Premium Essay

Industry Analysis of the Pharmaceutical Industry

In:

Submitted By Peter8888
Words 1934
Pages 8
Corporate Development Strategies
Faculty 02 – Economics and Business Administration
Johann Wolfgang Goethe-University Frankfurt

Industry analysis of the pharmaceutical industry
Written assignment

Submitted by:

Heiko Kreuz, 4897736, s5706079@stud.uni-frankfurt.de
Janine Seelinger, 4896818, s1010710@stud.uni-frankfurt.de
Dana Winkler, 4497800, s1099437@stud.uni-frankfurt.de

Supervisor:
Prof. Dr. Lars Schweizer

November 6, 2015

Table of contents
1

Introduction...........................................................................................................................1

2

Theoretical framework of Porter’s Five Forces ........................................................1

3

Industry analysis by means of Porter’s Five Forces ................................................2
3.1 Competitive rivalry ................................................................................................... 2
3.2 Bargaining power of suppliers.................................................................................. 2
3.3 Bargaining power of buyers ..................................................................................... 2
3.4 Threat of substitutes ................................................................................................. 3
3.5 Threat of new entrants .............................................................................................. 3
3.6 The regulators ........................................................................................................... 4

4

Conclusion ..............................................................................................................................4

II

1 Introduction
The pharmaceutical industry has provided for over USD 980 billion in worldwide revenue in
2014 (Statista 2015) and has up to today been

Similar Documents

Premium Essay

Pestel Analysis of Pharmaceutical Industry

...A SWOT analysis identifies and assesses the strengths, weaknesses, opportunities and threats an organization faces. A SWOT analysis of the pharmaceutical industry illustrates to upper management what the industry is excelling in, what improvements need to be made, where growth is possible and what preemptive measures need to be taken to protect shareholder or company value. Strengths • The strengths of the pharmaceutical industry’s SWOT analysis document the internal industry components that are providing value, quality goods and services and overall excellence. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s strengths could include low operating overhead, firm fiscal management, low staff turnover, high return on investment (ROI), state-of-the-art laboratory equipment and an experienced research staff. Weaknesses • The weaknesses of the pharmaceutical industry’s SWOT analysis document the internal industry components that are not providing significant added value or are in need of improvement. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s weaknesses could include high-risk business modeling, disengaged Board of Directors, dated medical equipment, poor branding, low staff morale or diseconomies of scale. • Sponsored Links o viral clearance study ...

Words: 393 - Pages: 2

Premium Essay

Analysis of Indian Pharmaceutical Industry

...5) Chapter 1: Economic Analysis 7 6) Chapter 2: Industry Analysis 9 * Industry Life Cycle * Porters 5 Forces * SWOT * PESTLE * Correlation 7) Chapter 3: Company Analysis 24 * Company Profiles (10 Companies) * Financial Ratio Analysis * DCF Valuation * Valuation Shares 8) Conclusion 74 9) Bibliography 76 RESEARCH OBJECTIVES Research Project Topic: “Analysis and Valuation of the Indian Pharma Sector” The research objectives of this specialization project are: 1) Identifying the key indicators of the Global Pharma Industry 2) Understand and analyze the Indian Pharma Industry and identify the prominent players. 3) To examine the trends in the pharma industry 4) Fundamental and Technical Analyses of the Top 10 pharma companies in India. The main objective of this study is: 1) Valuation of the Top 10 Pharma companies 2) Finding the correct share price of the company 3) Making investment decision of- Buying, Selling or Holding the stocks of the respective pharma company. EXECUTIVE SUMMARY * Global Pharma Industry is likely to grow at a CAGR...

