Essay About Teva’S Leadership And Global Generics Market

Teva Pharmaceutical Industries Case Analysis
Teva Pharmaceutical Industries Case AnalysisGroup HBUAD 699Spring, 2016ByAdeola RaimiDamilola LawalAdebowale AbelejeEnoch NyarkohCase BackgroundTeva Pharmaceuticals was an Israeli-based company that was the leader in the global generics market in the pharmaceutical industry. With a passion to grow the business beyond its Israeli geographic market, Teva’s leadership formed strategic partnerships around the world especially in the United States to achieve this expansion ambition. Teaming up with W. R. Grace, Teva gained access to the US generics market, eventually catapulting it to be the market leader with 20% share; and dwarfing all other competitors such as Pfizer, Novartis, and Barr. Unlike its predecessor companies who grew their companies through conglomerates, Teva decided to focus mostly on the generics market, not diversifying from its core functions, but relying heavily on its research and development capabilities gained through its attachment with Israeli research universities.  In an industry fraught with able and fierce rivals, Teva still managed to fill 20% more descriptions than all its competitors. Not only was Teva adept at beating its competitors with number of prescriptions filled, it also expanded and increased its market share through smart acquisitions of rival companies. For instance, the motive for acquiring Ivax was to increase its global presence in the pharmaceutical industry.  Even though Teva was the undisputed leader in the global generics market, with the United States market forming a bigger percentage, Teva was also not without its challenges. Being the cost leader, the main challenge Teva faced was defending its global market share in generics from the other low-cost drug manufacturers from countries such as India. Another significant challenge was that other innovative drug producers in the industry were buying their way into the generics segment of the market through acquiring other generics companies. These were the two key challenges Teva was forced to grapple with. As a result, the company leadership was toying with other alternatives to consolidating the US generics market share or undertaking other product and market development efforts. Problem Statement and Relevant Issues in the CaseThe problem statement identifiable in this case was that Teva, in line with recent changes and fierce competition in the generics and overall pharmaceutical industry, was considering what direction was most suitable to focus its operations in so it could continue to be a powerhouse in the industry as well as protect its growth rate and competitive advantages over industry rivals. The following were some of the issues presented in the case.Teva had to defend its market leadership in the generics segment from other low-cost manufacturers such as companies from India. Given that Teva was considering moving into the innovative segment, how was Teva going to prevent competitors from filing exclusivities once the patents on their innovative drugs expire.What would be the strategic repercussions of diversifying into the innovative drug production given that their core functions and competencies were in generics?Did Teva have the required capital requirements, resources, and human resource capabilities to engage in full-scale innovative drug production and not divert from their built-in advantages with generics?Considering the fact that Teva had some semblance of global presence in Europe and other places, was it still worthwhile for Teva to massively pursue global opportunities?Owning to the fact that Teva’s strategy was cost leadership and moving into innovative drugs would require some form of differentiation, how was Teva going to marshal it resources to compete on both fronts – cost leadership and differentiation. Teva’s Business and Corporate Strategy.