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Literature review on market penetration
Market penetration strategy
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This week’s case study concerning Genzyme’s strategic direction was very interesting in that they essentially pursued a strategy that seemingly was purposely avoided by other players in the pharmaceutical industry (Schilling, N.D.). Their strategy centered on developing prescriptions for rare diseases. Typically “developing a drug takes 10 to 14 years and costs an average of $800 million to perform the research, run the clinical trials, get FDA approval, and bring a drug to market,” and in turn it is normally intuitive, from an economic standpoint, to attempt to develop drugs that will have a substantial market so to be able to assure enough revenue is generated to produce a significant profit. In turn, drugs marketed towards treating …show more content…
Furthermore, as was the case with developing Ceredase, Genzyme chose to produce such drugs that were substantially difficult to produce in the first place. In turn they benefited from an increased barrier to entry. Additionally, being mindful of their profit margins and ownership and full discretion over their strategic direction, Genzyme initially refused to engage in licensing deals with large pharmaceutical companies who at the time could have significantly reduced the marketing/distribution burdens that Genzyme would inevitably encounter as a newer and smaller company. Instead, Genzyme, in an effort to produce the necessary revenues to fund the research, “entered into a number of side ventures including a chemical supplies business, a genetic counseling business, and a diagnostic testing …show more content…
However, as proven by Genzyme’s roadmap to selling for $20 billion, it was clear that innovative approaches had to continually be pursued and considered. It was not enough to simply identify and enter this niche market, Genzyme also had to innovate the way a biotech firm would position itself within the market by not teaming up with larger pharmaceutical companies early on and by pursuing alternative means to obtain the necessary funds to finance their research and development costs, which was done by generating revenues though side
In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies.
The Guiding Principles that drives strategic planning strengthens the organization’s ability to implement a system that is solution and priorities oriented. The strategic initiative taken by the organization towards its strategic planning has brought people of diverse disciplines together to address short-term and long-term issues that hinder its future success. The organization has a vision of identifying breakthroughs and implications of biotechnology. It is also in the plan of expanding The Rose Project, a program that caters for breast cancer screening and Cancer
At first glance it is noticed that these companies are very different. Beginning with the fact that they are members of two different industries. () Genentech is biotechnology and pharmaceutical company that has an annual revenue of 16.3 billion dollars. The company’s primary function is to research and develop medications that save lives. (0)Genentech has approximately 12900 U.S. employs and 11 locations. The company was founded in 1976, has been on the Fortune 100 list 17 times. It currently ranks number nine on the list.
When people think of pharmaceutical companies, they instantly associate the word pharmaceutical with medicine. There are scientists solely dedicated to find the remedy to cancer and incurable diseases. These professionals have devoted their educated lives to help the ailing human population recover.
Faboil Ltd has evolved into a relatively successful organisation in the biotechnology field. The success of the company and its paternal approach was adopted by Dr Alfred Brownlow. Dr Brownlow has led from the front in terms of developing the product range for Faboil Ltd. Richard Cranberry (Director of Biotechnology) has driven very hard to maintain the success of the company, although the organisation lag behind in terms of modus operandi technology. At present, the monopoly position of Faboil Ltd has slowly eroded away and faces two competitors. The major causes are that the new products have failed to live up to market expectations and it is at a backward stage only holding a 20% market share. This report will find the causes of issues in the company and give ideas and resolutions on how to fix the problem.
Nucleon is a small biotechnology start-up with a very promising potential product (CRP-1), which is also the first product that Nucleon is planning to go into the clinic market. Nucleon has reached to human clinical trials phase with its product and it has no manufacturing facilities that satisfy the guidelines for these clinical trials and testing. Nucleon is on the verge of making a critical choice of manufacturing strategy, which will affect Nucleon’s survival in the intense competition in the long haul. Nucleon management is aware of the facts that they have a limited budget to start with, the financial environment in biotechnology is rapidly changing and establishing the safety and efficacy of products like CRP-1 is complex, time-consuming and expensive; that’s why they want to evaluate risks and rewards of each manufacturing strategy before making their final decision.
