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Porter¶s Five Force Model

in Pharma Industries
 Presentation put together by

R Pradeep Pandey
R Kamta Prasad
R Deepika Mishra
R Aaku Shrivastava
R Jayant Sahu
± Disha School of Management, Raipur (C.G.)

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 áverview about Pharma
Industry
R Estimated $700 bn in 2007.
R Growth rate 6% in CAGR.
R Expected to reach $937 bn in 2012.

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 Industry Competition

R Most competitive industries in the country

with as many as 10,000 different players.
R Top player in the country has only 6%
market share and top five have 18%.
R High growth prospects.
R Very low entry barriers.
R Fixed cost requirement is low and need for
working capital is high.
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R End user of the product is different from the

influencer (read Doctor).
R Consumer has no choice but to buy what
doctor says.
R Buyers are scattered and they as such does
not wield much power in the pricing of the
products.

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R Pharma industry depends upon several

organic chemicals.
R Very competitive and fragmented industry.
R Chemicals are largely a commodity.
R Suppliers have very low bargaining power.
R Pharma industry can switch from their
suppliers without incurring a very high cost.

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R Most easily accessible industries for an entrepreneur in

India.
R Capital requirement for the industry is very low, creating a
regional distribution network is easy.
R Point of sales is restricted in this industry in India.
R Creating brand awareness and franchisee amongst doctors
is the key for long-term survival.
R Quality regulations by the government may put some
hindrance for establishing new manufacturing operations.
R Impending new patent regime will raise the barriers to
entry.
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R áne of the great advantages of the pharma

industry.
R Demand for pharma products continues and
the industry thrives.
R Key reasons for high competitiveness in the
industry is that as an on going concern.
R Key reasons for high competitiveness in the
industry is that as an on going concern.
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R Industry is not static in nature, it's dynamic.

R Larger players in the industry will survive with
their proprietary products and strong franchisee.
R In the Indian context, companies like Cipla,
Ranbaxy and Glaxo are likely to be key players.
R Change in the patent regime, will see new
proprietary products coming up, making imitation
difficult.
R Government too will have bigger role to play.

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 THANK Yá

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