Pharma Porter Model Final

7/24/2019 Pharma Porter Model Final

1/11

Porters FiveForces Analysis

of - INDIANPHARMACEUTICA

L INDUSTRS!"#itte$ %y

&ro!'-(Me#"ers)Pankaj BhattAnurag SarkarAshish GandotraChopalli SaiJyothi


2/11

The Indian pharmaceuticals market is third largest in terms of volume

and thirteen largest in terms of value

India is the largest provider of generic drugs globally with the Indian

generics accounting for 20 per cent of global exports in terms of volume

The countrys pharmaceuticals industry is expected to account for

about 3.!3."# of the global pharma industry by value

$argest %xporter in &eneric 'rugs

(ontributed 2.")# to the India*s &'+

In$!stry

*vervie+


3/11

In$ian P,ar#ace!tical in$!stry is e'ecte$ to e'an$ ata CA&R of ./01( 'er cent to US2 // "illion "y (3(3

In$ia is e'ecte$ to ran4 a#on5st t,e to' t,ree',ar#ace!tical #ar4ets in ter#s of incre#ental 5ro+t,"y (3(3

In$ias cost of 'ro$!ction is si5ni6cantly lo+er t,ant,at of t,e USA an$ al#ost ,alf of t,at of E!ro'e

A s4ille$ +or4force as +ell as ,i5, #ana5erial an$tec,nical co#'etence

Contin!o!s s!''ort fro# &overn#ent

Attractiveness of

In$!stry


4/11

Porters Five

Forces


5/11

%arriers to

EntryLess invest#ent in 6e$ assetsEcono#ies of Scale

%ran$ E7!ity

Hi5, 8or4in5 Ca'ital

Hi5, c,ances of fail!re in case of re9ection of $r!5 "y

re5!latory "o$y

Creatin5 %ran$ A+areness an$ franc,isee a#on5st

$octors for lon5 ter# s!rvival

Access to Distri"!tion

Learnin5 C!rve A$vanta5es

&overn#ent PoliciesModerate Barriers


6/11

According to ICICI

Lombard and India Todayreports

En$ !ser of t,e 'ro$!ctis $i:erent fro# t,ein;!encer

Cons!#er ,as noc,oice "!t to "!y +,at$octor says

In so#e cases< can

s+itc, to s!"stit!tes

&ovt0 'oliciescontri"!te for so#e$r!5s =Price Ceilin5>

%!yers

Po+er


7/11

Mo$erate 'o+er in in;!encin5 t,e 'rice

T,ey can re$!ce t,e 7!ality of t,e c,e#icals

T,ey can even +it,,ol$ s!''ly

May not ,ave ,i5, s+itc,in5 costs in #ost sit!ations

S!''liers #ay 5o for for+ar$ inte5ration =*rc,i$ C,e#icals ?Stri$es S,as,!n C,e#icals>

Di@c!lt to s+itc, s!''liers =For life savin5 $r!5s>

Moderate bargaining power

S!''liers

Po+er


8/11

Do#inance esta"lis,e$ "y t,e lar5e ca' co#'anies

C!t t,roat co#'etition

Pro$!ct $i:erentiation an$ 'atents

Hi5,ly fra5#ente$

Consistently re$!ce 'ro6ta"ility $!e to reverse en5ineerin5 of$r!5s "y co#'etitors

Ra'i$ Ac7!isitions an$ Mer5ers "y eistin5 6r#s to e'an$ #ar4ets,are

=Stri$es Arcola" ac7!irin5 S,as,!n P,ar#ace!ticals>

=L!'in P,ar#ace!ticals ac7!irin5 &avis P,ar#ace!ticals< a US6r#>

Rivalry a#on5

Co#'etitors


9/11

Substitutes that are available inIndia:

Ay!rve$a

Ho#eo'at,y

!ar4s an$ Talis#ans

%iotec,nolo5y- Ste# Cell Researc,

o5a

T,reat of

S!"stit!tes


10/11

Availa"ility of S!"stit!tes Ayurveda, homeopathy, yogahave a good stronghold.

Price val!e of s!"stit!tes Cheaper than allopathy.

Price elasticity of in$!stry

$e#an$

Relatively inelastic.

For instance, in drugs used orchronic conditions, patients otenorm loyalties to one particulargeneric because o tablet shapeor color.Also, in drugs used or some lie

threatening condition may haveno other perect substitute or thepatients to choose.

Availa"ility of co#'le#ents !ther pharma drugs,biotechnology "may becomesubstitutes in the uture#

Price val!es of co#'le#ents $ery e%pensiveT,reat fro# s!"stit!tes #o$erate0

T,reat of S!"stit!tes

cont$0


11/11

Concl!sio

nP,ar#ace!tical in$!stry in In$ia ,as enor#o!s'otential of 5ro+t,0

In or$er to enter an$ s!rvive in t,is in$!stry

t,e co#'any enterin5 s,o!l$ o:er a$i:erentiate$ 'ro$!ct or a t,era'y

A ne+ 6r# s,o!l$ t,in4 t+ice as t,e in$!stry isla"o!r intensive an$ ca'ital intensive

T,ere is a 'ossi"ility of ,i5, initial invest#entassociate$ +it, it +,ic, ten$s to $isco!ra5ene+ co#'anies to enter into t,e #ar4et

T,ere is also ,i5, ris4 an$ ,i5, c,ances offail!re if $r!5 is not a''rove$ "y re5!latory"o$ies

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Pharma Porter Model Final