Biotech Inuustiy - Foices Nouel

Beepu - 9
Ebin - 9
Factois affecting iivaliy among
existing competitois
Character|zat|on
(Current)
Iuture 1rend
uegree of seller concenLraLlon PlCP PlCP
8aLe of lndusLry growLh MCuL8A1L (1012) PlCP (1318)
uegree of producL dlfferenLlaLlon
among sellers
PlCP PlCP
Can flrms ad[usL prlces qulckly? nC nC
Large and / or lnfrequenL sales order vA8lLS vA8lLS
SLrengLh of exlL barrlers vL8? PlCP vL8? PlCP
Factois affecting the thieat of entiy
Character|zat|on
(Current)
Iuture 1rend
SlgnlflcanL economles of scale MCuL8A1L PlCP
lmporLance of repuLaLlon or esLabllshed
brand loyalLles ln purchase declslons
vL8? PlCP vL8? PlCP
LnLranLs access Lo dlsLrlbuLlon channels MCuL8A1L
(PlCP MA8Cln)
PlCP
LnLranLs access Lo Lechnology/know
how
LCW MCuL8A1L
LnLranLs access Lo raw maLerlals MCuL8A1L
(PlCP 8lCL)
PlCP
LnLranLs access Lo favorable locaLlons MCuL8A1L MCuL8A1L
Character|zat|on
(Current)
Iuture 1rend
CovernmenL proLecLlon of lncumbenLs MCuL8A1L MCuL8A1L
Factois affecting oi ieflecting
piessuie fiom substitute piouucts
Character|zat|on
(Current)
Iuture 1rend
AvallablllLy of close subsLlLuLes LCW LCW
rlce value characLerlsLlcs of subsLlLuLes LCW LCW
rlce elasLlclLy of lndusLry demand LCW MCuL8A1L
Factois affecting oi ieflecting powei
of input supplieis
Character|zat|on
(Current)
Iuture 1rend
ls suppller lndusLry more concenLraLed
Lhan lndusLry lL sells Lo
LCW MCuL8A1L
uo flrms ln lndusLry purchase relaLlvely
small volumes?
MCuL8A1L MCuL8A1L
lew subsLlLuLes for suppllers lnpuL LCW MCuL8A1L
uo flrms ln lndusLry make relaLlonshlp
speclflc lnvesLmenLs Lo supporL
LransacLlons wlLh speclflc suppllers?
MCuL8A1L PlCP
uo suppllers pose credlble LhreaL of
forward lnLegraLlon ln Lo Lhe producL
markeL
MCuL8A1L PlCP
Factois affecting oi ieflecting powei
of buyeis
Character|zat|on
(Current)
Iuture 1rend
ls buyers lndusLry more concenLraLed
Lhan lndusLry lL purchases from?
MCuL8A1L PlCP
uo buyers purchase ln large volumes? PlCP PlCP
Can buyers flnd subsLlLuLes for
lndusLry's producL?
LCW MCuL8A1L
uo buyers pose credlble LhreaL of
backward lnLegraLlon?
MCuL8A1L PlCP
Are prlces ln Lhe markeL negoLlaLed
beLween buyers and sellers on each
lndlvldual LransacLlons?
MCuL8A1L PlCP
Character|zat|on
(Current)
Iuture 1rend
Low ModeraLe Plgh Low ModeraLe Plgh
ls buyers lndusLry more concenLraLed
Lhan lndusLry lL purchases from?

uo buyers purchase ln large volumes?
Can buyers flnd subsLlLuLes for
lndusLry's producL?

uo buyers pose credlble LhreaL of
backward lnLegraLlon?

Are prlces ln Lhe markeL negoLlaLed
beLween buyers and sellers on each
lndlvldual LransacLlons?

Foices Nouel
1hreats of New Lntrants
ecause Lhe bloLech lndusLry ls fllled wlLh loLs of small
companles Lrylng Lo hlL Lhe [ackpoL Lhe barrlers Lo enLer
Lhls lndusLry are enough Lo scare away all buL Lhe serlous
companles loLech flrms requlre huge amounLs of fundlng
Lo flnance Lhelr large 8u budgeLs Pavlng ample cash ls
one of Lhe blggesL barrlers so when lnLeresL raLes are low
or Lhe equlLy markeLs are recepLlve Lo lnlLlal publlc
offerlngs Lhe barrlers are lower SpeclallzaLlon also creaLes
barrlers lor lnsLance knowledge abouL cancer and hearL
dlsease ls qulLe hlgh whereas a company focuslng on
someLhlng more obscure would llkely have a low LhreaL of
new enLranLs because Lhere are very few experLs ln Lhls
fleld
Foices Nouel
9ower of Supp||ers
loLech companles are unlque because mosL of Lhelr value
ls drlven by lnLellecLual properLy 1he naLure of Lhelr
buslness does noL force Lhem unllke oLher lndusLrles Lo
rely on suppllers SclenLlflc Lools maLerlals compuLers and
LesLlng equlpmenL ls hlghly speclallzed buL Lhe llkellhood of
Lhese companles lnvadlng on Lhelr llne of buslness ls noL
very hlgh Cne snag ls LhaL markeLlng alllances have ofLen
proved Lo be problemaLlc Small bloLech flrms donL have
Lhe dlsLrlbuLlon capablllLles Lo Lhelr new drugs so Lhey are
forced Lo llcense Lhelr drugs Lo oLher suppllers
Foices Nouel
9ower of 8uyers
1he bargalnlng power of cusLomers has dlfferenL levels ln Lhe
bloLech arena lor example a company LhaL sells pharmaceuLlcal
drugs has Lhousands of lndlvldual cusLomers and doesnL need Lo
worry Loo much abouL a buyer revolL AfLer all when ls Lhe lasL
Llme you were able Lo bargaln wlLh Lhe pharmaclsL for a beLLer
deal? Cn Lhe oLher slde are Lhe bloLech flrms whlch sell hlghly
speclallzed producLs Lo governmenLs and hosplLals 1hese large
organlzaLlons have a loL more bargalnlng power wlLh bloLech
companles
Foices Nouel
a||ab|||ty of Subst|tutes
1he LhreaL of subsLlLuLes ln Lhe bloLechnology fleld agaln really
depends on Lhe area Whlle paLenL proLecLlon mlghL sLop Lhe
LhreaL of alLernaLlve drugs and chemlcals for a perlod of Llme
evenLually Lhere wlll be a company LhaL can produce a slmllar
producL aL a cheaper prlce Cenerlc drugs for lnsLance are a
problem a company LhaL spends mllllons of dollars on Lhe
creaLlon of a new drug musL sell lL aL a hlgh prlce Lo recoup Lhe
8u cosLs buL Lhen along comes a generlc drug maker whlch
slmply coples Lhe formula and sells lL for a fracLlon of Lhe cosL
1hls ls a blg problem ln forelgn counLrles where Lhere ls a lack of
governmenL conLrol CrganlzaLlons wlll lllegally produce paLenL
proLecLed drugs and sell Lhem aL much lower prlces
Foices Nouel
Compet|t|e k|a|ry
1here are more Lhan 100 bloLech companles operaLlng ln lndla
WlLh Lhe Lop 1 of Lhese companles maklng up a ma[orlLy of Lhe
revenue lLs a Lough lndusLry ln whlch Lo make a mark 1he flghL
Lo see who can cure a dlsease or condlLlon has researchers
worklng day and nlghL 1rade secreLs are also exLremely valuable
ln shorL Lhe rlvalry ls exLremely lnLense