THE THREAT OF SUBSTITUTES The threat of substitutes is the idea that products

The threat of substitutes the threat of substitutes

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based on price, effectiveness, brand awareness, promotional discounts and accessibility are high. THE THREAT OF SUBSTITUTES: “ The threat of substitutes is the idea that products or services available from outside the given industry will come close to meeting the needs of current customers” (Rothaermel, 2017, pg. 82). Given the legal requirement process of manufacturing pharmaceuticals, Allstar Brands incurs a minimal threat of substitutes. RIVALRY AMONG EXISTING COMPETITORS: “ Rivalry among existing competitors describes the intensity with which companies within the same industry jockey for market share and profitability” (Rothaermel, 2017, pg. 82). Currently the largest revenue earning firm, the rivalry amongst existing competitors lies within brand awareness, pricing, and product effectiveness. Allstar Brands’ rivalry among existing competitors in the pharmaceutical market is high. Company: PESTLE Analysis 12 Existing Competitors Power of Buyers Threat of Substitute Products or Services Suppliers
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The PESTEL analysis is a framework for assessing the key features of the external environment outside of a business’s control. PESTEL is an acronym that stands for Political, Economic, Social, Technological, Ethical and Legal (tutor2u. 2016). The framework, dissected into segments, is used to assess the external environment of Edelman Financial Engines to determine threats and opportunities in the financial industry. POLITICAL: Processes and government actions that influence the method a firm does business is considered a political external factor (Rothaermel, 2017, pg. 67.) Politics pose a substantial threat and opportunity to Allstar Brands. New laws regarding ingredients, dosage and health safety are raised often and must be strictly followed by pharmaceutical firms. Political stress, like that of the China Tariff Trade War we are currently experiencing, can adversely effect supplier, exporting and importing prices that effect the firms bottom line. ECONOMICS: “ These factors determine an economy’s performance resulting in impacting the organizations operational capabilities as well as their profitability and sustainability” (Theile, 2018). Recessions, inflation and interest rates effect the volatility of the stock market and ultimately affect expenses, revenue and consumer pricing. During recessions consumers may spend less money and seek out alternative methods of healthcare. A threat is recognized regarding pricing and competitive advantage sustainability. SOCIAL: “ These factors scrutinize the social environment of the market , and gauge determinants like cultural trends, demographics, population analytics ” (pestleanalysis.com, n.d.). As the population grows it also ages and cost of living increases. Health care cures seem to be trending in a downward fashion as cures for illnesses are masked by medications that treat symptoms and not causes. The OTC remedy market seems it will always be in demand.
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