6. Overview of Industry Value Chain: Consumer Health Products Cotton, Plastics, Chemicals, etc. Retailers: Pharmacies, Drug Stores, Supermarkets Wholesalers Consumers Incumbent Firms engage in R&D and Mfg to produce consumer health products and OTC pharmaceuticals NOTE: Incumbent firms compete fiercely for retailer shelf space! Market size: $480B Breanne Hayes, April 2008 MBA, Graziadio School of Business and Management Pepperdine University
7. Industry Analysis Industry Supply Chain Biotech Companies Hospitals / Pharmacies (39%) Patients (Consumers) Drug Wholesalers (61%) $52 billion market $67 billion market Raw materials, Lab equipment, Chemicals FDA Payers (Insurance) Physicians (Customers) Legend Value = Product Value = Knowledge Regulators/Gatekeepers Elizabeth Passeretti April 2008 MBA Candidate Graziadio School of Business and Management,Pepperdine University
8. The industry supply chain- what is the value added by each player in the chain Raw material Supplier Customer Manufacturer Distributor/Wholesaler Retailer
10. Value created and captured by each member in the value chain Adapted from: http://faculty.msb.edu/homak/HomaHelpSite/WebHelp/HomaHelp.htm Suppliers Manufacturers Distributors Retailers Consumers ROI Asset Intensity Profitability Value Added
11. The concept of PIE- Potential Industry Earnings Manufacturer has the biggest “pie” Retailer has the biggest “pie”
12. Oil & Gas Industry: Historical gas prices at the pump
14. How big is the industry “PIE” and how is it split? Small pie Big pie Why ?
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16. Nappies 11-13? Industry Supply Chain -raw material to customer How much Value is added by each member of the supply chain Concept of Industry PIE -How is the PIE split -How big is the PIE-- what determines the size?