Words: 11741 - Pages: 47

Free Essay

Porter Analysis for Pharmaceutical Industry in Palestine

...Porter’s Analysis: Pharmaceutical Industry | Submitted to Dr. Grace Khoury | By: Asem Masri. Student No. 1125420 | 11/6/2014 | 1. Contents Introduction 1 Porter’s Five Forces Analysis 1 Threat of new entrants 1 Rivalry among existing firms 2 Threat of substitute products 2 Bargaining power of buyers 3 Bargaining power of suppliers 4 Relative Power of other stakeholders 4 Conclusion 5 References 5 Introduction The pharmaceutical industry in Palestine is one of the most profitable industries, with the Palestinian companies owning 55% and 30% market share of the private and public sectors respectively, and high potential of growth even more, in a market estimated at around USD 100 million. All these companies mostly reproduce generics that are seen as commodities rather than differentiated, and highly depend on preferred agreements with pharmacies, doctors, hospitals and medical centers to serve both as their marketing and distribution channels. All operating firms in the industry are publicly traded companies, are highly controlled and regulated, depend heavily on technology and require vast financial resources. Because of the large size , high complexity and vast financial requirements of the industry, it won’t be a straight forward task to decide on whether this industry is attractive to enter or not, without performing proper STEEP and industry analysis. In this case, we will focus on performing pharmaceutical industry analysis using Porter’s...

Words: 1927 - Pages: 8

Free Essay

Pestel Analysis of Pharmaceutical Industry

...ANNUAL REVIEWS Further Quick links to online content Ann. Rev. PharmacoL ToxicoL Copyright © 1983 1983. 23:87-101 by Annual Reviews Inc. All rights reserved THE TREATMENT OF ACETAMINOPHEN Annu. Rev. Pharmacol. Toxicol. 1983.23:87-101. Downloaded from www.annualreviews.org by Queen Mary & Westfield on 03/14/11. For personal use only. POISONING L. F. Prescott and J. A. J. H Critchley Regional Poisoning Treatment Centre, and University Department of Therapeutics and Clinical Pharmacology, The Royal Infirmary, Edinburgh, EH3 9YW, Scotland INTRODUCTION Acetaminophen (paracetamol, N-acetyl-p-aminophenol, 4-hydroxyacetani­ lide) is a non-prescription antipyretic analgesic that was first introduced into clinical medicine towards the end of the last century (1). It attracted little interest until it was found to be the major metabolite of both acetani­ lide and phenacetin (2, 3) and in recent years it has become an increasingly popular substitute for aspirin. Acetaminophen seemed to be remarkably safe when taken in recommended doses and formal toxicity studies were never carried out. In 1964 Eder (4) first reported liver damage in cats given 25-50 mglKg of acetaminophen daily for 26 weeks, and two years later Boyd & Bereczky described extensive hepatic necrosis in acute toxicity studies in rats (5). At the same time liver damage was first reported in man following acetaminophen overdosage (6, 7). The use of acetaminophen for self-poisoning has since...

Words: 7818 - Pages: 32

Premium Essay

Industry Analysis for Canadian Pharmaceutical (Prescription Drug) Industry

...Porter’s Five Forces analysis 1) Bargaining power of suppliers Who are suppliers? –chemical companies that manufacture ingredients for the drugs, companies that manufacture any packaging/packaging materials for drugs, employees that supply labour: • Many suppliers available in most cases • Resources supplied not scarce in most cases • Switching cost to another supplier low • Supplied product not typically differentiated • Supplier forward integration not a threat (small supplier cannot take over large drug company) • Customers are large in a consolidated pharma industry (drug industry has been seeing lots of mergers and acquisitions in recent years so drug companies tend to be very large) LOW Power of suppliers based on above. 2) Bargaining power of buyers Who are buyers? In this case buyers would be Doctors and Hospitals (look at the drug industry’s sales force, they service DRs and hospitals, as drugs need to be prescribed, they can’t just be purchased over the counter) • Many small buyers (lots of Doctor’s offices in most areas, maybe a few larger hospitals) • Each purchases a small proportion of industry output • Buyer backward integration not a threat (a Doctor or hospital is not going to take over a drug company) • Relatively few manufacturing firms due to industry consolidation • Few substitutes (alternative medicine, lifestyle changes are possible options in some cases, but if you need drugs for diabetes no real substitute for this outside...

