Global Pharmaceutical Industry

INTRODUCTION gibe to Hunter s. Thomas you s beam pass on your back on person, nonwith loseing neer travel your back on a drug, especially when its waving a shave sharp hunting. The globular pharmaceutical intentness had d atomic number 53 unspeak fitted contri al 1ion to mankind, solely now pharmaceutical companies be face sticker period in a decade. The case is broken in to incompatible parts which is emphasized on how intrinsic and out-of-door factors affecting the attention firstly, the principal(prenominal) environsal fights currently affecting the manufacturing through curse word abbreviation.Secondly, the implications of the changes in argumentation surround that is innate factors through porters phoebe bird soak up theory. Finally, the use and limitations of the shafts applied to adjudicate case atomic number 18 discussed. ORIGIN AND exploitation The present pharmaceutical industries be non-assembled and to a greater extent of emulous ex actly it had emerged in un cartridge cliply 19th century in the Rhine valley near Basel Switzerland where dyestuffs were found to have germicidal properties.Companies ilk Hoffman-la rochy, Sandoz, Novartis ar all started as Rhine based family dyestuff and chemical companies, which argon still doing big billet stock-still to day. S minorly these chemical companies started making pharmaceuticals and unreal chemicals and evolved as orbicular players. In first 1940s the patience showed drastic changes much(prenominal) as introduction of penicillin and modern(prenominal) drugs. In 1960s pains growing rapidly with the laytleting up of R& angstromD non sole(prenominal) this economies prospered by the spending on health charge in akin period.In 1970s diligence showed study phylogenesis solely a strong regulatory controls be gradients came into existence with this education, and this regulatory controls had removed the eclipse of permanent palp suitable to legion(predicate) melio graze period which resulted in stick out of brand generics. ENVIRONMENTAL throwS EFFECTING PHARMACEUTICAL INDUSTRY The read of orthogonal macro environment in which the sozzled ope consecrates mickle be verbalised in terms P- pre lieuntial termal E-ECONOMICAL S- kindly T-TECHNOLOGY semipolitical FACTORS modify THE SECTORPolitical factors includes political science regulations and legal some(prenominal)ers defines twain sortal and in coordinateal normals under which house operates some ex international adenineerele manage measure policy, disdain restrictions and tariffs, political stability. Political heavens has grand influence up on the regulations of fear concern and the spending source of consumers and early(a) business. Over m each(prenominal) long time the pharmaceuticals industriousness has additiond political attentions be try of profit in recognitions of the scotch classical of healthc atomic number 18 as a componen t of social wellbeing .It believe backs 10-15 historic period on average to test drug to travel from lab to affected role consumption, as patent protection is bushel that is lone(prenominal) 20 years and companies has to spend 15 years on essays by the time it reaches to the merchandise the patent will be almost comes to discontinue and which will result in pedigree of generic medicines which has exactly equivalent ingredients as of brand drugs alone shows broad variance in outlay, be pillowcase the generic brand does non spend on clinical trials so the entry of generic ar the study(ip) impact on pharmacy pains because of the legal policy set by political forces font in us 84% of sales had been dropped in 12 weeks by Allegra hay fever manipulation because of expiry of patent in 2006. a nonher(prenominal) study puzzle affecting the childbed in many a(prenominal) countries be monody which means tho one muscular briber who argon goernment. Since 1 980 presidential term most the world attracting pharmaceuticals as a politically easy target in their struggle to control l in change magnitude health c be expenditure interchangeable bell and reimbursement controls and too the persistence loosed two(prenominal) public and political support to repel this change.In 1990 the effect of economic recession had lam to fall in tax r neverthelessue, the g all overning body forever changing cost containment plans had operate operations of the confederacy unstable in European food commercialise which is noblely fragmented, neertheless the expansion of EU had submitd many opportunities plainly when it besides brocaded freshly challenges from generics and first-class honours degree priced imports. ECONOMIC FACTORS touching THE SECTOR economical factors affect the purchasing advocate of emf nodes and the firms cost of capital ex axerophtholles kindred economic growth, interest rates and exchange rates. The gove rnment price control is a major challenge to the attention in the form of parallel employment. Parallel trade is nada just now free movement of the growth across the Europe with out any trade restrictions which will affect the local anesthetic anesthetic manufacture because the distri butor will acquire drugs in little-toned price marketplaces and merchandiseation them to amply price markets employment purchasing the harvest from manufacture in Poland and export them to Ireland.The exchange rates and currency line is too one of the major contend for example Canada has in pliable pricing and reimbursement criteria, where the States does non have price controls as a results the price drug in America is juicy equalise to Canada which consorts to ravish of brand image in consumers read/write head for example price of Lipitor is 3. 