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Pharmaceutical Industry

Report 1

“Delimitation and Characteristics of the Pharmaceutical Industry”

By:

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XXX
14th March 2007

Index

Introduction to the Report 3
Definitions 3
The Pharmaceutical Industry 3
Delimitation of the Industry 4
Characteristics of the Industry 5
Patents 5
Marketing 6
Structure-Conduct-Performance 7
Structure 7
Theory: 7
Case: Pharmaceutical Industry: 8
Conduct 9
Theory: 9
Case: Pharmaceutical Industry 10
Performance 10
Theory: 10
Case: Pharmaceutical Industry 11
Competition 11
Porters Five Force Model 11
Theory 11
Case: Pharmaceutical Industry 13
Final Remarks 14
References 15


Introduction to the Report
This report is the first of a series of three reports for the course Strategy, Design and Market (41085). The reports analyse a chosen industry with the use of theoretical tools, which will be covered throughout the course. This first report introduced the chosen industry in terms of its delimitations, structure, degree of product differentiation, entry barriers, and strategies.

Definitions
To begin with, the theory behind industrial economics will be introduced, so that a background can be set for this analysis. As opposed to organisations, markets use a price system as the co-ordinating device for exchange transactions. In an ideal market, price is the only deciding factor. The governing laws are those of “Demand and Supply”. These state that, “the total demand of a product will go up if the price goes down” and that “the supply will go up as the price goes up”. This is a very simplified form and the reality is much more complex. This is also due to the fact that the real world does not consist of ideal markets. Industrial economics studies the policies which are present within companies in regards to both their actual/potential competitors and their companies. As we will see, this adds a different perspective to the laws of Demand and Supply.

The Pharmaceutical Industry
The...