Lundbeck Korea: Managing an International Growth Engine Harvard Case Solution & Analysis

Lundbeck Korea: Managing an International Growth Engine Case Solution

Lundback is a pharmaceutical company located in Denmark that deals mainly with brain disease. The company is focused on doing massive research in the field of brain disease. The company is not limited to lonely Denmark but it has various other subsidiaries in Africa, Asia, America, and Europe which are working efficiently and had embraced its market presence.

Porter’s Five Forces

The five powers model was created by Michael E. Watchman to help organizations in evaluating the idea of an industry's intensity and to create corporate systems likewise.

Porter's model is a basic yet integral asset for understanding where force lies in a business circumstance. This is valuable, since it assists you with understanding both the strength of your present rivalry.

The five forces recognized in porter’s five forces-model can impact Lundbeck Korea;Managing an international growth engine’s ability to serve its customer and make a profit.

Lundbeck Korea Managing an International Growth Engine ought to apply and focus on their abilities, plan of activities or plans of action to achieve benefits over the business average. This may be done in multiple ways, each distinguished in application to the forces individually as elaborated below:

Figure: Porter’s five forces model

Porter’s Five forces model in regard to Lundback Korea Managing an International Growth Engine

Threat of New Entrants Low
Threat of Substitute Medium
Bargaining power of buyers High to Medium
Bargaining power of suppliers Low to Medium
Competitive rivalry among existing firms High


Threat of New Entrants

The threat of new entrants in the retail industry is LOW because the Canadian consumers tends to buy from Nationally established and well known retailers. Also the high capital investment and switching cost are the other barriers that should be confronted by new entrants.

The Lundbeck Korea Managing an International Growth Engine strive to develop and invest in market to establish a distinct point of differentiation in customer perception. They make sure to invest in Research and development in order to make competitive differentiation's from other companies. They also focus on building economic scale in sales and production.

The threat of substitute products or services

Threat of substitute products means how easily your customers can switch or move to your competitor’s product.

The threat of substitute in the industry is MEDIUM as both public and private labeled brands are substitute of each other depending upon the budgetary limitations of buyer.

The lundbeck Korea Managing an International Growth Engine combat the threat from substitute product by focusing on product quality or maintaining strong consumer relationship.

Bargaining power of buyers

The Bargaining Power of Buyers means, how much control the buyers have to drive down your products price. Buyers have more bargaining power when the product is not differentiated.

The Bargaining power of buyers are HIGH to MEDIUM as the retail industry is also subject to grouping, As the buyers comes in group and larger association so they end up on a bargained supply from suppliers.

Lundbeck Korea Managing an International Growth Engine can focus in altering its item and extending its premium with the end buyers through different advancing techniques, this will fabricate the interest of the item with different buyers.  They should employ economies of scale to manage costs of production. If it offers products at moderate prices to buyers, it will again be able to attract a large number of buyers for its product, and in this way, will be able to break off the high bargaining power.

Bargaining power of suppliers

Bargaining Power of supplier means how strong can seller increases the sales volume by giving a toughcompetition andthe supplier must have the control over increasing the Price of supplies so that it doesn’t necessarily influence the customer’s interest when the cost becomes high. Suppliers are more powerful when they are more organized and concentrated in making the unique product and sell them consistently.

The Bargaining power of supplier in the retail industry is LOW toMEDIUMwhen there are many alternative suppliers because if the suppliers charge a rate higher then consumer may tends to shift towards another alternative.

Lundback Korea Managing an international Growth Engine can deal with this challenge by maintain the consistency in quality and cost.

Competitive rivalry amongst existing firms

Industry rivalry means the intensity of a competition among the existing competitors in the market. The factor of industry rivalry has significant impact on the industry. Rivalry among the existing firm is HIGH because of the large economies of scale generated from consumer bulk purchases. However the revenue generation in the industry I reflected by Penetration, frequency and basket size.

The Lundbeck Korea Managing an international growth combat rivalry forces of the industry by concentrating on research and development to identify market niche, Build a strong and loyal consumer base by focusing on quality and marketing strategies and by capturing new markets..............

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