Bristol-Myers Squibb Vrio Analysis Essay

773 Words Dec 2nd, 2010 4 Pages
VRIO Analysis

Bristol-Myers Squibb and other pharmaceutical companies have very limited space for the development of competitive advantage. This is due to the limitations set in patents available for new pharmaceuticals. Most chemicals in pharmaceutical products have an equivalently functional substitute making it possible to have multiple products on the market that have identical uses and outcomes. This being the case, pharmaceutical companies can’t rely on one particular product to provide competitive advantage.

Resources and Competencies | Value | Rarity | Imitability | Organized | Competitive Advantage? | R & D | Yes | Yes | Yes | Yes | Sustained | Brand Name | Yes | No | No | No | Parity | Product Diversification |
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Since Bristol-Myers Squibb’s is organized in this way, it has been able to keep the pace very well making it one of the largest research-based pharmaceutical company in the world.
Brand Name

Bristol-Myers Squibb’s gains competitive parity from its brand name in that it has a good reputation for creating products that work well and are safe. This provides value to the customer because they know that the product was heavily researched before it was marketed to the general public.
However, this is not rare among firms in this industry as all new products must be cleared by the Food and Drug Administration before it can be marketed which gives consumers a certain amount of security when choosing a product regardless of who produced it. This also means that it is somewhat easy to imitate. Once you get past the start-up costs, if you produce a product that is not already patented and is approved by the FDA, your product is just as good as the competitors. The reason for the lack of rarity and ease of imitability of the brand name is that, like other pharmaceutical companies, Bristol-Myers Squibb does not push the brand name but rather the name they have assigned to their product. The company’s name does not appear in any of its product’s advertisements. This being the case they must diversify their product line.
Product Diversity

Since researching new pharmaceutical products takes a great deal of time, the only way to keep the
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