Answer the following questions on the case study Merck & Co., Inc:
What is the structure of the pharmaceutical business based on Porter’s five forces? Is it a desirable industry? What is your reasoning?
Determine if Merck can obtain and maintain a competitive edge in the pharmaceutical business by analyzing its strengths, weaknesses, opportunities, and threats. What is your reasoning?
Examine Merck’s innovation strategy; is it in need of improvement? What is your reasoning?
Can open innovation help Merck satisfy its customers’ requirements in novel and cost-effective ways that provide value to its shareholders? What is your reasoning?
Overview
We may examine the pharmaceutical industry’s breadth using Porter’s Five Forces. It considers five factors: competitive rivalry, threat of new entrants, threat of replacement products, supplier negotiating power, and consumer bargaining power. ” Competitive rivalry: The pharmaceutical industry is highly fragmented, with nearly 3,000 pharma companies and 10,500 manufacturing units, and this market is highly competitive due to increasing demand for high-quality drugs, a low-to-moderate entry barrier for new entrants, and the presence of a number of large and small firms.”
With more pharmaceuticals coming off-patent, the industry’s growth potential are likely to skyrocket as generic…show more content…
A corporation must have broad governmental permission, license, substantial financial support and investment, an efficient distribution network, and brand patents.
Because of this, the threat posed by a new competitor to established businesses is low to moderate. based on the aforementioned considerations. However, many pharmaceutical businesses are currently making market headway by switching from established new business approaches to classic business approaches. Contract manufacturing, co-marketing alliances, and contract research (drug development and clinical trials) are all parts of the new business strategy.
Many new businesses will be able to enter the market without being burdened by expensive duties like medication production, clinical trials, and research and development. Additionally, one of the factors that is presenting potential for more market access for generic manufacturers at reduced cost is patent expiration. The government has also intensified its efforts to reduce healthcare costs.
