improve healthcare access and its core competency in social entrepreneurship.
- External customers and internal clients: The recommendations address the needs of beneficiaries, healthcare providers, and internal stakeholders within Novartis.
- Competitors: The recommendations aim to differentiate the program from competitors by leveraging technology, data analytics, and a robust impact measurement framework.
- Attractiveness: Expanding the program to new markets and leveraging technology offers significant potential for growth and impact.
6. Conclusion
Novartis's Arogya Parivar program is a successful example of social business innovation with the potential to significantly improve maternal and child health in emerging markets. By expanding the program, integrating technology, and developing a robust impact measurement framework, Novartis can further enhance its social impact and build a sustainable business model that benefits both the company and the communities it serves.
7. Discussion
Alternative Options:
- Focusing solely on India: Novartis could choose to focus solely on expanding the program within India. However, this would limit the program's potential impact and miss opportunities to leverage its success in other markets.
- Outsourcing the program: Novartis could outsource the program to a third-party organization. However, this would diminish Novartis's control over the program and potentially weaken its brand association with the initiative.
Risks and Key Assumptions:
- Cultural and regulatory challenges: Replicating the program in other markets may face cultural and regulatory challenges.
- Financial sustainability: Ensuring long-term financial sustainability of the program requires careful planning and resource allocation.
- Data privacy and security: Integrating technology and analytics raises concerns about data privacy and security.
8. Next Steps
- Conduct a feasibility study: Novartis should conduct a feasibility study to identify suitable markets for program expansion and assess the potential impact and challenges.
- Develop a strategic plan: Novartis should develop a strategic plan outlining the program's expansion strategy, technology roadmap, and impact measurement framework.
- Build partnerships: Novartis should build partnerships with local NGOs, governments, and healthcare providers to facilitate program expansion and enhance impact.
- Pilot the program in new markets: Novartis should pilot the program in new markets to test its effectiveness and identify any necessary adaptations.
- Monitor and evaluate impact: Novartis should continuously monitor and evaluate the program's impact using a robust data collection and reporting system.
By taking these steps, Novartis can ensure the continued success of the Arogya Parivar program and leverage its social impact to build a stronger and more sustainable business.
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Case Description
Late in 2013, Novartis CEO Joseph Jimenez was considering how and whether to deepen the company's investment in Arogya Parivar, its profitable program that sold Novartis medicines in rural India, while expanding access to medicine and health information to millions of Indian villagers.
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