Nucleon: The Pharmaceutical Industry
Introduction
Nucleon, a small biotechnology start-up company is in the process of human trials for their first potential product, i.e., CRP-1. Nucleon has to decide among several alternatives on producing CRP-1 for their long-term survival in the intensively competitive and high-stakes drug industry.
Industry Analysis -Porter’s Five Forces
The Pharmaceutical industry has several high entry barriers as shown in figure 1. Economies of scale, product differentiation, government policy and capital requirements and financial services are few barriers for new entrant. Level of threat from rivalry is also high in this industry. Industry has presence of large number of small firms of a similar size. They are in direct competition with one another, …show more content…
Product Design: Product design is a valuable, rare and organized to exploit its full potential; however it is still imitable as issues with patenting always exists. This puts the company with temporary competitive advantage. Research and Development: The Company’s research and development is an important resource and capability, as it is the company’s core competency. At present it is both valuable and rare, however, again it is imitable, and not yet organized to fully exploit it, thereby providing the company with only parity in terms of competitive advantage. Human Resource: The Company’s human resources are valuable, rare, inimitable and fully exploited. It has a strong team with very good skill and know-how hence puts the company in sustained competitive advantage. Innovation: The Company’s innovation provides it with the most competitive advantage through the fulfilment of all the requirements for sustained competitive …show more content…
This clearly signifies that Nucleon is less vertically integrated. Nucleon has finished the pre-clinical trial with positive results and they are ready to perform clinical trial on human. It is now trying to accomplish more stages of value chain by forward vertical integration. Now as Nucleon is ready to perform clinical trial on human, nucleon has to consider different manufacturing options. It has to choose the right decision whether to vertically integrate or not vertically integrate to sustain in short run and to last in long term business in highly competitive pharmaceutical
Nucleon, a small biotechnology start-up company is in the process of human trials for their first potential product, i.e., CRP-1. Nucleon has to decide among several alternatives on producing CRP-1 for their long-term survival in the intensively competitive and high-stakes drug industry.
Industry Analysis -Porter’s Five Forces
The Pharmaceutical industry has several high entry barriers as shown in figure 1. Economies of scale, product differentiation, government policy and capital requirements and financial services are few barriers for new entrant. Level of threat from rivalry is also high in this industry. Industry has presence of large number of small firms of a similar size. They are in direct competition with one another, …show more content…
Product Design: Product design is a valuable, rare and organized to exploit its full potential; however it is still imitable as issues with patenting always exists. This puts the company with temporary competitive advantage. Research and Development: The Company’s research and development is an important resource and capability, as it is the company’s core competency. At present it is both valuable and rare, however, again it is imitable, and not yet organized to fully exploit it, thereby providing the company with only parity in terms of competitive advantage. Human Resource: The Company’s human resources are valuable, rare, inimitable and fully exploited. It has a strong team with very good skill and know-how hence puts the company in sustained competitive advantage. Innovation: The Company’s innovation provides it with the most competitive advantage through the fulfilment of all the requirements for sustained competitive …show more content…
This clearly signifies that Nucleon is less vertically integrated. Nucleon has finished the pre-clinical trial with positive results and they are ready to perform clinical trial on human. It is now trying to accomplish more stages of value chain by forward vertical integration. Now as Nucleon is ready to perform clinical trial on human, nucleon has to consider different manufacturing options. It has to choose the right decision whether to vertically integrate or not vertically integrate to sustain in short run and to last in long term business in highly competitive pharmaceutical