g China and India P5Power of of suppliers Thus the

G china and india p5power of of suppliers thus the

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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
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(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.
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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
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  • Spring '17
  • Business, pg, Drug development, Pfizer Inc

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