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Teva Pharmaceutical Industry Case Solution & Answer

Teva Pharmaceutical Industry Case Solution

1.Brief over view of Teva pharmaceutical industry

Teva pharmaceutical’s company is considered as one of the leading drug manufacture firms. Over the past few years; Teva has redefined its ways and has started to achieve the finest business in the healthcare industry. It is also listed on the New York Stock Exchange and has a huge market capitalization of approximately 32.17B USD. It was the leading producer of generic pharmaceuticals. It is promoted as the gold standards in Israel.(Khanna, 2006)

2.Teva Early History

  • In the 1950s, SLE purchased Asia, a small pharmaceuticals manufacturing company.
  • In 1963, after much discussion, they completed their first acquisition, of a company called Zori.
  • In 1968, he completed his second acquisition, this time of Teva, which had been publicly listed on the Tel Aviv Stock Exchange since 1951.

3.Generic Business strategy of Teva pharmaceutical industry

Teva controls 18% of generic business strategy of US by number of prescriptions. It also focused on the pharmacist-driven markets in the U.K. and the Netherlands moving to a pharmacy-driven model. It is not expanded in Israel but also has great worth in different countries of the world. For example the Europe comprised approximately 30% of Teva’s 2005 revenues.

Whereas, In Japan and other Asian markets, Teva had adopted a wait-and-see strategy and had little presence. Ivax also brought to Teva the leading presence in Latin America.

To analyze the generic business strategy; Porter’s five forces has been the greatest tool of analyzing the company’s overall competitive environment and its worth in the market place.

Porter’s model is an inclusive strategic structure used for analyzing the existing competition in the market. It is very focused and helpful in promoting the fact that how Teva Industries Ltd can create a competitive advantage for drug manufacturers. It is also helpful in improving the position of Teva and other companies, and can also be helpful in exploring the profitable opportunities across the healthcare sector. The profitability of Teva Ltd. industry can be dependent on the following 5 strategically analysis;which are:(Khanna, 2006)

2.1 Threat of New entrants

The danger of new contestants for the Teva Ltd is very high in drug producing society. The difficulties faced by Teva Ltd businesses and various contenders are lower estimating technique, lower cost and offering new benefit suggestion to the clients, These are the potential hindrances, which are being faced by Teva Ltd in holding a protected spot on the lookout.

How Teva Pharmaceutical Industries Limited can tackle the Threats of New Entrants

  • By lowering the production cost.
  • By innovating the new products to attract the old and new customers in the market.
  • By spending more time in analyzing the R&D of any product in order to gain the maximum benefits.

2.2 Bargaining power of suppliers

Almost every drug industry like Teva Ltd., has been extended by the suppliers, which means that industries buy their raw material from numerous suppliers. Suppliers on the other hand decrease the margin and profit for the Teva Ltd. The powerful bargaining power of suppliers lowers the margin of profitability for Teva Drug industry…………..

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