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The Global Pharmaceutical industry: swallowing a bitter pill case study - Essay Example

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The Five Forces Framework of Porter defines the forces that usually affect the performance of firms worldwide. The above framework promotes the idea that all organizations are expected to face at least one of these forces in their daily operations. …
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The Global Pharmaceutical industry: swallowing a bitter pill case study
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Download file to see previous pages At this point the following fact should be highlighted: the Five – Forces Framework is not applicable only on firms operating in industries with specific characteristics; it can be also used for the evaluation of a whole market, as in the case of China (Festel 2005). Indeed, up to the late 1980s the Chinese pharmaceutical industry was quite weak, not being able to support effectively the national economy, nor to respond to the needs of people across the country (Festel 2005). The use of the Five Forces Framework for analyzing the Chinese industry has helped Chinese managers to identify the weakness of the particular market and promotes plans for their elimination. The Five Forces Framework refers to a series of factors that influence the environment of each organization. However, the potentials of an organization to control its factors are not rejected (Frey 2005). In fact, it seems that each firm is able to change the conditions in its environment, more or less; such initiative would result to the enhancement of the organizational performance but only under the term that the organization involved could respond to the demands of such plan (Frey 2005). Particular emphasis should be given on the management of change within the particular organization. If managers are proved to be unable to promote change across their department, then the organization’s plans for influencing its environment would fail. In other words, the Five Forces Framework can support the efforts of an organization to influence its environment, but the success of such initiative would require the high support of the members of the organization, i.e. the employees (Frey 2005). Organizational environment can be changed, using the Five...
The challenges that firms in the pharmaceutical industry have to face are many; the need for high amounts for supporting appropriate R& D schemes is just an example of the specific problem. For this reason , the industry analysis, using the Five Forces Framework, would be necessary for firms in this industry, as it could help to control their exposure to market risks.
The Five Forces Framework offer, in a quite short period of time, a clear image of rivals’ position and potentials; it is for this reason that the Industry-life-cycle analysis could not be used as an alternative for firms that are not effectively supported through the Porter’s Five Forces framework.
Parent companies should also have the right to monitor closely their sub-companies activities; however, their interference in the operations of sub-companies should be carefully planned, taking into consideration the issues developed above.
Under these terms, it could be noted that alliances would not be considered as ethical for promoting competitiveness. Rather an appropriate competitive strategy would be chosen; the development of industry analysis using the Five Forces model, as analysed above, could increase the chances for success of the relevant plans. ...Download file to see next pagesRead More
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