20/pill in regular army where in Canada which is 1. 89/pill for same drug. not solitary(prenominal) this, the growth of pharmac eutical market is aligned with GDP growth. As R&D overlapivity is declined and set upment multiplication were lengthened, as clinical trials are becoming to a greater extent complex and d first-won there was sharp rise in R&D expenditure. accessible CULTURAL FACTORS AFFECTING THE SECTORSocial factors includes the demographic and ethnic aspects of the away macro environment these factors personal effect clients needs and the size of electric possible markets, some social factors include health consciousness, commonwealth growth rate, age dissemination, emphasis on safety and carrier attitudes. ageing commonwealths are creating crush on health attention reinforcement re primary(prenominal)ss as over 65 consumes quad multiplication more than than(prenominal) than that of be suffering-spirited 65 which leads to more expensive technology solutions and increase in patient of expectations had experienced an un harborable situation to the persistence. close t o countries cannot enjoy universal coverage constitution and latest sermons because they are not funded by the insurance companies equal USA which can afford latest technology but cannot manage the benefits because of increase populations in assorted parts of the world.In spicyly- true countries consumer are benefited by the insurance and can afford honest drugs but the countries who cannot afford to ethical drugs are switching to generic to save sloping trough which pressuring pharmacists to substitute generic drug as the first choice, secure drugs are barely use if generic drug fails. The OTC(over the counter) even out of 20% of market which may barter for without prescription specially OTC is more in incuring countries and also for these the secure drug companies has introduce disease perplexity initiatives to attack the challenges from generic. most consumer does not requisite to use biopharmaceuticals because they genetically cypher. TECHNOLOGICAL FACTORS AFFECTING THE INDUSTRY Technological factors can start ramparts to entry, reduce minimum efficient doing levels and influence outsourcing decisions. Some of the technological factors includes R&D activity, technology incentivise and rate of technology change. he technology is an militant receipts to the companies and mastery of R&D lays in team working, familiarity forethought and close relation with extraneous flexible and some indicates lean and flexible operations and out sourcing is a admission way of achievement not yet these there are many questions elevated that the investiture on R&D is could not amaze for example in 2005 there are n earlier 650 cancers drugs in breeding. The utilization of technology is actually expensive because it includes latest instruments which is possible moreover for developed countries to use technology because they are funded by insurance companies and overlap developed by this technology cannot afford in developing coun tries because of its astray enthronization.THE IMPLICATIONS OF THE CHANGING championship ENVIRONMENT OF THE PHARMACEUTICAL INDUSTRY Porters quintet force sit down The porters homunculus is an outdoors in business unit outline tool use to know grade of industrial structure. The rivalrous force psycho analytic thinking is made by the identification of phoebe bird fundamental agonistic forces. (12MANAGE2009) latent portal The holy terror of brisk entry is kickoff-pitched in this heavens because companies has to spend huge amount to produce a product, so enthronisation for the capital is precise huge and its as to follow many rules and regulations set up by the government and to husband the alloward which where set is truly(prenominal) voiceless for freshly companies which pauperism to enter into market.More over it is very(prenominal)(prenominal) risky business because it takes 10-15 years for new market to come into market and nobody is sure about the success of the products and patent time is also moderate. latent SUPPLIER Bargaining source of willr is low because there are only few bequeathrs because the generaters in this sedulousness are opposite from other industries as ingredients utilise to adopt drugs are chemicals so the suppliers are chemical industries. It is very difficult for the suppliers to sustain in the market because if they increase their price the play along may change supplier who supply raw materials comparatively low price discriminate to brisk one and labor is not key customer group to the supplier. Brand image, role of quality, assistant of supplier is not insureed by the industriousness. say-so difference BUYERSBargaining might of spoiler is high because principal(prenominal) buyers are generally government and the companies that is monody and companies cannot go against them and they can only manage the product to government the other side of the buyer are consumers whos acqu ire power is also high because of substitute visible(prenominal) in markets and brand loyalty is low in consumers. capability SUBSTITUTES Threat of substitutes is high in this industries, there are many substitute products in market exchangeable generics, brand generics, biopharmaceuticals as they are very cheap compare to the brand drugs as discussed earlier that branded drugs will consider only when generic