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Feedback: Overall An Excellent Job. Well-Researched, Thorough, and Focused
Feedback: Overall An Excellent Job. Well-Researched, Thorough, and Focused
Introduction to Feedback:
Dear Loc,
Thank you for your assignment. This assignment has required that you select an industry that
you feel is the most global, describe it, and explain how competitive and chaotic it is. It
requires that you use valid criteria from outside resources to support your explanations.
Therefore, it should be good practice for future assignments in graduate school because
graduate school papers require that you support your claims with specific information.
Select an industry
Describe industry
Describe competitive environment.
Describe top leaders
Describe global characteristics
Determine if the environment is chaotic
Overall an excellent job. Well-researched, thorough, and focused.
Please look at the comments below and if you wish to meet and discuss your submission over
the phone or by Skype, we can do so during the following hours:
http://www.worldtimebuddy.com/
(type in Minneapolis MN for the CT above and type in
your location for the corresponding time)
REQUIREMENTS FEEDBACK
1
Write a paper about one of those industries
that you believe to be one of the most global
in nature. Include the following:
Select an industry from Bloomberg’s
Good
Industry Market Leaders that you
believe to be one of the most global
in nature.
Provide a brief description of the Good
industry (beyond the one presented
in the Bloomberg source), along with
a brief discussion about the
competitive environment among the
top two to three market leaders in
that industry.
Compose a list of characteristics that Good
makes the industry one of the most
global in nature as compared to
others on the list.
Good
Based on Tetenbaum and Laurence’s
(2011) description and discussion
of chaos, would you describe the
environment of your industry pick as
chaotic? Why or why not?
Grade: 100/100
2
MBA 5102-8
Week 1 Assignment: Examine Industry Market Leaders
LOC X. PHAN
Course Instructor: David Johnson, PhD
12/30/2016
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Introduction Commented [DLJ1]: Good introduction. You explain why
you are writing the paper and introduce the main points you
It is easy to imagine that as technologies progress, all mainstream industries on the planet are going to discuss.
will be global. Examples of mainstream global industries are Consumer Goods & FMGC, the
Internet, Media & Advertising, Sports & Recreation and Technology & Telecommunications
("Popular industries," n.d.). Each of the global industry mentioned has subcategories. For
example, the subcategory within the Consumer Goods & FMGC includes Clothing & Apparel,
Toys, Cosmetics and Personal Care. The mentioned global industries have goods and services
that are straightforward and easy to identify and classify. Certain industries have products and
services that are so complex making it difficult to determine and classify as a global industry.
The Biotech industry is one such industry. A detailed analysis of this industry characteristics
The Biotech industry is continuing to evolve over the centuries. It started when
the process of fermentation was first used to produce alcohols and vinegar. Interests in the
Biotech industry peaked in the 1970’s, when the recombinant DNA, a method of customizing
DNA to carry any desirable genetic traits, was invented ("Recombinant DNA | Summary," n.d.).
This industry is described today as a scientific discipline that utilizes molecular biology
processes of the organism and various cellular components to produce a new technology.
Application of some these technologies produces pharmaceutical products that would enhance all
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aspects of human lives such as curing diseases as well as preventing them. Biotech products and
process application in the agricultural areas such as optimizing food production for human
consumption and improving the environment and the planet on which we all live. Examples of
products produced by the Biotech industry are Penicillin in the very early days, Insulin, human
growth hormones and drugs today that can cure diseases and treat various human health related
conditions. On the agricultural side, genetically modified corn seed that can resist the effect of
insects such as the corn rootworm is an example of a product of the Biotech industry.
Competitive Environment
Buyers and sellers. The operating margin for the Biotech industry is 30.80% meaning Commented [DLJ4]: Good. Discussed valid competitive
industry characteristics
that the environment is not as competitive as other global industries such as the Retail
industry or the Food industry. Although there are 411 Biotech companies and 315
diseases worldwide, all these companies do not compete directly against one another
trying to treat all diseases (Damodaran, 2016). Under normal circumstances, every
business developed a specific set of technologies that will treat very focused few
diseases. The buyers in this market are large Health Maintenance Organizations such as
Kaiser Permanente, hospitals, and insurance companies. The normal consumers do not
Barriers to exit or entry. Threats of a competitor entering the Biotech market is low Commented [DLJ5]: Good. Discussed valid competitive
industry characteristics
because of multiple high barriers to entry. The two barriers are a large initial cash and
time investment before any return on investment may be realized. These two barriers are
due to the regulatory requirements by government agencies such as the FDA and the
EPA. It takes about 15 to 20 years from conception and nearly three billion U.S. dollars
for a Biotech drug to receive approval for marketing in the United States (Patrick, 2015).
