Essay About Attractive Industry And Pharmaceutical Industry

An Attractive Industry – Pharmaceutical Industry
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MGT B399F Exercise (1) Guide
MGT B399F
Industry Analysis (5 Forces Model)：
An attractive Industry – Pharmaceutical
industry
Bargaining Power of Suppliers*
Bargaining Power of Consumers*
Threats of New Entrants*
Intensity of Rivalry*
Threats of Substitutes*
1. Expensive set-up cost for an effective sales force to persuade doctors or hospital authority to adopt new kind of drugs or medicine
2. Huge costs for developing new drugs
THREE different types of buyers: Doctors, Patients, Government. They are ALL generally price insensitive.
High Entry Barrier, Hard to Enter
Costs of ingredients are generally LOW
Usually NO, or HARD to find, substitute found,
1. Competition is gentle;
2. DONT compete on price; bcoz i) buyers are price insensitive; ii) brand image is hard to be eroded.
Conclusion: ALL these forces are favorable!  The industry is attractive!eneral environment
Technological change
Demographic trends
Cultural trends
Economic climate
Legal and political conditions
Specific international events