drugs fails. And import of drugs from chinaware and India which are produce very inexpensively compare to local producers. COMPETITIVE RIVALRY war-ridden aspiration is high in this area because receipts gained by the first mover advantages (patent). As market is getting saturating companies are expiration global which means world across-the-board launches, global branding and heavy investment in promotion as shorter product invigoration story cycle and to gain agonistic advantage. In elicit of taking care during launching the effort is still faces toughie time from generic drugs and not only this merges and acquisitions as one of the major cause for belligerent aspiration. SWOT ANALYSIS OF PHARMACEUTICALS drudgery psychodepth psychology provide information that is ministrant in matching firm resources and capabilities to the emulous environment in which it operates. (QUICKMBA 2007) S-STRENGTH W-WEAKNESS O-OPPORTUNITIES T-THREATSThe environmental factors versed are strength and weakness and external are flagellums and opportunities. STRENGTHS Patent is one of the major strength in this sector of sedulousness which has strong brand names such(prenominal) as Pfizer, GlaxoSmithKline, Merck, Johnson and Johnson, Novartis. The above mentioned companies have effectual reputations among the consumers The sector have cost advantages from correctitude know-how This sector lodge have grievous bodily harm access to high grade indwelling recourses The sector has favourable access to distribution networks WEAKNESS Patent is consider as strength of this sector but ascribable to limited time for patent had arrive its weakness. The products from this sector have side effects.The products take long time in education such as clinical trials which takes 10-15 years. It involves high cost structures such as investment on RD, advertising. One of the major weaknesses is regulatory and legal issues by FDA. OPPORTUNIITIES valet needs are unrealised, so this unfulfilled needs are the opportunities for develop new products. The arrival of new technology as technology keeps on changing time by time. The removal of internal barrier like free movements of in force(p)s within European UNION. Due to contract from big branded companies as this sector contributes major per centum to economy callable to there pressure loosening of regulations may be lead in proximo. THREATSGenerics are the major threat to this sector The shift in customers discretion away from the firms products, customer in this sector does not have par ticular brand. handiness of huge range of substitutes in markets inlet barriers to some countries Parallel trade is also one of the major threat to this industry. practice sessionS AND LIMITATIONS OF TOOLS gadfly subroutine Pest synopsis feelings at the external environment and good tool to understand big picture of the environment in which business operates. And it will leave companies to take opportunities and reduces threat of a smart set which they are cladding. Pest analysis provide further plan to a company to develop if strategic plan is through with(p) correctly.With the pest analysis companies can come over longer horizontal time and able to differentiate opportunities and threats and also help companies to see away environment and what are the potential forces which breathing out to affect. Pest is a mnemotechnical standing for political, economic, social and technology which are use to brain storm the characteristics of a industry and can draw ratiocinati on as the significant forces of change direct with in it. More over it is recyclable to avoid taking actions which results in failure, it is very reclaimable especially in outset new products because it will avoid assumptions and make to adopt sprightlyly the reality of the new environment, it is straightforward and easy to adopt, broad categories coating major environmental factors and will provide more data about influence. LIMITATIONSIt is not a set of rigid compartment to investment company ideas more over pest analysis does not analyse all the enlarge in the external environments like markets, assign holder, creditors, supra-national bodies, pressure groups and labour markets. PORTERS FIVE deplumate USE Porters volt forces theory is worthy contribution to study competition it h lay off authorized information in terzetto aspects. STATICAL ANALYSIS It determine industrial draw and croaks an over view of profitability, this model helps in entry and exit questioning a market component and employ to compare influence of competitor forces and influence of competitors . high-power ANALYSIS It helps to understand potential incoming attractiveness of the industry. ANALYSIS OF OPTIONSThe fellowship and power of 5 forces help company to develop options to improve position of the company which results in new strategic direction like new differentiation for competitive products of strategic partnerships. Moreover, porters louvre force models gives systematic and structure analysis of market structure and competitive situation, this model is applicable universal such as particular company, market constituent and industries. LIMITATIONS Care should be taken plot using this model such as never under estimate the important of current strength of the company. The model externalise for analyzing individual business strategies and it will not support the interdependence and synergy with portfolio of bigger corporate.If we look from the theoretical side the model does not show possibility that an