SWOT & PORTER Harvard Case Solution & Analysis

Bargaining power of buyers is low

The bargaining power of buyer in this industry is low because they have approximately same competitors available in the form of other pharmaceutical companies as a replacement for each other but without doctors’ advice they cannot switch. Buyers are extremely brand loyal in this industry and they usually avoid switching such medicines, which suits their body.

Bargaining power of suppliers is low

The bargaining power of supplier is low because a supplier of massive pharmaceutical companies like GSK, Tasly , Pfizer, etc. cannot afford to bargain a lot because if it loses a contract so it may be a huge loss for that supplier. For example, if Tasly is supplied raw material by a certain company so that supplier will try his level best to maintain excellent relationships with them and must not negotiate un-necessarily. In this industry the formula of medicine is very important, which is  hidden from raw material suppliers and even employees of the company. So raw material will not play a very important role as compared to the formula. Here in this industry, the quality of supplies does not matter a lot because the quantity of formula that is mixed has a real role to play in the development of medicine.

Degree of competitive rivalry is high

The degree of competitive rivalry is high especially in a developed countries like Canada, China, America, etc. that has a huge population and a competitive pharmaceutical market. Huge pharmaceutical companies in the world are trying their level best to snatch each other’s shares by doing branding activities all over the years across the globe. They are fully involved in sponsoring sports, CSR campaigns and other flourishing industries, which increase the level of competition in this industry in an excellent manner.

Threat of substitution is medium

Threat of substitute is low because a customer may switch to other cheap medicines on the basis of the doctor’s advice because for one single medicine because they need to stick to medicine at any cost for better cure. Sometimes, consumers may not go for pharmaceutical medicines that are comparatively more risky for health so they prefer herbal medicines and other items as a substitute...........................

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