Porter’S Five Force Model In Pharma Industries

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Porter’S Five Force Model In Pharma Industries

  1. 1. Porter’s Five Force Modelin Pharma Industries<br />25-Nov-09<br />1<br />
  2. 2. Presentation put together by<br />Pradeep Pandey<br />Kamta Prasad <br />DeepikaMishra<br />AakuShrivastava<br />JayantSahu<br />Disha School of Management, Raipur (C.G.)<br />25-Nov-09<br />2<br />
  3. 3. Overview about Pharma Industry<br />Estimated $700 bn in 2007.<br />Growth rate 6% in CAGR.<br />Expected to reach $937 bn in 2012.<br />25-Nov-09<br />3<br />
  4. 4. 25-Nov-09<br />4<br />
  5. 5. Industry Competition<br />Most competitive industries in the country with as many as 10,000 different players.<br />Top player in the country has only 6% market share and top five have 18%.<br />High growth prospects.<br />Very low entry barriers.<br />Fixed cost requirement is low and need for working capital is high.<br />25-Nov-09<br />5<br />
  6. 6. Bargaining Power of Buyers<br />End user of the product is different from the influencer (read Doctor).<br />Consumer has no choice but to buy what doctor says.<br />Buyers are scattered and they as such does not wield much power in the pricing of the products.<br />25-Nov-09<br />6<br />
  7. 7. Bargaining Power of Suppliers<br />Pharma industry depends upon several organic chemicals.<br />Very competitive and fragmented industry.<br />Chemicals are largely a commodity.<br />Suppliers have very low bargaining power.<br />Pharma industry can switch from their suppliers without incurring a very high cost.<br />25-Nov-09<br />7<br />
  8. 8. . Barriers to Entry<br />Most easily accessible industries for an entrepreneur in India.<br />Capital requirement for the industry is very low, creating a regional distribution network is easy.<br />Point of sales is restricted in this industry in India.<br />Creating brand awareness and franchisee amongst doctors is the key for long-term survival.<br />Quality regulations by the government may put some hindrance for establishing new manufacturing operations.<br />Impending new patent regime will raise the barriers to entry.<br />25-Nov-09<br />8<br />
  9. 9. Threat of Substitutes<br />One of the great advantages of the pharma industry.<br />Demand for pharma products continues and the industry thrives.<br />Key reasons for high competitiveness in the industry is that as an on going concern.<br />Key reasons for high competitiveness in the industry is that as an on going concern.<br />25-Nov-09<br />9<br />
  10. 10. Conclusion<br />Industry is not static in nature, it&apos;s dynamic.<br />Larger players in the industry will survive with their proprietary products and strong franchisee.<br />In the Indian context, companies like Cipla, Ranbaxy and Glaxo are likely to be key players.<br />Change in the patent regime, will see new proprietary products coming up, making imitation difficult.<br />Government too will have bigger role to play.<br />25-Nov-09<br />10<br />
  11. 11. THANK YOU<br />25-Nov-09<br />11<br />

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