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Laws passed by the Congress requiring the manufacturer of pharmaceuticals and medical
products to show safety and efficacy before receiving approval. The level of
requirements depends the product risks to the patients, and the health professionals
exposed to the products. Another barrier to entry is the intellectual property (IP) laws
giving the inventor of the technology exclusive rights to manufacture and to sell the
products for a pre-determined length of time. Owners of these IP’s can license or to sell
their IP’s to any interested parties. IP’s are highly valuable assets and the individual or
the firms will go to great lengths to protect their IP’s from being stolen or copied. The
United States government agency regulating intellectual property is the USPTO (United
Securities laws regulate when and how owners of Biotech industry firms that are publicly
held (stocks traded publicly) can sell their shares of ownership in the company. The
individuals with secret knowledge about firm technology and business matters must not
use such knowledge for personal gains at the expense of the public shareholders. The
SEC (Securities and Exchange Commissions) enforces the laws and regulates the
Homogeneous products. Products from the Biotech industry are both homogeneous and Commented [DLJ6]: Good. Discussed valid competitive
industry characteristics
heterogeneous. Those products that are still protected by intellectual property laws
would have no competition. While still under IP protection, other firms are not allowed
to manufacture or market the same or similar product. The fact that no other companies
produce or market a similar product does not affect operational efficiency. What is
important is the fact that a single product would satisfy all customer requirements across
all the world markets. The manufacturers, in this case, have all the bargaining powers.
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However, those products with expired patent lives are homogeneous across all the
markets. The competitor products getting quicker approvals by regulatory agencies are
the “biosimilar” (generic) products. The manufacturers, in this case, have lower
bargaining power because the goods in these markets are similar to one another.
Top Two Market Leaders in Industry Commented [DLJ7]: Good. Discussed the top two
companies in the industry
For 2016, according to Genetic Engineering & Biotechnology News, the leading two firms in
this industry based on market capitalizations are Amgen and Novo Nordisk (Philippidis, 2016).
California. The firm has a total of seven approved drugs making up their entire product
portfolio. The drugs are for the treatment of the after-effects of cancer treatments.
These are severe and life-threatening side effects making the need for these drugs dire
(McFarlane, 2014).
For 2016 Amgen market capitalization is $127.35B. The operating margin is 43.49%
meaning that there is little to no competition ("Amgen Inc. (AMGN) | EBITDA," n.d.).
Protection from the competition of the Amgen drugs is the result of Amgen’s strong
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html
company produces Biotech drugs to treat diabetes, hemophilia, growth disorders and
obesity. The diabetes drug accounts for the largest portion of the income (McFarlane,
2016). It is ironic that the #1 and #2 money maker products for the company are for the
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For 2016 Novo Nordisk market capitalization is $116.09B. The operating margin is
51.00% (, 2015). The majority of Novo Nordisk drug patent portfolio will not expire
Information technology/communication infrastructure. The Biotech industry Commented [DLJ8]: Good. Discussed valid global
industry characteristics
companies establish and locate facilities at various locations throughout the world to take
advantage of differences in resource availability, the labor force skills and the cost of
labor. For example, the company might locate its manufacturing plant where the real
estate price is the lowest being that they will need a significant space. Regardless, the
various needs must be considered at the same time so that there would be the best
Products/services modification. The drug products that the Biotech industry sells are Commented [DLJ9]: Good. Discussed valid global
industry characteristics
homogenous for biosimilar and generics, but heterogeneous for the drugs still under patent
protection. Regardless, these products meet the requirements of patients throughout the
world market without requiring modifications. The reason is, it is evident that although
general appearance of people and cultures may be different for countries across the world,
biologically there is not any difference between humans that would change the
Economies of scale. The fact that a single product can satisfy a comprehensive set of Commented [DLJ10]: Good. Discussed valid global
industry characteristics
human needs then the economies of scale would significantly improve the profit margin.
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Industry chaos Commented [DLJ11]: Good. Discussed valid industry
chaos characteristics
The Biotech industry is global, and chaotic. At any time, anyone may discover or invent new
technologies so significant that a new order would emerge. The industry is continuously evolving,
and the speed of evolution is increasingly faster because of the continual improvement in the tools
available to the industry. There is so much left to learn about our biology and the biology of
everything else around us. The knowledge pool is increasing with the passing of time and self-
organizing.
Conclusion
As evident by the above discussion, the features that characterize a global industry are the
same as those of the Biotech industry. Thus, the Biotech industry is a global industry. A notable
characteristic of the Biotech, unlike many other popular global industries, is the enormous barriers
to entry and exit. That is, from concept to market takes 15 to 20 years at the cost of $3B which is
very capital intensive and a risky investment; however, human lives and the quality of those lives
are invaluable.
References
on.net/NASDAQ/Company/Amgen-Inc/Valuation/EV-to-EBITDA
Damodaran, A. (2016, January 2). Operating and Net Margins. Retrieved from
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html
http://www.ehow.com/facts_6864353_global-industry-definition.html
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Intellectual property rights. (n.d.). Retrieved from http://www.novonordisk.com/about-novo-
nordisk/novo-nordisk-in-brief/positions/intellectual-property-rights.html
McFarlane, G. (2014, November 5). How Amgen Makes Billions On Just A Few Drugs |
amgen-makes-billions-just-few-drugs.asp
McFarlane, G. (2016, March 7). How Novo Nordisk Makes Money (NVO) | Investopedia.
nordisk-makes-money-nvo.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
https://ycharts.com/companies/NVO/profit_margin
Patrick, M. (2015, July 2). Drug Approval Process in the Biotechnology Industry - Market
biotechnology-industry/
Philippidis, A. (2016, September 26). Top 25 Biotech Companies of 2016 | The Lists | GEN.
2016/77900741
http://www.whatisbiotechnology.org/science/rdna
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