This ppt describes well that how Porter's Five Force Model is used in Pharmaceutical Industris.......

1. Porter’s Five Force Modelin Pharma Industries 25-Nov-09 1

2. Presentation put together by Pradeep Pandey Kamta Prasad DeepikaMishra AakuShrivastava JayantSahu Disha School of Management, Raipur (C.G.) 25-Nov-09 2

3. Overview about Pharma Industry Estimated $700 bn in 2007. Growth rate 6% in CAGR. Expected to reach $937 bn in 2012. 25-Nov-09 3

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5. Industry Competition Most competitive industries in the country with as many as 10,000 different players. Top player in the country has only 6% market share and top five have 18%. High growth prospects. Very low entry barriers. Fixed cost requirement is low and need for working capital is high. 25-Nov-09 5

6. Bargaining Power of Buyers End user of the product is different from the influencer (read Doctor). Consumer has no choice but to buy what doctor says. Buyers are scattered and they as such does not wield much power in the pricing of the products. 25-Nov-09 6

7. Bargaining Power of Suppliers Pharma industry depends upon several organic chemicals. Very competitive and fragmented industry. Chemicals are largely a commodity. Suppliers have very low bargaining power. Pharma industry can switch from their suppliers without incurring a very high cost. 25-Nov-09 7

8. . Barriers to Entry Most easily accessible industries for an entrepreneur in India. Capital requirement for the industry is very low, creating a regional distribution network is easy. Point of sales is restricted in this industry in India. Creating brand awareness and franchisee amongst doctors is the key for long-term survival. Quality regulations by the government may put some hindrance for establishing new manufacturing operations. Impending new patent regime will raise the barriers to entry. 25-Nov-09 8

9. Threat of Substitutes One of the great advantages of the pharma industry. Demand for pharma products continues and the industry thrives. Key reasons for high competitiveness in the industry is that as an on going concern. Key reasons for high competitiveness in the industry is that as an on going concern. 25-Nov-09 9

10. Conclusion Industry is not static in nature, it's dynamic. Larger players in the industry will survive with their proprietary products and strong franchisee. In the Indian context, companies like Cipla, Ranbaxy and Glaxo are likely to be key players. Change in the patent regime, will see new proprietary products coming up, making imitation difficult. Government too will have bigger role to play. 25-Nov-09 10

11. THANK YOU 25-Nov-09 11