The Effect of David's Strategies Implementation on Pharmaceutical Company Before and During COVID-19 (A Case Study: PT. Kalbe Farma Tbk)

Abstract

The COVID-19 pandemic hit Indonesia in 2020, and some pharmaceutical companies were impacted like PT. Kalbe Farma Tbk. Amidst an unpredictable occurrence like a pandemic, companies must reassess their current strategies to confirm that their business and operational performance are still operating as intended. This paper will conduct an exploration of how David’s 11 types of alternative strategies were implemented using a case study approach. Before pandemic, in 2019, company used Intensive – Product Development and Market Penetration Strategy to seeking increased sales by developing new products and to improve health services. During pandemic, in 2020 – 2022, company used Intensive – Product Development in support to the Government’s efforts to minimize the negative impact of the COVID-19 virus and to enhance distribution line and Defensive - Divestiture Strategy for divestation and the need of further digital innovation. From the strategy that has been implemented during the pandemic, the value of net income and EPS has always increased, but the RoE value has experienced ups and downs, as for the value of RoA, it has experienced a relatively small increase. Based on financial performance, it can be concluded that the company was able to seize the pandemic momentum and play a role in supporting the Government's efforts in tackling COVID-19. Background: Based on the previous description, to analyze the strategic initiatives implemented by Kalbe Farma before and during COVID-19, this paper will conduct an exploration of how David’s 11 types of strategies were implemented by pharmaceutical companies before and during the COVID-19 pandemic. In this paper Kalbe Farma is chosen as an example to conduct the research using a case study approach. Methods: To identify the strategies used by pharmaceutical companies, this paper used the products, recent activities, annual reports, and marketing strategies of Kalbe Farma. The impact of the strategy's implementation is identified from the company’s financial performance during the pandemic (2020– 2022) and financial performance data from 2016 to 2019 is collected to compare the performance. Results: From the strategy that has been implemented during the pandemic, namely from 2020 to 2022, the value of net income and EPS has always increased, but the RoE value has experienced ups and downs, as for the value of RoA, it has experienced a relatively small increase. Based on financial performance, it can be concluded that the company was able to survive and adapt during the pandemic and play a role in supporting the Government's efforts in tackling COVID-19. Conclusions: Whether it’s a Defensive Strategy which aims to save business lines or Intensive Strategy which aims to increase market share or even any business strategy that the company finds necessary to implement to secure their business.