C A S E T E A C H I N G N O T E S
Pierre Fabre: culture and the challenges of
internationalisation
Ludovic Cailluet
1. Introduction
The case deals with the development of a pharmaceutical and dermo-cosmetics company which
was owned and controlled by its founder, Pierre Fabre. The company (Pierre Fabre
2. Position of the case
The case is integrated with and supports Chapter 5 of Exploring Strategy, i.e. Culture and
strategy. It is used to illustrate how a companys culture is built and how it influences strategic
3. Learning objectives
The case is designed to help students understand the impact of history on corporate culture and
how this in turn has an impact on building organisational capabilities and how it could be used
252
4. Teaching scheme
Pierre Fabre is most likely to be used as a basis for plenary discussion on the influence of
5. Questions for discussion
The following questions can be used:
1. What are the distinctive elements of the Pierre Fabre groups history that have shaped its
corporate culture?
2. How do these help in building a sustainable competitive advantage?
6. Case analysis
1. What are the distinctive elements of the Pierre Fabre groups history that have shaped its
corporate culture?
The first point is to focus on the role of Mr. Pierre Fabre as an entrepreneur and leader. The man
has successfully created a pharmaceutical multinational company starting from a small
provincial town pharmacy. Pierre Fabre was always committed to his home region and this has
253
The identity of the group is based on the fact that it is diversified with three major divisions:
prescription drugs, family medication (OTC) and dermo-cosmetics.
Through its relatively short history, the company has taken on bold challenges and
developed by steadily reinvesting profits into drug discovery and international expansion.
Its culture has been more oriented to develop turnover than pay dividends to shareholders.
2. How do these help in building a sustainable competitive advantage?
The first element to point out to students is the fact that, due to being private and independent
the company does not suffer from the short-term pressure of the financial markets. This has
been a true competitive advantage in terms of its R&D effort in the prescription drug business.
It has also permitted the creation of a set of (now profitable) dermo-cosmetics brands that
suffered from losses during their early years.
3. When might a strong corporate culture become a weakness for an organisation?
The independence of the company has long been established as a non-negotiable element of the
254
4. Is it possible to change the strategy of a company with a strong culture? If so how?
It is possible to change a companys culture, but it requires a good understanding of the current
characteristics of the company culture. A strong identity is not necessarily a synonym for
inertia. At Pierre Fabre, the company has seen a lot of diversification and faced many challenges
5. What kinds of internationalisation challenges are illustrated in the case?
The first challenge to the internationalisation of the Pierre Fabre business model is entering
countries/markets which do not possess the necessary intermediaries. The magic triangle of
competence linking client/patient, prescriber (physician, dermatologist or paediatrician) and
6. To what extent is the Pierre Fabre dermo-cosmetics business model applicable in all
countries?
This is a question to which many students will answer It is not applicable where you do not
have the magic triangle. However, the history of Pierre Fabre has shown a high degree of
