Gsk Marketing Planning

High capital expenditure into research and development, lengthy approval process, marketing before any realized returns are a major deterrent for any new entrant. It is a highly regulated industry. Also, the presence of “big pharma” companies deters new competitors.

The barriers a Business must deal with, such as competitors, substitutes, customers, supplier, etc are often referred to as:

Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:

The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.

Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

Factors that can limit the threat of new entrants are known as barriers to entry. In this case barriers to entry are low because: there is no government intervention to prevent businesses from entering the industry, resources are abundant, and customers’ switching costs are low as well as fixed costs to start this type of business.

Potential New Entrants: The barriers for entry for this product are low. The use of the internet by the end consumer also tends to lower this barrier.

Threat to new entrants: There is no barrier to entry in this industry but it might be difficult for newcomers to compete against existing well establishing companies.

Barriers to Entry: The entry barriers in the market are relatively low, making it easy to access. However, as the market is saturated it could be unlikely for new companies to decide to start new enterprises in this field.

Threats from Suppliers Company G’s current relationship with our suppliers are solid. Our reputation for putting out good products, consistently, and our steady demand for parts will enable us to establish a good foundation with our new suppliers. The parts that we’ll be purchasing from them can be made in various arenas and therefore we’ll be able to shop for the best company to do business with. A company we contract with can expect a long and fruitful relationship with us. We will be establishing with our new suppliers no compete clauses as well as confidentiality statements as to the design of our components.

“GSK” According to its price differential strategy or price discrimination which is a sort of Monopolistic market power was separated from its customers, this power came from where? GSK had sufficient control over prescriptions drugs to determine significantly the terms on which other individuals shall have access to it and this power make GSK able to alter market price of prescription drugs in America.

“GlaxoSmithKline (GSK) is a global healthcare company specialized in the discovery, development, manufacturing and marketing pharmaceutical and consumer health-related products. GSK has operations in about 114 countries, with products being sold in over 150 countries”.

A supplier group have even more power over an industry if it is dominated by a few companies, there are no substitute products, the industry is not an important consumer for the suppliers, their product is essential to the industry, the supplier differs costs, and forward integration potential of the supplier group exists. Labor supply can also influence the position of the suppliers. These factors are generally out of the control of the industry or company but strategy can alter the power of

Barriers to entry- there can either be high barriers to entry which makes the market unattractive and hard for new entrants or there can be low barriers to enter which make it easy for new entrants in the market.

In this case some big companies dominate the whole industry and as a result the small companies