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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

Developing a portfolio strategy

Approaches to portfolio strategy have become more holistic across the healthcare industry, but what are the benefits for business?

Newton's cradle

We found an old children’s magnet game in a cupboard recently – the type that has all the little magnetic shapes to build different structures and connected chains. We reminisced about how we used to use the magnetic balls to repel other magnetic shapes away, and the satisfaction gained when two repelling magnets were forced together.

Developing a portfolio strategy can sometimes feel like this; like you have just been handed a bag of repelling magnets and asked to fit them all together. Despite this level of challenge, over the course of the last few years we have seen an incremental shift from a brand strategy approach, to a more holistic portfolio strategy approach across many pharma and biotech companies. This shift has fundamentally impacted notjust the way business units in pharma are now strategising, planning, executing and training, but also the structure of teams and organisations, and their budgeting and resourcing.

So, what is the intrinsic value that big pharma companies have found in rethinking the way their business is structured to reflect this new approach? There are a number of clear advantages to thinking ‘portfolio first’.

The first benefit that always springs to mind is that this must help drive a financial advantage and, yes, a portfolio focus can often unlock financial opportunity to create synergies across brands; not just with people and teams but also through investment and resource allocations with a subsequent impact on ROI. Basically, where the synergy is possible due to common ground, the business will leverage the same resources across different brands, embracing a more efficient approach.

A second, but no less important benefit is the focus portfolio strategies can achieve. Creating and managing a P&L for a portfolio certainly helps the process of prioritisation, which can be very challenging when considering individual brand strategies. With a brand strategy approach, each brand team will always emphasise how critical some activities are versus other brands. We have heard that this has even led to bitter arguments about budget within different brand and functional teams, but if there is ever any competition to be had, it should always be external and not from the person at the next desk!

But not all the benefits of a portfolio approach are internal – there are some very strong external and customer-focused benefits.

By putting ourselves in the customer’s shoes, we can realise how much further ahead healthcare professionals are in the way they see the portfolio versus brands. Healthcare systems need to look across populations, with many patients experiencing multiple (and often unconnected) health issues and conditions at the same time. We should be working collaboratively at a portfolio or disease level so that we are being exposed to the ‘real-world’ challenges of health population management and the value our solutions can offer rather than remaining focused on programmes connected to just one brand. That isn’t to say that there isn’t still a role for understanding more about specific brands and who would benefit from each, but we also need to elevate our gaze to a longer-term, portfolio or disease-focused set of solutions.
There are a number of companies making some very smart decisions about portfolio and disease offerings and engagement and are reaping the benefits of enhanced relationships and reputation, as well as experiencing commercial gains from this strengthened customer engagement.

We should be honest here and make it clear that there can be a lot of pain before a company or team is able to appreciate the gain of a portfolio strategy. The component brands within a company portfolio may have been developed in near isolation from the rest of the assets and brands produced by the company. This is when it can sometimes feel like trying to push two repelling magnets together. The scientific narrative of the component brands can feel awkward and disconnected, the budgets may be maintained separately, resources can be duplicated and require untangling, team objectives and incentives can be counter-intuitive to a portfolio or disease approach and so the list goes on. It can often require a full company transition, as a local country team attempting this transition alone may find itself disconnected from its affiliate structure and policies, let alone distanced from regional and global teams.

If you are not scared off after the list above, our recommendation on how and where to start is always to look at the vision of what this could be and build that collaboratively with the impacted team. If we were to be successful in developing and implementing a portfolio strategy, what would that mean to our team, our company, customers and healthcare systems, patients and carers and, ultimately, society? How would this feel? What would we be able to observe? Once this longer-term view is mapped out, the team can explore what will stop or slow this progress, what will need to change, what will enable change, and so on, as the
plan for how to transition becomes clearer.

Brand strategy will always be needed. Even within a wider portfolio or disease strategy, it is always important to know the component parts and what is needed to maximise all parts that make up the whole. However, sometimes by working to connect the brand ‘magnets’ together we can build extraordinary structures that help us realise the internal and external benefits to be gained.

Maxine Smith is Managing Director and Laura Fontana Sabatini is a Senior Consultant, both at Uptake Strategies

Maxine Smith is Managing Director and Laura Fontana Sabatini is a Senior Consultant, both at Uptake Strategies

29th November 2022

From: Marketing

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