Porter Analysis for Pharmaceutical Industry in Palestine Essay example

1932 Words Feb 8th, 2015 8 Pages
Birzeit University |
Strategic Management |
Porter’s Analysis: Pharmaceutical Industry |
Submitted to Dr. Grace Khoury |
By: Asem Masri. Student No. 1125420 |
11/6/2014 |

1.
Contents
Introduction 1
Porter’s Five Forces Analysis 1
Threat of new entrants 1
Rivalry among existing firms 2
Threat of substitute products 2
Bargaining power of buyers 3
Bargaining power of suppliers 4
Relative Power of other stakeholders 4
Conclusion 5
References 5

Introduction
The pharmaceutical industry in Palestine is one of the most profitable industries, with the Palestinian companies owning 55% and 30% market share of the private and public sectors respectively, and high potential of growth even more, in a market
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2. Capital requirements: The pharmaceutical industry in general requires substantial financial investment in machinery, facilities, R&D, distribution and human resources. The financial investment requirements in facilities was 3.9 million US dollars as of 2005. For example, total assets of Al-Quds pharmaceutical industry is 24.9 million dinars, while for Birzeit Pharmaceutical Co, it is 18 million dinars.
3. Access to distribution channels: The Palestinian pharmaceutical companies usually establish preferred arrangements with pharmacies, hospitals, medical centers and doctors. This will make it very hard for a new entrant to compete or break such arrangements.
4. Political situation: The Israeli government put limitations and regulations on importing pharmaceuticals and chemicals from foreign pharmaceutical companies, to enforce buying from its own pharmaceutical companies rather than importing from the outside.
5. Government Policies: The government requires that the pharmaceutical company meets quality and procedural standards, and that they must acquire a license and register all their products at the ministry of health which is most of the times a costly and lengthy process. The ministry of health also regulate and audit the companies,…

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