porters for indian pharma
TRANSCRIPT
8/7/2019 Porters for Indian Pharma
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Group 10:
Suchit Utekar (59) Mazharkhan Modi (38)
Yogesh Kadge (21) Prem Biyani (07)
Kedar Nirhali (41) Debanjali Roy (49)
Sagar Patil (44)
PrathameshWagh (60)
Nikhil Sonawane (57)1
Pharmaceutical Industry in India - Porter's
Five Forces Strategy Analysis
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Introduction of the Industry
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y A highly organized sector.
y Estimated to be worth $ 4.5 billion, growing at about 8
to 9 percent annually.
y Highly fragmented with more than 20,000 registeredunits.
y Meets around 70% of the country's demand for bulk
drugs, drug intermediates, pharmaceutical
formulations, chemicals, tablets, capsules, orals andinjectables.
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Current Scenario
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y third largest in the world in terms of volume and
14th in terms of value
y total turnover of industry between Sept.08 and
Sept.09 was US$ 21.04 billion.y Of this the domestic market was worth US$ 12.26
billion.
y market is expected to reach between US$ 55 to
US$70 billion in 2020 from US$ 12.6 billion in
2009
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INDUSTRY SEGMENTATION
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Over the Counter Drugs(40%)
Ethical (Prescribed) Drugs(60%)
Brand/Trade NameDrug
Generic Drug
With respect to product
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External Analysis of the industry based on
Porter¶s Five Forces Model
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Industry Competition
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y most competitive industries in the country with as many as
20,000 different players.
y top player in the country has only 6% market share and top
five have 18%.
y high growth prospects.
y High entry barriers.
y fixed cost requirement is low and need for working capital
is high.
y entry barriers to pharmaceutical industry are very low.
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Bargaining Power of Customers
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y End user of the product is different from the influencer.
y Consumer has no choice but to buy what doctor says.
y Buyers are scattered and they as such do not hold much
power in the pricing of the products.
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Bargaining Power of Suppliers
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y Pharma industry depends upon several organic
chemicals.
y The chemical industry are very competitive and
fragmented industry.y Chemicals are largely a commodity.
y Suppliers have very low bargaining power.
y Pharma industry can switch from their suppliers
without incurring a very high cost.
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Threats of New Entrants (Barriers to
Entry)
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y Most easily accessible industries for an entrepreneur in
India.
y Capital requirement for the industry is very low, creating a
regional distribution network is easy.
Difficulties in Implementing:
y Creating brand awareness and franchisee amongst doctors
is the key for long-term survival.
y Quality regulations by the government may put some
hindrance for establishing new manufacturing operations.
y Impending new patent regime will raise the barriers to
entry.
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Threat of Substitutes
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y Demand for pharma products continues and the
industry thrives.
y Key reasons for high competitiveness in the industry is
that as an on going concern.y But the advances made in the field of biotechnology,
can prove to be a threat to the synthetic pharmaceutical
industry.
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ea ng n an p ayers y sa es
million)(TO BE deleted)
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In 2009
1. Cipla
2. Ranbaxy Lab
3. Dr Reddy's Labs4. Sun Pharma
5. Lupin Ltd
6. Aurobindo Pharma
7. Piramal Health8. Cadila Health
9. Matrix Labs
10. Wockhardt
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Leading Indian players by sales (US$ million)
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SWOT Analysis of Pfizer
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STRENGTHS
y R&D innovation with a broad therapeutic coverage
y Marketing strength in major geographical and therapeuticareas
y Existing Patent protection for a number of years on key
products
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Weaknesses
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y Discontinuation of products in the latter stages of
development
y Co-marketing agreements can limit Pfizer's global presence
yIncreased size and operational complexity makes Pfizer a lessagile company
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Opportunities
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y Decreasing development time through favourable R&D
collaborations and internal efforts
y Emergence of integrated global markets and globalisation for
new productsy Co-marketing agreements with companies wishing to
capitalize on Pfizer's marketing
y strengths, providing Pfizer with strong products and
therefore revenue growth
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Threats
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y Increased competition for core products like Viagra as its high
cost encourages use of cheaper alternative treatments
y An increase in the number of safety issues surrounding Viagra
y
Competition from products similar to Pfizer's in R&D thatreach the market close to before Pfizer's products
y The new economic potential of emergent China, Russia and
competition in diverse regional markets.
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SWOT Matrix - Pfizer
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STRENGHTS WEAKNESS
Opportunities � Leveraging the innovation ability in
R&D in development of new drugs
� Strong marketing skills can help in
tapping the newly emerged global
integrated markets
� Ability to keep patent for longer timefor key products helps in sustained
revenue growth
� Strong R&D base could avoid
in discontinuation of products
in latter stages of development
� Tapping the emerging global
integrated markets can help in
overcoming the Non-agilenature of the company.
Threats � Improvement in development time
backed by strong patent holding ability
can help in tackling the competitorsmenace of entering the market early
with same products.
� Decentralization of
management can help in
increasing operationalefficiency making the company
more agile.
� Innovative R&D techniques can
help in decreasing the
competition in core products.
E.g. Viagra.
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Industry Competition
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Bargaining Power of Customers
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Bargaining Power of Customers
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Threats of New Entrants (Barriers to
Entry)
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y Government Policies
y Price Controls Infrastructure
y Counterfeiting of drugs
y Counterfeiting Laboury Tax Structure (DTC)