The pharmaceutical industry, 2000
Bernardo Bátiz-Lazo & Sarah Holand
Discussion Questions for Case: The Pharmaceutical Industry, 2000
Identify the main environmental forces affecting the pharmaceutical industry
The essential purpose of the external analysis is to identify strategicopportunities and threats in the organization´s operating environment that will affect how it pursues its mission (What it is that the company does). Three interrelated environments should be examined at this stage: the industry environment in which the company operates, the country or national environment , and the wider socioeconomic or macroenvironment.
External forces directly affect bothsuppliers and distributors.
We need a defined mission to design strategies to achieve long-term goals and establish policies to achieve annual targets.
External forces can be divided into five general categories:
1. Economic forces
2. Social forces, cultural, demographic and environmental
3. Political, governmental and legal
4. Technological forces
5. Forces of competition
Analyzing the industyenvironment requieres an assessment of the competitive structure of the company´s industry, including the competitive position of the company and its major rivals.Its also requires analysis of the nature, stage, dynamics, and history of the industry. Because many markets are now global markets, analyzing the industry environment also means asseing the impact of globalization on competitionwithin an industry. Such an analysis may reveal that a company should move some production facilities to another nation, that is should aggressively expand in emerging markets such as China, or that it should beware of new competition from emerging nations.
If external forces change will translate into changes in consumer demand, industrial products and services.
External forces affect the type ofproducts being developed, the nature of the strategies for positioning and market segmentation, types of services offered and businesses selected for acquisition or sale. External forces directly affect both suppliers and distributors.
Economic forces in the pharmaceutical industry in the last decade has seen strong global economic growth, for example from 1998 to 1999 experienced a growth in justone year of 11%, with projected annual sales growth of 8 % the following 5 years.
U.S. is the country's fastest growing since 1995 representing 60% of drug sales since then, becoming a key market for international companies.
In the external forces, another key factor is the demographic, consider the type of population we are addressing. For example do not have the same needs as people living inan underdeveloped country because they need to improve their nutrition and sanitation, which implies that the use of drugs in this area is completely different which can be used in developed countries with better conditions of life.
In the developing countries have a greater concern for access to effective products for simple infections and diseases in developed countries are not a concern. TheAIDS epidemic in Africa showed how the right solutions for advanced economies are unrealistic and inappropriate for developing countries.
All these examples do we see as the environment directly affects an industry, so, we do not use the same techniques and have the same problems in different parts of the world.
In our society, advertising plays a very important role. Strong growth in advertisingspending by the pharmaceutical industry has created a brand awareness among consumers, being willing to take this drug by name even going to pay more by them.
Currently there are new trends and therapeutic classes. New research and studies show as there are many groups of people with chronic diseases such groups due to lifestyle diseases such as impotence, obesity and hair loss. These are the...