...s: each was licensed to a much larger firm because the originator firm lacked the capability to market the drug. the larger analysis of blockbuster drugs showed that this thread is common across blockbusters that originated with smaller firms. The largest firms appear to hold a significant advantage in commercialization—they are highly effective at extracting the value of innovative drugs . The study suggests some qualified reasons for skepticism that the end of the blockbuster era will bring a major upheaval in the industry. Large firms’ advantage in commercialization suggests that they may maintain their dominant position. Marketing of pharmaceuticals may move from broad-based to targeted approaches, but a company with a broad reach may still have an advantage in identifying markets for niche drugs and commercializing the drugs within those more narrow market
In 2000, Rich Kender, Vice President of Financial Evaluation and Analysis at Merck & Company was discussing the opportunity of investing in licensing, manufacturing and marketing of Davanrik, a drug originally developed to treat depression by LAB Pharmaceuticals. LAB proposed to sell the right of all the future profit made from the successful launch of Davanrik at the cost of an initial fee, royalty payments and additional payments as the drug completed each stage of the approval process. Merck & Company's organizational goal is to constantly refresh it's company's drug development portfolio and reach as many customers as possible during the patented time. So there was not only the potential of financial gain or quantitative aspect of the offer, but also the qualitative value which will be added by getting better positioning in the risky pharmaceuticals industry.
23andme is a company in the biotechnology industry that started in April of 2006 by founders Linda Avey, Paul Cusenza, and Anne Wojcicki. Linda Avey is a biologist and co founder of Curious, Inc, which designs and builds IOS, Android, web, client and embedded systems for a variety of clients. She has a BA at Augustana University as well as 20 years of experience in sales and business development in biopharmaceuticals. Anne Wojcicki is an entrepreneur that began her career as a healthcare consultant at Passport Capital. Paul Cusenza has served as the Chairman and CEO of Nodal Exchange LLC, Senior VP of marketing and alliance management at Perlegen Sciences, Inc.
Over the past decade, scientists have made significant advancements in the treatment of certain diseases. Unfortunately, just like any new product, the cost of developing these new technologies and treatments is extremely high. Plus, unlike other technology, heath technolo...
When a drug does make it to market and is successful, companies need to make up for the money spent in development as well as the cost of drugs which did not make it to market. After all investments are taken care of, there is still the need for profit. Some are concerned that if the United States government implements control over prescription drug costs, then private firms will be less motivated to invest in pharmaceutical development, fearing they will not make their investment back. This would supply pharmaceutical companies with less finances for the research and development process. According to the information collected by Abbott and Vernon, a drop in the price of pharmaceuticals would result in significant loss in investment in research and development (Abbott and Vernon).
There is an increasing pressure within pharmaceutical markets to reduce prices in line with medical budgets, as well as maintaining patent expirations. Being a global brand means disturbance in the operations when the market fluctuates. There is an internal weakness in the pharmaceutical industry, which includes theft and counterfeiting of drugs, and therefore is a weakness of Johnson & Johnson. While Johnson & Johnson has these specified weaknesses they deal with, there are even more opportunities which gives them an advantage for strengthening their position in the market. They already have the strength of meeting a broader range of customer needs with their products falling under three categories. Expiring patents on brand name drugs lead to an increase in the sales of generic drugs, Johnson & Johnson could capitalize upon this opportunity. With diagnostic markets growing, this positions the company in a good place as well as new medical therapies and findings that align with some of the company’s primary capabilities. Threats the company faces is with product recalls, extreme competition in pharmaceuticals that results usually in the first to enter is generally where success is determined. With technology developments, biotech concepts might possibly move the traditional pharmaceutical methods out of the
Accounting for 35 percent of the global market, the United States has the largest pharmaceutical industry in the world (“Pharmaceutical and Biotech...”). Direct-to-consumer drug commercialization is one of the main contributing factors of this high percentage. In 2015, the United States $395 billion pharmaceutical corporation spent $5.2 billion on
Drug innovation and development is expensive and only a small percentage of discovered compounds beco...