Case study of Pharmacy Industry

Name of Industry or Sector (Strategic Group)The Pharmaceutical Industry

Threat of new entrants

Several aspects ease up been taken into consideration for the threat of new entrants. Firstly, the expenditure of R&D is too costly, especially for the branded ethical drug drugs. Regarding the pipeline, it takes too great a time for new drugs to perish from discovery to foodstuff, nearly 12 courses. In this situation, the spending on R&D is high due to the long lead times which have something to do with the clinical testing. Furthermore, the emergence spending on R&D and contrariwise the decline of new drugs reaching market indicate that the market yield is falling. Considering the patent protection, one-third of the top 35 molecules (NCEs) testament counter patent expiry by 2004 in which the generics pull up stakes not be against by the regulations. Finally, the spending for pharmacy is controlled by judicatures and their methods vary from each others and sometime argon very inexorable and combined with many approaches. A further obstacle is the government approvals slow down. In the 1990s, the FDA approved 35-45 new compounds a year but in the first nine months of 2001, only 11 were approved (Smith).

Threat of substitute products

As surgery develops, many diseases and illness female genitals be cured through operations instead of victorious pills, which maybe more convenient and, time and money saving.



Moreover, beingness without side effects, surgery has an advantage over drugs. So it seems that it is inessential to be intervened by drugs. However, the threat is low to the industry.

Power of customers

As there are many slipway to get information about drugs, such(prenominal) as TV advertisements and internet, customers have many options and high sensory faculty of price. Furthermore, the convenient transportation and different distributions offer consumers various ways to purchase. For example, they can prefer...

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