Teva Pharmaceutical Industries, Ltd
1) External Environment:
The Pharmaceutical Industry is dependent on political and legal conditions of general environment. In pharmaceutical industry we have two kind of medications which are generic or innovative. Innovative pharmaceutical industry success depends on the patent protection in the industry. For example, in United States innovative industry can have 10 to 12 years of patent protection life from the time that product is for sale in the market. Success of the generic pharmaceuticals which are bioequivalent to innovative pharmaceutical is also related to the political and legal environment of their market. If we look at pharmaceutical industry globally we can see that
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Moreover revenue growth and net income growth was positive and high during the 12 and 36 month period. Teva occupy 18% of generics market in USA and by merging with Ivax it has the highest number of 180-day exclusivity in 2006.Also since 1985 Teva did merger and acquisition valuing $12 billion which is unique between generic companies. Teva is largest public company in Israel and was among the first companies that are on the Tel Aviv Stock Exchange in 1968.
4) Strategy of the firm and Gap analysis
a) Business level strategy: They have tried to become as large as they can by using merger and acquisition technique to compete better with their competitors .Cost leadership is the business strategy that Teva is achieving. They spent a lot of time on their business model to be able to offer the lowest price.
b) Corporate strategy:
Exhibit 7 shows that Teva is practicing the dominant business strategy and almost 80% of Teva revenue is from generic sales.
GAP ANALYSIS:
Gap is very small for Teva Company because they are very good in their acquisition strategy.
The small gap can be filled by entering into physician driven market instead of waiting for change in concerned countries regulation even if it would be more costly in short term. Teva should continue in its
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A company like Teva Pharmaceuticals is subject to all of the factors of the external environment given the nature of its business and global expansion. Pharmaceuticals is an industry where high profits can be achieved, but it is also an extremely challenging business when one considers all of the political/legal aspects involving government regulation and patents. Every country has strict regulation and testing requirements for drugs that affect companies differently depending on their position in the market. Originally, innovative pharmaceutical companies had to obtain patent protection and FDA approval but this would translate to years of protection from the generic competition. Once the
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It has been the major factor behind their success and can be seen as their business strategy.