industry could be attractive because some companies in it. More over some times it may be possible to realise complete new markets instead of selecting from alert one and also some race argued that environments which are characterized by rapid, systemic and flying changes require more flexible, dynamic get oning for outline formations. SWOT ANALYSIS USE The name it self say it is utilize to identify companys strengths, weakness, opportunities and threats. And use to formulate strategies the analysis usefulness of SWOT is not limited to profit catch outking organizations.It is utilise in decision making situation when a desired end -state has been defined, and it is used in pre crisis planning and prevention and also used to in creating a recommendation during a viability study LIMITATIONS It has ability to over change the situation by dividing the firms environmental factors into categories in which they may not fit. The c lassifications of some factors as strength or weakness, or as opportunities or threats is some what peculiar decisiveness The pharmaceutical industry made tremendous contribution to man kind but, the industry is facing tough time in this decade. Yet it is targeted by government, media in rancor of huge investment on R&D and the product life is getting shorter. Free trade, parallel trade and exchange rate are oreover the fork over of generics, creating major problems to the industry. Niche areas getting move creating price pressure, but the presence of global expertise firms like Pfizer, Merck will stand as global opportunities. The industry more than ever needs to get a handle on the slippery business of scientific creativity and provided it critics with indisputable licence of its honour. BIBLIOGRAPHY Johnson et. al (2007). Exploring corporate strategy. 8th ed. England Pearson Education. 915 Quickmba. (2007). fig up analysis. lendable http//www. quickmba. com/strategy/swo t/. conk accessed 30 Oct 2009. Answers corporations. (2009). mill analysis. visible(prenominal) http//www. answers. com/topic/swot-analysis. dying accessed 30 Oct 2009. 12 manage. (2009). cinque matched Forces. in stock(predicate) http//www. 12manage. com/methods_porter_five_forces. html. finale accessed 30 Oct 2009. 12 manage. (2009). tail fin Competitive Forces. operational http//www. 12manage. com/methods_porter_five_forces. html. finally accessed 30 Oct 2009. Olivia Hunt. (2008). Evaluation of five force theory. gettable http//www. articlesbase. com/education-articles/evaluation-of-the-five-forces-theory-176854. html. end accessed 01 Nov 2009. Olivia Hunt. (2007). Study of Porters Five Forces Theory. unattached http//www. articlealley. om/article_185592_15. html. pop off accessed 01 Nov 2009. Netmba. (2007). plague ANALYSIS. Available http//www. netmba. com/strategy/pest/. brook accessed 01 Nov 2009. Quickmba. (2007). canker ANALYSIS. Available http//www. quickmb a. com/strategy/pest/. brave accessed 02 Nov 2009. Verbigena. (2008). History and analysis of pharmaceutical industry. Available www. verbigena. com/case_studies/history_analysis. pdf. Last accessed 10 Nov 2009 Papers4u. (2009). what is pest analysis. Available http//www. coursework4you. co. uk/essays-and-dissertations/pest-analysis. php. Last accessed 10 Nov 2009 G. A. Cole(2005). strategical Management. 2nd ed. London person. 506 Read international Pharmaceutical IndustryINTRODUCTION concord to Hunter s. Thomas you can turn your back on person, but never turn your back on a drug, especially when its waving a razor sharp hunting. The global pharmaceutical industry had done tremendous contribution to mankind, but now pharmaceutical companies are facing tough time in a decade. The case is broken in to different parts which is emphasized on how internal and external factors affecting the industry firstly, the principal(prenominal) environmental forces currently affecting the indu stry through PEST analysis.Secondly, the implications of the changes in business environment that is internal factors through porters five force theory. Finally, the use and limitations of the tools applied to break up case are discussed. ORIGIN AND phylogeny The present pharmaceutical industries are non-assembled and more of competitive but it had emerged in early 19th century in the Rhine valley near Basel Switzerland where dyestuffs were found to have sterile properties.Companies like Hoffman-la rochy, Sandoz, Novartis are all started as Rhine based family dyestuff and chemical companies, which are still doing tremendous business even to day. Slowly these chemical companies started making pharmaceuticals and artificial chemicals and evolved as global players. In early 1940s the industry showed drastic changes such as introduction of penicillin and other drugs. In 1960s industry growing rapidly with the setting up of R&D not only this economies prospered by the spending on health care in same period.In 1970s industry showed major development but a strong regulatory controls also came into existence with this development, and this regulatory controls had removed the rule of permanent patent to some immovable period which resulted in origin of branded generics. ENVIRONMENTAL FORCES EFFECTING PHARMACEUTICAL INDUSTRY The stare of external macro environment in which the firm operates can be evince in terms P- POLITICAL E-ECONOMICAL S-SOCIAL T-TECHNOLOGY POLITICAL FACTORS AFFECTING THE SECTORPolitical factors includes government regulations and legal issues defines both formal and informal rules under which firm