Research On Fosun Pharma’s Financial Strategy From The Perspective Of Value Chain

The pharmaceutical industry is related to people’s livelihood and has always attracted attention from all sides.In the context of economic transformation,the issue of people’s livelihood,as the foundation of the country,has been highly valued by governments at all levels.National policies are constantly evolving,and challenges and opportunities are everywhere.Under the traction of the introduction of national policies and the promotion of external capital markets,China’s pharmaceutical industry is ushering in a golden period of development.In the early days,most of China’s pharmaceutical companies adopted the mode of producing foreign generic drugs,but in recent years,with the reform of the "two-invoice system",innovative drugs have been included in the scope of medical insurance,and the revenue and profit margins of generic drugs have been further compressed.The influx of foreign-funded enterprises has sunk into second-and third-tier cities,which has brought great impact to domestic medicine.Many pharmaceutical companies realize that innovative drug research and development is the core competitiveness.However,the research and development of innovative drugs is difficult and the research and development cycle is long,forming certain industry barriers.Under such an industry background,many pharmaceutical companies have begun to layout the whole industry chain,extend their value chain through investment and mergers and acquisitions,and touch on areas with high upstream R&D or downstream sales value.Such a model has high requirements for the financial strategy of enterprises,and how to rationally allocate limited resources to achieve value-added throughout the value chain is the core issue.Through the analysis of Fosun Pharma’s financial indicators and non-financial indicators through the balanced scorecard,it can be seen that the implementation of Fosun Pharma’s financial strategy from the perspective of the value chain has achieved results,and its performance has improved from both financial and non-financial perspectives.This thesis first expounds the research background and significance,reviews the academic research on value chain theory and financial strategy,then introduces the relevant definitions and theories,and then introduces the internal and external environment and financial strategy of Fosun Pharma’s financial strategy implementation based on the case background of Fosun Pharma.The study found that Fosun Pharma adopts an expansive financial strategy,with a high proportion of foreign investment,especially equity investment,and an expansive investment strategy also has high requirements for the company’s capital.Fosun mainly ensures capital demand through external financing,forming a financing structure based on bond issuance and bank loans.Dividends are distributed at a continuously high percentage of cash dividend payout rates every year.In terms of the internal value chain,Fosun Pharma’s financial resources are required to focus on building core competitiveness and optimizing internal processes.Fosun sorted out that the core competitiveness of pharmaceutical enterprises is innovation and R&D,ensures capital needs by building multiple financing channels,retains core talents with equity incentives,increases R&D investment to create patented products,focuses on investing in the industrial chain,and strengthens its own advantageous production capacity.According to the evaluation and analysis,Fosun’s short-term solvency needs to be optimized,but the financing cost has decreased,the talent investment has achieved remarkable results,and the number of patented drugs has increased year after year.The external value chain focuses on value chain coordination and customer value realization,Fosun has carried out mergers and acquisitions and integration of the entire upstream,and established diversified sales and service channels.After analyzing the utility,it was found that Fosun’s profitability increased,internal processes were optimized,and a large number of mergers and acquisitions did not negatively affect its operating capacity.Finally,through the analysis of the evaluation results of Fosun Pharma’s financial strategy from the perspective of value chain,this thesis summarizes the experience and some issues that should be paid attention to in Fosun Pharma’s financial strategy from the perspective of value chain.Looking at the financial strategy of enterprises from the perspective of allocating financial resources to key links of the value chain,and integrating mergers and acquisitions of the industrial chain is the key to achieving the development and expansion of enterprises.At the same time,enterprises should also pay attention to the selection of value chain partners,give full play to the synergy effect of various sub-value chains,and ultimately realize the valueadded of customer value chains.