Lilly New Zealand Case Study: Adapting to Market Dynamics and Threats

This case study delves into the challenges faced by Lilly New Zealand due to increased market competition and public funding constraints. The company is grappling with declining sales due to new entrants offering pharmaceuticals at reduced rates and the potential loss of a significant patient. The CEO is seeking viable strategies to navigate these challenges. The analysis recommends that Lilly consider partnering with competitors to reduce competition and focus on expanding into new markets rather than solely focusing on price wars. Capitalizing on opportunities presented by changes in the New Zealand healthcare market, such as increased public funding, is also advised. The study suggests that by forging partnerships and expanding its market presence, Lilly can overcome competitive pressures and secure its future in the evolving healthcare landscape. Desklib provides students access to similar solved assignments and past papers.

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Article Summary
In this case study, Lilly New Zealand Company has been entangled in a wave of
confusion after new entrants and threats of competition have increased in the market. The
company’s main fear is that the new companies are competing by selling pharmaceuticals at a
reduced rate compared to Lilly Company. Another primary concern is the public funding of
drugs. According to the case study, it has become impossible for pharmaceutical companies to
increase prices of drugs as the government has set a cap on price limits. Lilly New Zealand is
also facing a potential threat of losing one of its patients that is likely to reduce the value of the
company by half. The CEO is concerned with the next move that the company is going to take.
Recommendations
a. Some of the recommendations for Lilly Company include:
b. Consider partnering with some of the competitors to reduce competition
c. Maintain the price competition even if the firm makes loses
d. Sitting back and waiting for the market to control the outcomes
e. Contacting the affiliated company for financial support and launching the new areas,
while at the same time introducing parallel products
What to do in the case of Lilly Company
The best alternative for the case of Lily would be alternative (ii) and (v) as listed in the
above list. The company should not give up on the competitors. According to Geneva (2018),
some competitors come with strengths that can be exploited to benefit the company. The
company should consider partnering with some of the competitors. Partnerships reduce
competition and increase the volume of sales. Partnerships improve competition by increasing

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the amount volume of production. Additionally, partnerships counter competitors by improving
on available funds and skills for production and marketing. The firm should ignore additional
costs and focus on expanding to new markets instead of focusing on its competitors. According
to the case study, New Zealand healthcare market has undergone significant changes in the
recent past. These changes should be opportunities to strengthen the company. The fact that the
public is funding the healthcare sector makes it nearly impossible for the firm to compete. Lilly
company should go ahead and capitalize on the available opportunities by increasing the funding
to outshine its rivals.

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References
Geneva, H. (2018). How to deal with competition in the industry. Liveplan. Retrieved from
https://www.liveplan.com/blog/how-to-deal-with-industry-competition/
Lilly New Zealand (n.d.). Internal Lilly confidential.