Designing a Global Strategy for Pharmaceutical Industry

1300 WordsApr 23, 20196 Pages
Designing a Global Strategy for Pharmaceutical Industry Introduction The pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals compounds for medical purpose. Pharmaceutical companies produce generic, brand medications and medical devices. The industry is subject to a complex regulatory environment regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs. As per WHO "The 10 largest drugs companies control over one-third of this market, several with sales of more than US$10 billion a year and profit margins of about 30%. Six are based in the United States and four in Europe. Companies currently spend one-third of all sales revenue on marketing their products - roughly twice what…show more content…
When a particular industry is highly profitable and barriers to entry are low, the forces of imitation and diffusion cause such an industry to spread across international borders. • Home Country Demand The demand for pharmaceutical is low in China comparing to Germany, UK, USA and Japan. USA, Japan, France, Germany, UK, Italy, Spain, Canada, Brazil and Mexico are the largest consumers; this also explains why Germany, USA and Japan have the largest players. • Related and Supporting Industries Chemical industries was one of the directly supporting industries and 26 of the chemical firms on the world's top 50 chemical firms are from Japan, Germany and US(Germany - 6, Japan-9,US-11). However as the nature of Pharmaceutical industry changes, the competition increase, need for outside finance is increasing. A well developed financial market is increasingly becoming an important supporting. IT innovation and Biotech innovations will also shift competitive advantage to emerging countries as the focus shifts from discovering new molecules to selecting the right molecule for successful drug development • Competitiveness of the home Industry The intense competition that exists among German pharmaceutical companies has made them a formidable force in the global market. The competitiveness of the home industry is also decided by the government support to create technology clusters. For instance, Singapore has become a hot spot for pharmaceutical
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