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the global pharmaceutical industry case study answers

Category: Business Paper Type: Homework Reference: APA Words: 1500

Introduction

This case explains the evaluation of the industry and unusual strategic environment of pharmaceutical companies. Attention is drawn to climate pressures from payers and regulators. There are number of the challenges faces by the global pharmaceutical industry from all aspects. These issues and problems manifest their business in number of the methods via which these conglomerates need to have some form of strategy to manage these (Archer, 2013). The legislation is hard or strict in the pharmaceutical company that is threats for the pharmaceutical company. The main problem is for the business of these companies is that it associated with health of the people. Therefore, number of risks is associated with the business. The cost of the production of the single drug is very high. The reason is that this also includes the investment of the R & D. Moreover, the pharmaceutical companies also faces the problem of the dumping the waste. The waste from these companies is hazardous for the organization.

PESTLE Analysis of Pharmaceutical industry

The PESTLE analysis helps to scan the external environment of the industry and challenges it has to face.

Political Factors

From the passage of the time this industry receives the political attention because this sector also impacts the economy and has important component of social welfare. The interest has also created due to the high investments on the social and financial burden of the healthcare. For example, Medicare in US and UK’s National Health Services debate are now changing into the political sectors. This is one of the most important sectors for the health of health of the people (Chen, 2015). The new Obamacare Act is another example for the change or attraction of the politics in this sector.

Economical Factors

The global pharmaceutical companies are perceived as the contributory factor to the economy of the country. Therefore, this is becoming the important factor or the business for the profit of the organizations. This is the truth that the industry is playing important role in the development of the economy and increases the GDP (Herper, 2015). The increases the ratio of the disease person will also increase the sale and generates the revenue for the industry.