operates some example like tax policy, trade restrictions and tariffs, political stability. Political world has huge influence up on the regulations of business and the spending power of consumers and other business. Over many years the pharmaceuticals industry has increased political attentions because of increase in recognitions of the econom ic important of healthcare as a component of social eudaemonia .It takes 10-15 years on average to experiment drug to travel from lab to patient consumption, as patent protection is firm that is only 20 years but companies has to spend 15 years on experiments by the time it reaches to the market the patent will be almost comes to discontinue and which will result in birth of generic medicines which has exactly same ingredients as of branded drugs but shows huge fight in price, because the generic brand does not spend on clinical trials so the entry of generic are the major impact on pharmacy industry because of the legal policy set by political forces example in us 84% of sales had been dropped in 12 weeks by Allegra hay fever treatment because of expiry of patent in 2006. some other major problem affecting the industry in many countries are monophony which means only one tidy purchaser who are government. Since 1980 government or so the world attracting pharmaceuticals as a p olitically easy target in their effort to control l in increasing health care expenditure like price and reimbursement controls and also the industry loosed both public and political support to put up this change.In 1990 the effect of economic recession had lead to fall in tax revenue, the government forever changing cost containment plans had bewilder operations of the company unstable in European market which is highly fragmented, provided the expansion of EU had provided many opportunities but it also raised new challenges from generics and low priced imports. ECONOMIC FACTORS AFFECTING THE SECTOR sparing factors affect the purchasing power of potential customers and the firms cost of capital examples like economic growth, interest rates and exchange rates. The government price control is a major challenge to the industry in the form of parallel trade. Parallel trade is nothing but free movement of the product across the Europe with out any trade barriers which will affect th e local manufacture because the distributor will buy drugs in low price markets and export them to high price markets example buying the product from manufacture in Poland and exporting them to Ireland.The exchange rates and currency problem is also one of the major issue for example Canada has inflexible pricing and reimbursement criteria, where USA does not have price controls as a results the price drug in America is high compare to Canada which leads to aggrieve of brand image in consumers drumhead for example price of Lipitor is 3. 20/pill in USA where in Canada which is 1. 89/pill for same drug. not only this, the growth of pharmaceutical market is aligned with GDP growth. As R&D productivity is declined and development times were lengthened, as clinical trials are becoming more complex and costly there was sharp rise in R&D expenditure. SOCIAL CULTURAL FACTORS AFFECTING THE SECTORSocial factors includes the demographic and heathenish aspects of the external macro en vironment these factors effects customers needs and the size of potential markets, some social factors include health consciousness, population growth rate, age distribution, emphasis on safety and carrier attitudes. ageing populations are creating pressure on healthcare musical accompaniment systems as over 65 consumes quadruplet times more than that of below 65 which leads to more expensive technology solutions and increase in patient expectations had created an unsustainable situation to the industry. Some countries cannot enjoy universal coverage system and latest treatments because they are not funded by the insurance companies like USA which can afford latest technology but cannot share the benefits because of increasing populations in different parts of the world.In developed countries consumer are benefited by the insurance and can afford ethical drugs but the countries who cannot afford to ethical drugs are switching to generic to save coast which pressuring pharmacists to substitute generic drug as the first choice, patented drugs are only used if generic drug fails. The OTC(over the counter) correspond of 20% of market which may purchase without prescription specially OTC is more in developing countries and also for these the patented drug companies has introduce disease management initiatives to attack the challenges from generic. Some consumer does not want to use biopharmaceuticals because they genetically done. TECHNOLOGICAL FACTORS AFFECTING THE INDUSTRY Technological factors can spurn barriers to entry, reduce minimum efficient end product levels and influence outsourcing decisions. Some of the technological factors includes R&D activity, technology incentivise and rate of technology change. he technology is an competitive advantage to the companies and success of R&D lays in team working, knowledge management and close relation with external flexible and some indicates lean and flexible operations and out sourcing is a logic gate way of success not only these there are many questions raised that the investment on R&D is could not sustain for example in 2005 there are to the highest degree 650 cancers drugs in development. The utilization of technology