Words: 611 - Pages: 3

Premium Essay

The Global Pharmaceutical Industry: Conduct an External Analysis

...The Global Pharmaceutical Industry: Conduct an external analysis Introduction The pharmaceutical industry is described by high levels of risky and lengthy R&D process, tough competition for intellectual property, tighter government regulations and powerful pressures on buying power. (Johnson, 2006) In 2011, several blockbuster drugs patent like Lipitor will expire, possibly endangering the revenues of the pharmaceutical industry for the next three to five years. On the global level, the historical supremacy of the US was being challenged with the highest market growth rates recorded in emerging markets. The industry more than ever need to get a handle on the slippery business by offering a true step change in strategy. This case study will critically analyse the Global Pharmaceutical Industry with PESTEL, Porter’s five forces, SWOT analysis and plausible views of industry in the future. PESTLE PESTLE analysis used to help organisation to understand in depth that what is the current status of the organisation and the external factors which are effecting. It also helps to the Management to make strategy for the future and overcome the weak areas of the organization. PESTLE is comprises of political, Economical, Social, Technological, Legal and Environmental factors. Political The both policies (domestic and foreign) of government have a great effect on the industry innovation as compare to the other factors. To get the attentions of firms due to increase the economic...

Words: 2635 - Pages: 11

Premium Essay

Economic

...The History and Analysis of the Pharmaceutical Industry Pharmaceuticals Industry Analysis 1. 2. 3. 4. 5. 6. 7. 8. Origins and Evolution Environmental Analysis (PEST) Structural Industry Analysis (Porter’s Five Forces) Strategic Issues Facing The Industry Analysis of Key Industry Participants and Strategy Pfizer – SWOT Analysis and Strategy Review Conclusion References 2 2 4 5 6 8 10 10 i Pharmaceuticals Industry Analysis Executive Summary This report provides an analytical strategic review of the pharmaceutical industry; it’s origins, evolution, development and competitive environment within which it operates and the strategic issues facing the industry. The report also offers an overview of the industry, it’s key players, their strategic outlook, the impact of technological developments and other strategic issues facing the industry. The latter sections of the report focuses on the industry’s leading firm, Pfizer\Pharmacia. Page 1 Pharmaceuticals Industry Analysis The Pharmaceutical Industry 1. Origins and Evolution 1 The modern pharmaceutical industry is a highly competitive non-assembled global industry. Its origins can be traced back to the nascent chemical industry of the late nineteenth century in the Upper Rhine Valley near Basel, Switzerland when dyestuffs were found to have antiseptic properties. A host of modern pharmaceutical companies all started out as Rhine-based family dyestuff and chemical companies e.g. Hoffman-La Roche...

Words: 4198 - Pages: 17

Premium Essay

Financial Ratio Analysis of Square Pharmaceuticals Limited

...Electronic copy available at: http://ssrn.com/abstract=2065057 Financial Ratio Analysis of Square Pharmaceuticals Limited Asif Ahmed ACA Trainee Accountants KPMG in Bangladesh Rahman Rahman Huq Chartered Accountants 9 Mohakhali C/A Dhaka – 1212. ACA Student The Institute of Chartered Accountants (ICAB) CA Bhaban, Kazi Nazrul Islam Avenue Dhaka, Bangladesh Contact E-mail: asif.ahmed0001@yahoo.com Electronic copy available at: http://ssrn.com/abstract=2065057 Financial Ratio Analysis of Square Pharmaceuticals Limited 2 of 24 TABLE OF CONTENTS Page No. Executive Summary 3 Chapter 1 Introduction 4 - 6 1. Introduction 4 2. Objectives of Study 4 3. Scope of Study 5 4. Methodology of Analysis 5 5. Limitations or Problem Statement 6 Chapter 2 Key Financial Highlights 7 - 11 2.1. Overview of the Organization 7 2.2. Key Financial Highlights 7 Chapter 3 Ratio Analysis 12 - 19 3.1. Liquidity Ratio Analysis; 12 3.2. Asset Management Ratio Analysis; 13 3.3. Debt Management Ratio Analysis; 15 3.4. Profitability Ratio Analysis; and 16 3.5. Market Value Ratio Analysis. 17 Conclusion 20 Recommendations 21 Bibliography 22 Annexure 23 Financial Ratio Analysis of Square Pharmaceuticals Limited 3 of 24 EXECUTIVE SUMMARY This paper is mainly an analytical outcome of financial ratio analysis of Square Pharmaceuticals Limited and pharmaceuticals industry. Eleven (11) ratios are selected to judged the various aspects of efficiency of the company, including –...