Social Factors

Assignment on 'The global pharmaceutical industry: in the land of shrinking giants' By ABC Dated: Introduction This case explains the evaluation of the industry and unusual strategic environment of pharmaceutical companies. Attention is drawn to climate pressures from payers and regulators. There are number of the challenges faces by the global pharmaceutical industry from all aspects. These issues and problems manifest their business in number of the methods via which these conglomerates need to have some form of strategy to manage these CITATION Dal13 \l 1033 (Archer, 2013). The legislation is hard or strict in the pharmaceutical company that is threats for the pharmaceutical company. The main problem is for the business of these companies is that it associated with health of the people. Therefore, number of risks is associated with the business. The cost of the production of the single drug is very high. The reason is that this also includes the investment of the R & D. Moreover, the pharmaceutical companies also faces the problem of the dumping the waste. The waste from these companies is hazardous for the organization. PESTLE Analysis of Pharmaceutical industry The PESTLE analysis helps to scan the external environment of the industry and challenges it has to face. Political Factors From the passage of the time this industry receives the political attention because this sector also impacts the economy and has important component of social welfare. The interest has also created due to the high investments on the social and financial burden of the healthcare. For example, Medicare in US and UK’s National Health Services debate are now changing into the political sectors. This is one of the most important sectors for the health of health of the people CITATION Liy15 \l 1033 (Chen, 2015). The new Obamacare Act is another example for the change or attraction of the politics in this sector. Economical Factors The global pharmaceutical companies are perceived as the contributory factor to the economy of the country. Therefore, this is becoming the important factor or the business for the profit of the organizations. This is the truth that the industry is playing important role in the development of the economy and increases the GDP CITATION Mat15 \l 1033 (Herper, 2015). The increases the ratio of the disease person will also increase the sale and generates the revenue for the industry. Social Factors Note that great wellbeing is a critical social prerequisite in a nation as the wellbeing state of a country contamination influences the levels of human profitability. This represents a high hazard to nations as a withering society can debilitate and minimize its financial stature like that late different worldwide pestilences like AIDS, SARS and so forth. The different factors also increases and decreases the life expectancy in different countries CITATION Joh15 \l 1033 (Osborn, 2015). Like the change in the life style, use of healthy food and improved quality of the healthcare. Technological Factors In the pharmaceutical business development is the name of the diversion, it guarantees that organizations are solid and use of the technology helps to increase the quality of the medication and also the patterns of the treatment CITATION Man06 \l 1033 (Potdar, 2006). The expansion of new innovations to new research on the most recent patterns in the medicinal crew is of significant significance. Examination shows that organizations who don't advance in their picked markets endure the outcomes of stagnation and getting to be immaterial. Environmental Factors The change in the climate also affects the business of the pharmaceutical industry. The research laboratories have to need some specific climate for the experimentation. The change in the patterns of the weather also influences the experiments and the business of the industry. For example, the cold and hot climate has potential to affect the people at large scale CITATION Quo15 \l 1033 (Quora , 2015). This may increase in the demand for some specific medication. Therefore, the moving to more green practices also allows the organization to save cost and respond friendly towards the internal and external environment. Legal Factors This is the highly regulated and compliance enforcing industry. As the outcomes of the immense legal, compliance and regulatory overheads has to absorb by the business. They have to keep all the rules and regulations in mind because there will be fraudulent practices in this industry at high level. Another strict thing for the company is that a reform in the legislation of permanent patent to the fix patent is 20 years. After the 20 years, the other companies can also make the same drug CITATION Quo15 \l 1033 (Quora , 2015). Therefore, investment id high but here is not surety that this drug will fulfills the expenses in the 20 years. Porter’s Five Force Analysis Threats of new entrants This risk is vey minimize because the barriers in entry this industry is very high. There need a lot of capital for the establishment of the structure of the organization. On the other hand, the development of the drug is also a crucial, time consuming and cost consuming procedure CITATION Dal13 \l 1033 (Archer, 2013). Therefore, the risks of new entrants in this market are very low. However, this probability cannot eliminate completely. Moreover, the approval for the development of the new product from FDA is very difficult. Rivalry among existing Firms This industry has the high level of the competition between them. The competition is consolidating and matures so that survival of the business is only possible with strong credit profiles. In year 2007, there are number of large pharmaceutical companies shut their business down due to this intense competition. In addition to this, the strong demand from the side of the customers also effects the competition CITATION Man06 \l 1033 (Potdar, 2006). Bargaining power of Suppliers The bargaining power of the suppliers is high because this filed is very complex and highly risky therefore, they bargaining power of the suppliers is high. Large pharmaceutical companies generally enjoy the specific buying power CITATION Liy15 \l 1033 (Chen, 2015). For the small business units this is hard to negotiate with suppliers. Bargaining power of Buyers The consumers have the little bargaining