Teva Pharmaceutical Industries
In the mid-1900s Hurvitz and Nachman Saloman began to strive for the consolidation of the fragmented Israeli pharmaceutical industry. Together, they showed private family-owned companies the benefits of mergers and how those produce synergies which later translate to higher profits. By 1968, Hurvitz was able to acquire Teva, and the combined company became the largest pharmaceutical company based in Israel with $28 million in revenues. The combined company adopted the name Teva as well.
Throughout the first forty years of the 20th century, waves of highly skilled (scientists, physicians and engineers) immigrants entered Israel. This lead to Israel’s population consisting of a diverse skill set and overall, being highly educated. In 1945, the Arab league decided to create a boycott against businesses operating in the Jewish portion of Palestine. Without the presence of a large foreign pharmaceutical company operating in Israel and with a populace with a diverse skill set there was room for the birth of a domestic industry. The domestic industry consisted of approximately 20 family-owned pharmaceutical companies. Later, through Hurvitz and Nachman Saloman’s quest for a consolidated Israel pharmaceutical industry, the conglomerate Teva was born.
In the early 1980s, no Israeli pharmaceutical company had any sort of organized strategic planning. Teva had employed Dr. Joseph Aleksandrowicz to lead the strategic planning processes for the company. While most Israeli pharmaceutical companies were focused on competing within Israel, Teva’s management team set their sites on the Western market, and chose to penetrate the US market first.
Teva has dominated pharmacist-driven markets throughout various regions in the world. While maintaining this position I would also lead Teva into physician-driven markets including but not limited to countries Germany and France. Germany and France are expected to have a combined generic market of $13 billion by 2008. These are some of the largest markets globally in both size and potential. Other companies are currently expanding into these regions and Teva must form a presence there as well, because it would be difficult to displace competitors later.
As an executive at Teva Pharmaceuticals, I would consider four options moving forward with this company. The first option would be to further expand into global generics markets. This option would allow the company to continue to benefit from their current resources and infrastructure, in addition to being a low cost strategy with a large potential for growth. The drawbacks are the social, economic, political, and environmental factors that alter as you attempt to create a global reach. The second option is to become a specialized generics firm and focus on product development. This option presents sizable profit margins, it is an underdeveloped