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Question 1
1 b. Porter’s 5 Forces analysis
Competitive rivalry
The possible key competitors are Merck &Co, GlaxoSmithKline, Sanofi-Aventis, other
brand-name pharmaceutical firms and generic firms.
Explanation Threat Level

(with supporting case evidence) (High, moderate or
low)
Competitor Balance There is competitive balance. Large scale of competitors with a total
asset of $20 billion in 2005. Hence, they are able to compete with
each other aggressively (Exhibit 3).
So the competitive rivalry is high
High
Industry Growth
Rate
PESTEL>Socio-cultural: cheaper generic drugs in the market, result
more competition to retain the market share.
Hence, the industry growth rate is high, low competitive rivalry.
Low
Fixed Cost High fixed cost required. $802 million investment (fixed) cost
required to bring new medicine to market (pg 2, para 4).
Thus, the threat level is high as competitors will compete with each
other for revenues.
High
Exit Barriers High exit barriers. P5>Threat of New entrants>Scale & Experience:
High costs incurred, making competitors reluctant to exit the
industry, result high competitive rivalry
High
Differentiation Low differentiation. P5>Threat of New entrants>Differentiation:
More generic drugs in the market cause intense competition among
the existing players as consumers able to switch.
High
Sub-conclusion :
The threat level of competitive rivalry is high as the increase in generic drug causes an intense competition
allowing customers having more choices and high cost incurred. Thus, the dominant factors are fixed cost and
differentiation
Question 1
1 b. Porter’s 5 Forces analysis – Conclusion
In conclusion, the industry is not attractive as there are intense competition with the 3 broad
categories of competitors who are brand-name pharmaceutical (i.e. GlaxoSmithKline, Merck,
etc), generic and biotechnology firms thus resulting some difficulties in making differentiated
products. Thus, the dominant factor is competitive rivalry.

Question 2
2 a. Strategic Capabilities
Bundled Resources + Competences = Strategic Capabilities
Human Resources:
‘Famously top-down Pfizer’ sales
forces.
(pg 12, para 5)
 Intense training for reps; reps
rehearse 30-second briefs.
 Often spend time with doctors,
may result them recommending
drugs with therapeutic equivalents
(pg 12, para 5)
SC#1 – Ability to market its
product to its consumers
effectively
Financial:
$170,000 per year for each rep
which including car, computer and
benefits
(pg 12, para 5)
By tracking the number of doctors