Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: Novartis is a life sciences company with its headquarters in Basie, Switserland. Novartis
divides its business into three core activities, namely Healthcare, Consumer Health and
Agribusiness (Novartis AG). Novartis AG is further divided into crop protection, seeds and
animal health.
In order to improve business systems, Novartis AG divides its business into five geographical
areas, namely NAFTA, Western Europe, Central- and South America, Asia/Pacific countries
and Business International. Novartis Crop Protection South Africa (Novartis CP SA) reports
to Business International.
The financial position of producers in various sectors of the agricultural industry has weakened
over the past years. Various reasons are given for this, such as a decrease in nett farm
income, adverse weather conditions, a government which is unsympathetic towards the
commercial producer, macro-economic factors (weakening of the local currency against the
US Dollar and British Pound and high interest rates), as well as poor financial and general
management by producers.
Due to this poor performance, the agricultural industry as a whole hardly showed growth in
real terms over the past five years. Input suppliers, such as the aqrochernical industry suffered
the same fate.
The agrochemical industry has changed tremendously over the same period. Suppliers of
generic products are increasing annually. The agrochemical industry is regulated by Act 36 of
1947. This Act makes it relatively easy, fast and cheap for generic producers (and suppliers)
to register their products in South Africa. This huge increase in cheaper generic products led
to poor performances by the producers (and suppliers) of research-based products, both in
volume and price.
Currently, there is an imbalance between the number of suppliers and the number of distributors
in the South African Agrochemical Industry. Consequently, the suppliers of these generic
products always find a keen distributor in South Africa.
Presently, Novartis CP SA has the largest market share in the agrochemical industry in South
Africa. Over the years, Novartis CP SA developed a very strong distribution network. This
network was partly the reason for Novartis' success in the field. This distribution network, in
broad terms, was managed as a franchise. In other words, Novartis CP SA gave an independant company the right to sell its product range in an allocated geographical area.
Today, all the suppliers of researched-based products are using dealerships to distribute
their products. Although this system worked very well, it was important for Novartis CP SA to
adapt this system if the situation in the agrochemical and agricultural industries would change.
Due to the changes that took place in both industries, it was of utmost importance for Novartis
CP SA to gain more control over the management of the distribution network. As a supplier,
it was also important that Novartis CP SA tried to stabilise the fragmented distribution industry
by grouping some of the individual dealerships together. As the leader in this transformation
process, Novartis CP SA was in a position to choose its partners.
With the establishment of Novon Crop Protection Chemicals (Novon), a company was formed
in which Novartis AG and the various dealerships, as a group, has a shareholding of 45%
each. In exchange for the shares in Novon, each dealership offered a 26% (veto right)
shareholding in their companies to Novon. Via Novon, Novartis CP SA created a distribution
company which will be able to defend its marketshare in the future. / AFRIKAANSE OPSOMMING: Novartis is 'n Switserse maatskappy wat spesialiseer in die lewenswetenskappe met sy
hoofkantoor in Basel, Switserland. Novartis se besigheid word in drie kernaktiwiteite verdeel
naamlik; gesondheidsorg, verbruikersgesondheid en landboubesigheid (Novartis AG).
Landboubesigheid behels weer gewasbeskerming, saad en dieregesondheid.
Novartis AG verdeel sy besigheid in vyf geografiese streke: NAFTA, Wes-Europa, Sentraalen
Suid-Amerika, Asië/Pasifiese lande en Besigheid Internasionaal. Novartis Gewasbeskerming
Suid-Afrika (Novartis CP SA) rapporteer aan Besigheid Internasionaal.
Die finansiële posisie van produsente in verskeie vertakkings van die landboubedryf het oor
die laaste aantal jare aansienlik verswak. Daar is verskeie redes vir hierdie tendens, waaronder
'n afname in netto boerdery inkomste, swak weersomstandighede, 'n regering wat nie
simpatie toon met die kommersiële produsent nie, makro-ekonomiese faktore ('n verswakking
van die plaaslike geldeenheid en hoë rentekoerse), asook swak finansiele en algemene
bestuur deur produsente, die belangrikstes is.
Vanweë hierdie swak prestasies, het die landboubedryf in sy geheel nie werklik enige groei
getoon nie. Insetverskaffers soos die landbouchemiese bedryf het dienooreenkomstig ook
nie oor die afgelope aantal jare werklik reële groei getoon nie. Voorts het die liandbouchemiese
bedryf in Suid Afrika ook oor die afgelope aantal jare verander. Verskaffers van veral generiese
produkte het toegeneem.
Die landbouchemiese bedryf word deur Wet 36 van 1947 gereguleer. Hierdie wet maak dit
vir die vervaardigers van generiese produkte baie maklik en goedkoop om produkte te
registreer. Die toename in goedkoper, generiese produkte het die verskaffers van
navorsingsgebaseerde produkte se verkope (prys en volume) onder kwaai druk geplaas. As
gevolg van 'n wanbalans tussen die aantal verskaffers en verspreiders in Suid-Afrika, het
hierdie generiese vervaardigers maklik gewillige verspreiders van hul produkte gekry.
Novartis CP SA het tans die grootste markaandeel in die landbouchemiese bedryf in Suid-
Afrika. Hierdie posisie as markleier, is gevestig met die hulp van sy verspreidingsnetwerk. In
breë trekke het Novartis CP SA sy handelaarsnetwerk op die beginsels van 'n bedryfsreg
(franchise) bestuur. Dit bring mee dat Novartis CP SA aan onafhanklke maatskappye die
reg gee om sy produkreeks in 'n spesifieke geografiese area te versprei. Die meeste verskaffers van landbouchemiese produkte in Suid-Afrika maak tans van handelaars gebruik
om hul produkte te versprei. Alhoewel hierdie stelsel effektief was, was dit vir Novartis CP SA
belangrik om dit aan te pas by veranderende omstandighede binne die landboubedryf.
Dit was vir Novartis CP SA belangrik om deel te wees van die besluitneming en bestuur van
die verspreidingsnetwerk, asook om die reeds gefragmenteerde verspreidingsbedryf te
stabiliseer. Deur hierin die voorloper te wees, was Novartis CP SA in staat om te kies met
watter van die plaaslike verspreidingsmaatskappye hy in vennootskap wou gaan.
Met die stigting van Novon Gewasbeskerming Chemikalieë (Novon), het daar 'n maatskappy
ontstaan waarin Novartis AG 45% aandeel het, terwyl die onderskeie handelaars ook 'n
aandeel in die maatskappy het ( 45% in totaal vir al die handelaars). As teenprestasie, het
Novon 26% aandeel (dus 'n vetoreg) in elkeen van die handelaars bekom.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/52365 |
| Date | 03 1900 |
| Creators | Viljoen, Philippus |
| Contributors | Burger, J., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | af_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | [80] p. : ill. |
| Rights | Stellenbosch University |
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