power. The medical officers also influence the buying power of the consumers. The name of the specific medication is available on the behalf of the particular vendor. Therefore, they have the less power to bargain CITATION Joh15 \l 1033 (Osborn, 2015). On the other hand, the situation and condition of the patient not let the people to bargain on the medication. Alternatives or Substitutes There is large threat for the alternatives and substitutes. In the open market competition when the patent has expired, the number of the other organizations or companies is starting producing their medicine for the same purpose CITATION Dal13 \l 1033 (Archer, 2013). Therefore, this also emphasizes the parent company to change prices. On the other hand, the consumer shifts to some other groups and alternatives. Important factors affecting the business of Pharmaceuticals There are the two main factors that are affecting the business of the pharmaceuticals company. These are the political and legal factors. The government is investing more and more in order to provide the best quality of the treatment and health facilities to the customers CITATION Quo15 \l 1033 (Quora , 2015). On the other hand, this also helps to main and keeps the strong position of the ruling party. Here involves the political factors, the political parties are giving attention to this sector for the sake of the strong political hold and the economy. On the other hand, the legal factors are also influencing the business of the pharmaceuticals. The rules and regulations are very strict that must follow. The FDA is a regulatory authority that helps to the keep check and balance of the pharmaceutical industry. This includes the approval for the production of the specific medication, pricing, availability, promotion and other related matters. On the other hand, association with these two factors technology also plays an important role for the existence of the business CITATION Dal13 \l 1033 (Archer, 2013). The new technology helps to develop the new formulas of the medicine and also lower the cost of the production. The intense care is required due in this business because this links with health or life of people. The main Driver’s for change for future of the Industry The key drivers for change are political variables that are prone to highly affect the success or disappointment of organizations in the pharmaceutical business. Government mediation in the pharmaceutical business as far as enactment with respect to value altering, publicizing and patent security shape a portion of the fundamental drivers for change. These are the main drivers that affect the business of pharmaceutical industry in future CITATION Joh15 \l 1033 (Osborn, 2015). Threats to big companies There are three main threats that big company has to face. This includes the legislation on the protection of the patent, power of the government to influence the price and entry of competitors with generic products. These are threats for the big pharmaceutical companies that influence the business. When the patent has expired the competitors come up in the market with generic medication or product that influences the sales of the company and also lowers the profit for the organization CITATION Mat15 \l 1033 (Herper, 2015). When the business is able to earn profit then they can invest more in the R & D for finding more and new solutions in healthcare. Respond to decrease the impact As the cost of generics are constantly less expensive in light of the fact that the organizations did not need to participate in a long procedure of innovative work it can be vital for pharmaceutical organizations to guarantee that they diminish the expense of that endless supply of the patent so they can contend. The pharmaceutical organizations can gain little organizations that will serve as nonexclusive divisions and in that way they will have the capacity to contend on equivalent balance with generics organizations and won't miss out piece of the pie on these little organizations CITATION Man06 \l 1033 (Potdar, 2006). The administration as an intense purchaser and controller can manage terms as far as cost. The best for a pharmaceutical organization may be to focus on specialty market or unmet therapeutic consideration whereby the organization will be a business sector pioneer and will be in a superior position to deal with government. Conclusion The enactment is hard or strict in the pharmaceutical organization that is dangers for the pharmaceutical organization. The pharmaceutical organizations serves it has turned into an extremely precarious circumstance to that their advantage are as different as anything that is confounded. Besides, the pharmaceutical organizations additionally confronts the issue of the dumping the waste. The waste from these organizations is unsafe for the association. Their body electorate of these multinational pharmaceutical organizations is comprised of different players who each have their own particular plan in as far as the nourishment or worth chain is concerned. References BIBLIOGRAPHY \l 1033 Archer, D. (2013) The Dark Side Of Big Pharma, [Online], Available: http://www.forbes.com/sites/dalearcher/2013/12/26/the-dark-side-of-big-pharma-2/ [18 November 2015]. Chen, L. (2015) 2015 Global 2000: The World's Largest Drug And Biotech Companies, [Online], Available: http://www.forbes.com/sites/liyanchen/2015/06/04/2015-global-2000-the-worlds-largest-drug-and-biotech-companies/ [18 November 2015]. Herper, M. (2015) Why Pharma Must Change Its Model, [Online], Available: http://www.forbes.com/sites/matthewherper/2015/07/30/why-pharma-must-change-its-model/ [18 November 2015]. Osborn, J. (2015) Desperately Seeking Price Reform: Pharma Needs To Embrace Transparency & Value To Protect Innovation, [Online], Available: http://www.forbes.com/sites/johnosborn/2015/08/13/desperately-seeking-price-reform-the-pharmaceutical-industry-needs-to-change-its-ways/ [18 November 2015]. Potdar, M.A. (2006) Pharmaceutical Quality Assurance, Pragati Books Pvt. Ltd. Quora (2015) What Is The Reaction Of The Pharmaceutical Industry To The Turing Pharmaceutical Price Hike?, [Online], Available: http://www.forbes.com/sites/quora/2015/10/27/what-is-the-reaction-of-the-pharmaceutical-industry-to-the-turing-pharmaceutical-price-hike/ [18 November 2015].

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