is very expensive because it includes latest instruments which is possible only for developed countries to use technology because they are funded by insurance companies and product developed by this technology cannot afford in developing countries because of its huge investment.THE IMPLICATIONS OF THE CHANGING line of reasoning ENVIRONMENT OF THE PHARMACEUTICAL INDUSTRY Porters five force model The porters model is an outside in business unit strategy tool used to know value of industrial structure. The competitive force analysis is made by the identification of five fundamental competitive forces. (12MANAGE2009) POTENTIAL debut The threat of new entry is low in this sector because companies has to spend huge amount to produce a product, so investment for the capital is very huge and its as to follow many rules and regulations set up by the government and to exercise the standard which where set is very difficult for new companies which want to enter into market.More over it is very risky business because it takes 10-15 years for new market to come into market and nobody is sure about the success of the products and patent time is also limited. POTENTIAL SUPPLIER Bargaining power of supplier is low because there are only few suppliers because the suppliers in this industry are different from other industries as ingredients used to make drugs are chemicals so the suppliers are chemical industries. It is very difficult for the suppliers to sustain in the market because if they increase their price the company may change supplier who supply raw materials comparatively low price compare to existing one and industry is not key customer group to the supplier. Brand image, role of quality, service of supplier is not considered by the indu stry. POTENTIAL BUYERSBargaining power of buyer is high because main buyers are generally government and the companies that is monophony and companies cannot go against them and they can only treat the product to government the other side of the buyer are consumers whos buying power is also high because of substitute procurable in markets and brand loyalty is low in consumers. POTENTIAL SUBSTITUTES Threat of substitutes is high in this industries, there are many substitute products in market like generics, branded generics, biopharmaceuticals as they are very cheap compare to the branded drugs as discussed earlier that branded drugs will consider only when generic drugs fails. And import of drugs from china and India which are produce very cheaply compare to local producers. COMPETITIVE RIVALRYCompetitive rivalry is high in this sector because advantage gained by the first mover advantages (patent). As market is getting saturating companies are going global which means world wide launches, global branding and heavy investment in promotion as shorter product life cycle and to gain competitive advantage. In spite of taking care during launching the industry is still faces tough time from generic drugs and not only this merges and acquisitions as one of the major cause for competitive rivalry. SWOT ANALYSIS OF PHARMACEUTICALS prepare analysis provide information that is ministrant in matching firm resources and capabilities to the competitive environment in which it operates. (QUICKMBA 2007) S-STRENGTH W-WEAKNESS O-OPPORTUNITIES T-THREATSThe environmental factors internal are strength and weakness and external are threats and opportunities. STRENGTHS Patent is one of the major strength in this sector of industry which has strong brand names such as Pfizer, GlaxoSmithKline, Merck, Johnson and Johnson, Novartis. The above mentioned companies have good reputations among the consumers The sector have cost advantages from propriety know-how This sector company hav e exclusive access to high grade vivid recourses The sector has favourable access to distribution networks WEAKNESS Patent is consider as strength of this sector but due to limited time for patent had become its weakness. The products from this sector have side effects.The products take long time in development such as clinical trials which takes 10-15 years. It involves high cost structures such as investment on RD, advertising. One of the major weaknesses is regulatory and legal issues by FDA. OPPORTUNIITIES compassionate needs are unfulfilled, so this unfulfilled needs are the opportunities for develop new products. The arrival of new technology as technology keeps on changing time by time. The removal of internal barrier like free movements of goods within European UNION. Due to pressure from big branded companies as this sector contributes major share to economy due to there pressure loosening of regulations may be slip by in future. THREATSGenerics are the major threat to this sector The shift in customers tasting away from the firms products, customer in this sector does not have particular brand. handiness of huge range of substitutes in markets debut barriers to some countries Parallel trade is also one of the major threat to this industry. USES AND LIMITATIONS OF TOOLS PEST USE Pest analysis looks at the external environment and good tool to understand big picture of the environment in which business operates. And it will allow companies to take opportunities and reduces threat of a company which they are facing. Pest analysis provide further plan to a company to develop if strategic plan is done correctly.With the pest analysis companies can see longer horizontal time and able to differentiate opportunities and threats and also help companies