Words: 4143 - Pages: 17

Premium Essay

Maintenance

...Report analyzes the US pharmaceutical industry Report analyzes the US pharmaceutical industry Published on April 9, 2010 at 12:04 PM Research and Markets (http://www.researchandmarkets.com/research/eded8d/pharmaceutical_ind) has announced the addition of the "Pharmaceutical Industry in the United States" report to their offering. Over the past decade, pharmaceutical companies have pushed the scientific envelope, working at the cellular and molecular levels to dramatically advance the treatment of disease. Between 1995 and 2005, more than 300 new drugs, biologics, and vaccines that prevent and treat over 150 conditions were approved by the FDA. The FDA also gave the go-ahead for numerous new indications for previously approved medicines, allowing physicians to tailor treatment strategies to meet a patients individual disease status, past medication history, side effect tolerance, and preferences. The US pharmaceutical industry is a highly globalized industry, dominated by multinational companies that engage in significant business activity in many countries and whose products are distributed and marketed worldwide. The industry has undergone dramatic structural changes over the past few decades, with the rise of the biotechnology sector, substantial growth in demand driven by demographics and substitution away from other therapeutic modalities such as surgery, and increased competition from globally active generic manufacturers. The pharmaceutical industry is under mounting scrutiny...

Words: 643 - Pages: 3

Premium Essay

Pharma Industry Analysis

...The Pharmaceutical Industry 1. Origins and Evolution The modern pharmaceutical industry is a highly competitive non-assembled1 global industry. Its origins can be traced back to the nascent chemical industry of the late nineteenth century in the Upper Rhine Valley near Basel, Switzerland when dyestuffs were found to have antiseptic properties. A host of modern pharmaceutical companies all started out as Rhine-based family dyestuff and chemical companies e.g. Hoffman-La Roche, Sandoz, Ciba-Geigy (the product of a merger between Ciba and Geigy), Novartis2 etc. Most are still going strong today3. Over time many of these chemical companies moved into the production of pharmaceuticals and other synthetic chemicals and they gradually evolved into global players. The introduction and success of penicillin in the early forties and the relative success of other innovative drugs, institutionalized research and development (R&D) efforts in the industry 4. The industry expanded rapidly in the sixties, benefiting from new discoveries and a lax regulatory environment. During this period healthcare spending boomed as global economies prospered. The industry witnessed major developments in the seventies with the introduction of tighter regulatory controls, especially with the introduction of regulations governing the manufacture of ‘generics’5. The new regulations revoked permanent patents and established fixed periods on patent protection for branded products, a result of...

Words: 1706 - Pages: 7

Premium Essay

Beximco Ltd

... LETTER OF TRANSMITTAL August 23, 2011 Ms.Jafrin Sultana Assistant professor Department Of Business Administration Dhaka City College Dhaka-1205 Subject: Submission of Report on “Beximco Pharmaceutical Limited”. Dear Sir, We have been recommended to prepare a report on “Beximco Pharmaceutical Limited” that was assigned by the Department of Business Administration of Dhaka city College on June,2011.we are highly grateful for providing us such an opportunity to study & submit the report. This report helps us to know about the service sector in Bangladesh and the various problems and potentiality of this sector. Through this process we have tried to obtain a clear knowledge and accurate information about the pharmaceutical industry. We hope that it will help us to build up Business Leader in future and proper knowledge in our academic life. We are thanking you for your kind consideration & proper guidance to prepare this report. Sincerely, Group: Batch-9; Section-D Department of Business Administration Dhaka City College Dhaka. Nur Tamanna (On behalf of the group members) ACKNOWLEDGEMENT The project paper is essential for the business studies students and also for our job sector in future. And this particular report on Beximco Pharmaceutical Limited will very much helpful for us to develop our practical experience & expertise. It is an excellent opportunity for us to have knowledge about...

Words: 10833 - Pages: 44

Premium Essay

Pharmaceutical

...TEACHING NOTES The Global Pharmaceutical Industry Sarah Holland (Manchester Business School) and Bernardo Bátiz-Lazo (London South Bank University) 1. Introduction The case describes how the prescription pharmaceutical industry has changed since its modern beginnings in the early 1950s. The various forces affecting the competitive environment of the industry are discussed in terms of origins, immediate past and immediate future (2004 onwards). As a result, the note provides insights into the evolution of barriers to enter and exit the industry for prescription pharmaceuticals, while aiming to help students to recognise how to set boundaries for an industry. This is a detailed industry note on the “ethical” pharmaceutical industry which provides an opportunity to analyse key success factors of major players. The note centres on a descriptive overview of the predominant issues in the three major Triad market areas: the US, Europe and Japan (although major issues in emerging markets are also mentioned). The note covers the overall industry environment with in-depth discussion of the driving forces in the industry such as globalisation (in particular global regulatory issues, changing world demographics and worldwide pricing disparities); development of new technology; the importance of time to market; and amalgamations. The case also examines issues around corporate social responsibility. 2. Position of the Case The pharmaceutical industry case study lends itself to: •...

