Aspen Pharmacare: International Strategy for an African Champion

This case is about the evolution of the business model of Aspen, a pharmaceutical company from South Africa. Aspen has successfully grown from a company that largely sold over-the-counter medication (OTC) and generics into a multinational that manufactures in nine countries, has a sales presence in more than 110 countries, and has an annual turnover of about US$2.2 billion. Aspen Group manages a portfolio of products through an integrated manufacturing and supply chain capability that is supported by Aspen sales teams across all the geographies where it operates. Aspen’s operations can be divided into two business segments, each with different challenges and opportunities. Marketing and Sales of specialty and branded pharmaceuticals to pharmacies, hospitals, doctors, and wholesalers across the world; and Manufacturing, i.e., production of pharmaceutical products at Aspen’s manufacturing sites for themselves and for third third-party customers – commonly referred to as contract manufacturing. Manufacturing comprised finished dose form, active pharmaceutical ingredients, and heparin divisions. Aspen’s strategy has treated these segments as integrated, but its growth has largely been in non-prescription OTC products and in licensed proprietary drugs, sold in South Africa and other emerging markets. Expanding the business internationally creates tension for the overall business model. This case is useful to illustrate a successful business strategy for an emerging market company, but at the same time, it shows the challenges faced by emerging market companies that want to extend their business model internationally.