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eli-lilly-1224553816749782-9

eli-lilly-1224553816749782-9

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Published by: darlingbangaru on Apr 21, 2011
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09/27/2013

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Five forces

Moderate
y Threat of Oligopsony ± minimal Large number of buyers yPatented drugs ± Strong Differentiation ± buyer power is weak y Generic Drugs ± Differentiation decreased - buyer power is strong y Many countries -Govt fix price, Dictate which one to cover copayment

Very Strong
y Major players in pharma market is large MNCs with high fixed costs & exit costs tends to intensify rivalry y High development cost, presence of competing drugs, absence of switching costs promote fierce competition y Need to invest heavily on sales & marketing to survive

Strong
y Supplier supplies on contractual agreements ± High switching costs y Therapeutic agents require novel APIs ± supplier charge fortune y Large Pharma¶s have investment in chemical industry± self sufficiency y Diversity of chemicals necessitates APIs / High skill level (Synthetic / bio)

Strong
y For a given medical condition , there are often several alternatives available y Generic drugs provides easy substitutes y Alternative medical therapies are also becoming increasing y popular

Weak
‡ The development costs R&D ± Prod is very high ($ 500 MN - $ 800 MN) ‡ Rigorous process needs expertise ± extremely risky ‡ Pproprietary knowledge & patents protect copying ‡ Only possibility is manufacturing under licence / generic drugs 21 April 2011
1

Avian flu.PEST Political ‡ Most talked subject in US & Europe today economic importance of healthcare as a component of social welfare ‡ Political interest due to increasing social and financial burden on health care ‡ Stringent FDA requirement / delays Social & Environmental ‡ Good health is an important personal and social requirement ‡ Impact of epidemics such as AIDS. SARS etc. US accounts for over 50% ‡ Euro appreciation against USD ‡ Consolidation through high value M&As ‡ Slowdown in economy / Stagnant market ‡ Increased competition . ± attracted media attention ‡ Increased media attention resulted in better governance-Industry-society Technological ‡ Advanced technology forcing industry to adapt to the evolving environment ‡ Scientific advancements have also increased the need for increased spending on R&D to encourage innovation 21 April 2011 2 Economic ‡ Globalization ..Nine geographic markets account for 80% of sales.

Europe & in U. It had R & D facilities in 9 countries including North America. Middle East.S.S. are less attractive with socialist governments and price controls ‡ Various Legal suits in the courts 21 April 2011 3 .S. withholding of research to the public or false advertising ‡ Eli Lilly tend to avail only fragmented shares of the market which decreases its chances of attaining top position within the industry.S. Opportunities ‡ Trends of globalization ‡ Aging of worldwide population ‡ Longer life expectancy ‡ Opening of new markets SWOT ‡ U. South America. market offering great growth potential ‡ Increased demand from Third World nation experiencing rising standards of living ‡ Merge agreement with Sepracor Weaknesses ‡ Unfavorable exchange rates in overseas sales ‡ Decline of sales of anti-infective due to strong competition from generics in the U. China. Threats ‡ Expiration of Prozac patent ‡ Emergence of Generic Drugs ‡ Market outside U. and overseas ‡ Eli Lilly has sometimes been accused of pushing products to the marketplace with bad research.Strengths ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Success of their anti-depressant Prozac Many Strategic Alliances Patent protection of company¶s products Heavily involved in Alliances to perform research Top 10 contender in the Pharmaceutical Industry 1st pharmaceutical firm to market a genetically engineered drug the Humulin Pharmaceutical products are widely distributed in 200 dependent wholesale outlets in U. Europe.S. and Japan It had manufacturing facilities in 20 countries including locations in Australia.

21 April 2011 4 .

increase research capabilities and seize economies of scale. WEAKNESS-THREATS ‡Find creative ways to extend patent protection and differentiate it from those of competitors by creating a brand name and customer loyalty. ‡Use cooperation joint ventures & alliance3s to lower down costs of R&D expenditures. STRENGTHS-THREATS ‡Find innovative ways to extend patent on Prozac through marketing it in other forms.Reccomandations STRENGTHS-OPPORTUNITIES ‡Eli Lilly & Company should join strategic alliance to develop and market a blood substitute product on its ethical products. 21 April 2011 5 . ‡Identify and develop treatments for future wide spread maladies. ‡Make research on the pricing policy in other markets around the globe to make wise market entry decisions. WEAKNESS-OPPORTUNITIES ‡Consider joint ventures and alliances with generic-producing pharmaceutical to protect earnings from patent losses. thereby protecting future profits. ‡Offer wide spectrums of products ‡Make research in other therapeutic benefits from a previously marketed drug.

21 April 2011 6 .

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