Words: 8602 - Pages: 35

Premium Essay

Term Paper on Square Pharmaceutical Bd

...Strategies have multifunctional and multidivisional consequences and required consideration of both the external and internal factors facing the firm. Most Strategic Management Model There are several Strategic Models are available and used in different organizations but following are the most used strategic models: 1. PEST analysis 2. STEER Analysis 3. Five Forces Model 4. Strategic Group Map 5. SWOT analysis 6. Blue Ocean Strategies 7. Open innovation 8. McKinsey seven S model Company Detailed Profile including mission & vision and Organogram Company Detail Profile Square pharmaceutical is now the most leading company in Bangladesh since 1985 and is now on its way to becoming a high performance global player. Today it has achieved a state of mind among consumers. This company has founded in 1958 and since then with hard work and dedication among employees and top management, it has reached the position where every pharmaceutical company wants to reach.  Square went public in 1991 and is currently listed on the Dhaka Stock Exchange and Chittagong Stock Exchange. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership...

Words: 5122 - Pages: 21

Premium Essay

Strategic Managment

...GLOBAL PHARMACEUTICAL INDUSTRY : SWALLOWING A BETTER PILL 1. INTRODUCTION The global pharmaceutical industry is a multinational industry that develops, manufactures, and sells drugs licensed for the treatment. Pharmaceutical companies can sell generic or patent medicines. Health products of the pharmaceutical industry is very often found on the market in the world so that makes the brand of the pharmaceutical industry they are known in the world because of the many products sold are certainly many benefits. As we know there are many companies working in this field. Among the companies that are well known, namely Bayer Healthcare, Johnson & Johnson, Pfizer, Novartis, Hoffmann-La Roche, GlaxoSmithKline, Sanofi-Aventis and many more. The names of these companies are not necessarily familiar to the public. Among the names of global pharmaceutical companies are already very well known, many of which are based in United States. With reasonable price, not too expensive or cheap and very easy to find. Medicinal products from global pharmaceutical companies to be very favorite countries in the world. But of course if explored further, something will have positive and negative, strengths and weaknesses also have external influences whether it be an opportunity or a threat. In this paper will explain a little about the SWOT analysis of the global pharmaceutical companies along with solutions and recommendations. 2. SWOT Analysis SWOT analysis is the analysis of situations...

Words: 1624 - Pages: 7

Premium Essay

Financial Analysis of Selected Pharmaceutical Companies in Bangladesh

...2011 www.iiste.org Financial Analysis of Selected Pharmaceutical Companies in Bangladesh Md. Tofael Hossain Majumder Department of Accounting and Information Systems, Faculty of Business Studies Comilla University, Comilla, Bangladesh. Email: tofael_cou@yahoo.com Mohammed Mizanur Rahman School of Business and Economics, Atish Dipankar University of Science and Technology Dhaka, Bangladesh. Email: mizancu@yahoo.com Abstract The Pharmaceutical industry plays a vital role in the socio-economic development of Bangladesh. But the net profit of this industry has decreased for the last few years. This study is designed to review the financial performance of this industry, to test its strengths and weaknesses. The financial performance of this industry is measured in terms of Ratio (Profitability, Liquidity, Solvency and Activity ratio) Analysis and in terms of Testing Financial Soundness by using Multivariate Discriminate Analysis (MDA) as developed by Prof. Altman. For the source of data mainly relied on Annual Reports and official records. It was observed from the study of the financial statement of the Pharmaceutical industry that the profit earning capacity, liquidity position, financial position and the performance of the most of the Pharmaceuticals are not in sound position and it was also observed that the most of the Pharmaceuticals has a lower level position of bankruptcy. The reasons behind this position of the industry are inefficiency of financial...

Words: 13441 - Pages: 54