Competitive forces that affect pharmaceutical industry Essay

Competitive forces that affect pharmaceutical industry - Essay Example Porter’s five forces analysis is done on the industry in order to assess the level of competitiveness prevailing in the industry. The analysis comprehensively defines the extent of competition in every aspect of the industry that is covered in the analytical model. Each component of the model takes the competitiveness of the industry in that specific area into account and thus after the analysis of all the components, the overall attractiveness of the industry is assessed. Ultimately, the paper provides the conclusion of the five forces analysis conducted and the future prospects of the industry. There are a number of factors that influence the attractiveness and profitability of an industry and one of the most important factors is the competitiveness of that industry. Competition is highly important for the stabilization and survival of an industry. It is also one of the most important market forces that keeps the market prices stabilized. However, complete lack or excess of competition in an industry can prove to be harmful for the survival of an industry as well. In the complete lack of competition, there will be more room for monopoly and the firm or firms would be able to exploit their monopolistic position and in the case of high competition, the firms in the industry would be bound to offer competitive prices therefore the profitability of the firms would decline. This paper deals with the competitiveness in the pharmaceutical industry. In the United Kingdom, pharmaceutical industry is one of the biggest industries as it has made significant contributions to the GDP of the UK and also it is one of the industries with the most number of employments. In the year 2007, the industry had 72,000 employees. The trend of the growth of the industry has been positive and the overall sales of the pharmaceutical products rises from year to year. This industry is also directly responsible for the advancements in the research and