Eli Lilly And Company: The Global Pharmaceutical Company Essay

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Porter's Five Force in relation to Eli Lilly Threat of New Entrants Threat of new entrants is relatively high. Companies forming alliances are potential rivals. Even if earlier such company was not considered to be a threat, after merging with some research and development company or forming alliance with another pharmaceutical company it would become a rival to Eli Lilly. The threat is however weakened by significant research and development costs necessary to successfully enter the business. Eli Lilly’s focus on a relatively narrow market of sedatives and antidepressants weakens the threat of new entrants, but other products that form lesser part of company’s sales such as insulin and others are exposed to high threat of new…show more content…
All of the above makes the bargaining power of supplier low. In Eli Lilly’s case it is true that the power of suppliers is reversal of the buyer’s power. Threat of Substitute Product The threat of substitutes is not very high. Traditional medicine using drugs as a curing remedy is a main mean for treatment used by almost all healthcare institutions. Substitutes such as sport, yoga, alternative medicine are not very popular and unlikely to become such. However for the main product Prozac, which is an antidepressant drug, alternatives are possible because treating depression using alternative medicine, psychologist’s help and other means is more probable than treating of physical disease by similar means. The threat of substitutes is low, which is a significant advantage Rivalry Among Competitors The rivalry is tense in this business. However the competitiveness is rather unique in pharmaceutics. High costs of research and development hold the appearance of new rivals. It is also true that rivals are usually focused on a rather small market of specific medication. The main rivals Novo Nordisk A/S, Pfizer and Smithkline are narrowly oriented companies which however give Eli Lillys hard time producing such products as Zoloft – Prozac alternative. The competitive rivalry in the business is medium. SWOT MATRIX STRENGTHS-OPPORTUNITIES 1 Eli Lilly & Company should join strategic alliance to develop and market a blood

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