Porter's Five Forces Pharmaceutical Industry

Overview of the global pharmaceutical industry In 2003, Britain’s Guardian newspaper commented that, “on the face of It, the global pharmaceutical Industry looks like the epitome of a modern, mature Industry that has found a comfortable way to make profits by the billion: It’s global, hi-tech, and has the ultimate customer, the healthcare budgets of the world’s richest countries. ” Guardian swept 2003 The global pharmaceutical industry is nowadays made up of thousands of companies contained in this industry.

There are an elite ten firms which are based in Europe and America.

These firms alone account for nearly half of the world’s global drug market on their own. This said the current industry leader in terms of global sales is Pfizer and It has only roughly 10% of the market. This shows that there are not only one or a few dominant players in the market and that competition within the pharmaceutical Industry Is severe. Porters flee forces model One of the best ways to analyses industries competitiveness is by using Michael Porters five forces framework.

This framework is useful for business when creating new strategies, plans or making investment decisions about a business but will be essentially used to measure the attractiveness of an industry. It suggests there are 5 main forces, which can help a company develop a broad analysis of its competitive position in its market. Competitive rivalry The pharmaceutical Industry within the asses was fragmented with hundreds of companies competing with a similar market share. The companies focused entirely on different classes of drugs which helped each of the organizations involved.

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Research Paper On Pharmaceutical Industry

The result of this was that most firms had few direct competitors so they were very comfortable. The lack of direct competition allowed pharmaceutical companies to raise rises as they pleased. With this lack of competition competitive rivalry was almost nonexistent then. Throughout the asses, rivalry in the pharmaceutical industry increased and the market changed rapidly. Some drug companies felt the pressure to take advantage of economies of scale. By choosing to merge and acquire other firms/biotech within the Industry.

Unlike the drug companies, blotches don’t have high overheads, and they possess a high quality product. While traditionally these biotech had discovered new drugs and then sold their discoveries to already established drug companies. This sparked rivalry among the top firms as areas of expertise then Degas to overlap Ana sensually teen weren’t as comfortable as In ten early Additional rivalry came from new competitors in the market for example some biotech that began began not only to discover but also to develop and market their own drugs.