Farmacias Similares: Disrupting the Mexican Healthcare System by Targeting the Bottom of the Pyramid

Farmacias Similares: Disrupting the Mexican Healthcare System by Targeting the Bottom of the Pyramid
Case Code: BSTR700
Case Length: 16 Pages
Period: 1950-2024
Pub Date: 2025
Teaching Note: Available
 Price: Rs.400
Organization : Farmacias de Similares SA de CV
Industry : Pharmaceuticals & Biotech
Countries : Mexico
Themes: Blue Ocean Strategy, Business Models Channel Strategy & Development,Disruption
Farmacias Similares: Disrupting the Mexican Healthcare System by Targeting the Bottom of the Pyramid
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case “Farmacias Similares: Disrupting the Mexican Healthcare System by Targeting the Bottom of the Pyramid” provides an overview of the way Mexico’s largest pharmacy chain, Farmacias de Similares SA de CV (FS), disrupted the Mexican healthcare system by offering affordable generic medicines to customers at the Bottom of the Pyramid. The case starts out by providing an in-depth look at the issues plaguing the Mexican healthcare system that restricted the growth of generic medicine companies. The case then documents how a change brought about by the Mexican government in the health law opened up the generic medicine market and enabled FS to target the underserved BoP market through its pharmacy outlets that sold its branded generic medicines at low prices. FS then created the pharmacy-doctor business model, wherein it opened a health clinic within each of its pharmacies, which enabled it to make further inroads into the BoP segment.

The case describes how FS created a popular mascot – the friendly and cheerful Dr. Simi – to create customer awareness about generic medicines and dispel any misconceptions about them, and how this also played a major role in its market success. Ultimately, FS went on to create a blue ocean in the Mexican healthcare system and its success enabled it to make a market entry into various other Latin American markets. Eventually, several other players entered the Mexican healthcare market, each one targeting the BoP segment with a similar business model. Can FS compete effectively in the market by leveraging its strong brand image and vast network and one day emerge as the largest pharmacy chain (by points of sale) in the world?

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the challenges that people at the Bottom of the Pyramid (BoP) face with regard to poor healthcare systems.
  • Examine the impact of changes in the business environment on a company’s prospects.
  • Devise strategies to disrupt a market and create a blue ocean.
  • Analyze the effectiveness of mascot marketing in creating customer trust in the BoP segmen.t
  • Develop a growth strategy for a company operating in a highly competitive marke.t

Contents

Keywords

Bottom of the Pyramid; Disruption; Healthcare Management; Blue Ocean; Growth Strategy; Competitive Strategy; Distribution Channel; Mascot Marketing; Conscious Capitalism; Business Model; Trickle up Innovation; International Market Entry and Expansion; Scaling-up; Value Innovation; “Eliminate-Reduce-Raise-Create (ERRC) Grid,Pharma industry; Business Environment; Generic Products; Public Sector; Innovation; Accessibility; Affordability; Brand Management; Populist Privatization; Value – Added Services

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