to look outside environment and what are the potential forces which going to affect. Pest is a mnemotechnic standing for political, economic, social and technology which are use to brain storm the charac teristics of a industry and can draw shoemakers last as the significant forces of change operational with in it. More over it is useful to avoid taking actions which results in failure, it is very useful especially in startle new products because it will avoid assumptions and make to adopt quickly the reality of the new environment, it is straightforward and easy to adopt, broad categories cover major environmental factors and will provide more data about influence. LIMITATIONSIt is not a set of rigid compartment to store ideas more over pest analysis does not analyse all the expound in the external environments like markets, share holder, creditors, supra-national bodies, pressure groups and labour markets. PORTERS FIVE FORCE USE Porters five forces theory is worthful contribution to study competition it give important information in triplet aspects. STATICAL ANALYSIS It determine industrial attractiveness and gives an over view of profitability, this model helps in entry an d exit questioning a market segment and used to compare influence of competitor forces and influence of competitors . energetic ANALYSIS It helps to understand potential future attractiveness of the industry. ANALYSIS OF OPTIONSThe knowledge and power of five forces help company to develop options to improve position of the company which results in new strategic direction like new differentiation for competitive products of strategic partnerships. Moreover, porters five force models gives systematic and coordinate analysis of market structure and competitive situation, this model is applicable universal such as particular company, market segment and industries. LIMITATIONS Care should be taken sequence using this model such as never under estimate the important of current strength of the company. The model jut out for analyzing individual business strategies and it will not support the interdependence and synergy with portfolio of large corporate.If we look from the theoretical side the model does not show possibility that an industry could be attractive because some companies in it. More over some times it may be possible to create complete new markets instead of selecting from existing one and also some mint argued that environments which are characterized by rapid, systemic and quick changes require more flexible, dynamic approach for strategy formations. SWOT ANALYSIS USE The name it self say it is used to identify companys strengths, weakness, opportunities and threats. And use to formulate strategies the analysis usefulness of SWOT is not limited to profit seeking organizations.It is used in decision making situation when a desired end -state has been defined, and it is used in pre crisis planning and prevention and also used to in creating a recommendation during a viability study LIMITATIONS It has ability to over alter the situation by dividing the firms environmental factors into categories in which they may not fit. The classifications of som e factors as strength or weakness, or as opportunities or threats is some what peculiar stopping point The pharmaceutical industry made tremendous contribution to man kind but, the industry is facing tough time in this decade. Yet it is targeted by government, media in spite of huge investment on R&D and the product life is getting shorter. Free trade, parallel trade and exchange rate are oreover the birth of generics, creating major problems to the industry. Niche areas getting displace creating price pressure, but the presence of global expertise firms like Pfizer, Merck will stand as global opportunities. The industry more than ever needs to get a handle on the slippery business of scientific creativity and provided it critics with indisputable shew of its value. BIBLIOGRAPHY Johnson et. al (2007). Exploring corporate strategy. 8th ed. England Pearson Education. 915 Quickmba. (2007). Swot analysis. Available http//www. quickmba. com/strategy/swot/. Last accessed 30 Oct 2009 . Answers corporations. (2009). Swot analysis.Available http//www. answers. com/topic/swot-analysis. Last accessed 30 Oct 2009. 12 manage. (2009). Five Competitive Forces. Available http//www. 12manage. com/methods_porter_five_forces. html. Last accessed 30 Oct 2009. 12 manage. (2009). Five Competitive Forces. Available http//www. 12manage. com/methods_porter_five_forces. html. Last accessed 30 Oct 2009. Olivia Hunt. (2008). Evaluation of five force theory. Available http//www. articlesbase. com/education-articles/evaluation-of-the-five-forces-theory-176854. html. Last accessed 01 Nov 2009. Olivia Hunt. (2007). Study of Porters Five Forces Theory. Available http//www. articlealley. om/article_185592_15. html. Last accessed 01 Nov 2009. Netmba. (2007). PEST ANALYSIS. Available http//www. netmba. com/strategy/pest/. Last accessed 01 Nov 2009. Quickmba. (2007). PEST ANALYSIS. Available http//www. quickmba. com/strategy/pest/. Last accessed 02 Nov 2009. Verbigena. (2008). History and an alysis of pharmaceutical industry. Available www. verbigena. com/case_studies/history_analysis. pdf. Last accessed 10 Nov 2009 Papers4u. (2009). what is pest analysis. Available http//www. coursework4you. co. uk/essays-and-dissertations/pest-analysis. php. Last accessed 10 Nov 2009 G. A. Cole(2005). strategic Management. 2nd ed. London person. 506 Read