Abstract
Teva is a leading player in the global pharmaceutical industry. The multinational company has continued to acquire new businesses and firms. This paper analyzes Teva’s competitive advantages and strengths. The discussion also evaluates the company’s resources and opportunities. The article also explains how Teva should move forward in order to remain a leading competitor in the industry.
How Teva Competes in the Generic Pharmaceutical Industry
According to the case study, Teva has continued to compete against different pharmaceutical companies across the world. The company uses its strengths to compete in the generic pharmaceutical industry. By 2006, Teva had executed over 14 transactions with different companies. The company also established new mergers and acquisitions in order to increase its bargaining power (Pearce & Robinson, 2013).
The company also acquired Ivax in 2005. This decision “led to the introduction of two blockbusters called Zocor and Zoloft” (Khanna, Palepu, & Madras, 2010, p. 17). The company has also maintained an effective supply chain. The approach has made the company competitive in the generic pharmaceutical industry. Teva has also instituted new centers of excellence (CoE) in different parts of the world.
The approach has made it easier “for the company to control labor skills, business costs, intellectual property issues, and tax provisions” (Khanna et al., 2010, p. 18). The company has also continued to target the most profitable markets such as Europe, the U.S., and Japan. The company also produces quality generic drugs that can compete successfully in the global market.
The company “has a unique innovative strategy or business” (Khanna et al., 2010, p. 6). The firm has always cooperates with different academic institutions in Israel. This approach has resulted in quality drugs. Such competitive advantages have made Teva a leading player in the industry.
Evaluating Teva’s Valuable Resources
Teva has many resources. Most of these resources play a significant role towards the success of the pharmaceutical company. The first valuable resource is Teva’s research and development (R&D) strategy. Teva collaborates with different researchers and experts in order to produce quality drugs. The company’s financial strength is also a valuable resource.
This strength makes it easier for Teva to acquire new companies and business partners. The resource has also made the company competitive and profitable. The company has also employed the best leaders and managers. Such managers understand the threats and obstacles affecting the company. This practice makes it possible for Teva to engage in profitable business practices.
Teva’s competitive advantage is another valuable resource. The “above resources determine the best practices and activities in a market dominated by many global players” (Khanna et al., 2010, p. 18). The company’s factories and plants are relevant towards effective business performance. The firm uses these factories to produce the best drugs for its clients.
Teva “uses its efficient supply chain to get raw materials and deliver quality products to different customers” (Khanna et al., 2010, p. 18). Teva has also produced many innovative drugs and biosimilars. These resources will always support the company’s business strategy.
Opportunities for Teva in Biosimilars and Innovative Pharmaceuticals
The case study explains why the global market for biosimilars might grow within the next eight years. Teva can produce more biosimilars in order to compete in the worldwide market. The rewards for such generic drugs can be very high. Such “generics are cheaper and easier to produce compared to innovative drugs” (Khanna et al., 2010, p. 22). The market for such biosimilars is also underdeveloped.
The decision to produce more biosimilars can make Teva a leading competitor in the pharmaceutical industry. Innovative drugs are complex and expensive to produce (Khanna et al., 2010). According to Khanna et al. (2010, p. 22), the “period for developing an innovative drug is between 10 and 15 years”. The drugs also require the best skill, dedication, and information.
This case study explains why the corporation should strike a balance between its biosimilars and innovative drugs. Teva can use the approach to identify the best competitive advantages and opportunities. The company’s R&D team should address the challenges affecting its practices. Teva can also “form partnerships with different research institutions in order to produce quality innovative drugs” (Melicher & Norton, 2014, p. 58).
How Teva Should Move Forward
Teva has maintained an annual growth rate of over 30 per cent. The “biggest question is how Teva can keep its current pace” (Khanna et al., 2010, p. 22). I am encouraging the company to focus on every emerging global market. This strategy will ensure the company markets its biosimilars to different consumers across the globe. Some countries such as Japan, France, and Germany have also opened up their markets.
This situation makes it easier for Teva to market its products to more customers across the globe. It will also be appropriate for the company to target new markets such as Latin America, Africa, and Asia. These two approaches will ensure the company is on the right track. Teva can also produce new innovative drugs in order to become a market leader (Pearce & Robinson, 2013).
This approach will ensure its innovative drugs are competitive and profitable. The managers should also be ready to analyze every change in the global market. This practice will address every challenge affecting Teva’s performance. The company should also support its research and development (R&D) team. The strategy will ensure the company remains profitable across the globe.
Reference List
Khanna, T., Palepu, K., & Madras, C. (2010). Case 21: Teva Pharmaceutical Industries, Ltd. Harvard Business School, 1(1), 1-25.
Melicher, R., & Norton, E. (2014). Introduction to Finance: Markets, Investments, and Financial Management. New York, NY: Wiley.
Pearce, J., & Robinson, R. (2013). Strategic Management: Planning for Domestic and Global Competition. New York, NY: McGraw Hill.