Strategic Analysis of Pharmaceutical Company

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NATIONAL UNIVERSITY
OF COMPUTER & EMERGING SCIENCES,
ISLAMABAD
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MANAGEMENT

INFORMATION SYSTEM

Final Project
Date: 7 May 2012

Submitted to:

SIR ALI NASIR

Submitted by:

Usman Pervez 09-0001

Imran Shafqat 09-0175

Faheem Alam 09-0211

Muhammad Awais Ashraf09-0278

Section ‘C’

QUESTION NO. 1:

Conduct a Strategic Analysis of Industry and Stakeholder Analysis for MIS under consideration.

STRATEGIC ANALYSIS OF PHARMACEUTICAL COMPANY:

Environmental Analysis:
Technological advancements, tighter regulatory-compliance overheads, rafts of patent expiries and volatile investor confidence have made the modern pharmaceutical industry an increasingly tough and competitive environment. Below is an analysis of the structure of the pharmaceutical industry using the PEST (political, economic, social and technological) model.

Economic Value Added:
In the decade to 2003 the pharmaceutical industry witnessed high value mergers and acquisitions. With a projected stock value growth rate of 10.5% (2003-2010) and Health Care growth rate of 12.5% (2003-2010), the audited value of the global pharmaceutical market is estimated to reach a huge 500 billion dollars by 2004.

Technological Advances:
Modern scientific and technological advances in science are forcing industry players to adapt ever faster to the evolving environments in which they participate. Scientific advancements have also increased the need for increased spending on research and development in order to encourage innovation.

Examples are Pfizer\Pharmacia, Glaxo-Wellcome\SmithKline-Beecham and Novartis (a merger between Sandoz and Ciba-Geigy).

Structural Analysis (Porter’s Five Forces)

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Overall, the pharmaceutical industry shows an upward trend in its core markets. The industry remains highly valued has a favorable market position with strong financial make-up and strong earnings growth. Its future potential demand trend is positive and despite increased competition the industry still shows a continuing upward growth momentum. The 5 forces approach can be used in initial diagnosis and as an aid to strategy development. Its main value is as a thought provoking aid to help arrive at a shared understanding of the threats and opportunities facing the firm. Whilst it is a powerful and simple tool for analysis, it doesn’t look in a great detail about the choices or the ease or difficulty in following a particular course of action. SWOT Analysis

A SWOT analysis identifies and assesses the strengths, weaknesses, opportunities and threats an organization faces. A SWOT analysis of the pharmaceutical industry illustrates to upper management what the industry is excelling in, what improvements need to be made, where growth is possible and what preemptive measures need to be taken to protect shareholder or company value.

Strengths:

The strengths of the pharmaceutical industry’s SWOT analysis document the internal industry components that are providing value, quality goods and services and overall excellence. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s strengths could include low operating overhead, firm fiscal management, low staff turnover, high return on investment (ROI), state-of-the-art laboratory equipment and an experienced research staff.

Weaknesses:

The weaknesses of the pharmaceutical industry’s SWOT analysis document the internal industry components that are not providing significant added value or are in need of improvement. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s weaknesses could include high-risk business modeling, disengaged Board of Directors, dated medical equipment, poor branding, low staff morale or diseconomies of scale....
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