The paper "Environmental Forces that Affect the Global Pharmaceutical Industry" is an outstanding example of management coursework. Over centuries, the pharmaceutical industry has endeavored to provide answers to most of the world’ s perplexing medical issues by researching them and providing a relevant antidote to the problem. However, the industry has currently been hit with various incessant challenges which promise to threaten the smooth operations of the industry. Most of the challenges are strategically based hence require esteemed business professionalism to be addressed. The analysis in this paper attempts to find out the factors affecting the efficient operation of pharmaceutical companies leading to consequential shrinking of the industry and making effort to address such emanating challenges accordingly. Environmental Forces That Affect the Global Pharmaceutical Industry The pharmaceutical industry is one of the best innovative and profitable industries across the globe reason attached to the high level of medical intellectuality within its sectors (Cox & Rawlinson, 2009 p144).
The industry has vast opportunities despite the threats. The companies within the industry have shown exceptional interest in forming the external alliances such as partnerships which have indeed assisted the company market drugs efficiently, gain robust bargaining power, reduce cost and compete effectively in research.
As such, the demand for drugs is always high and the industry has the mandate to supply sufficient drugs to meet the demand. The industry has however been associated with some identifiable weakness. The financial support for clinical trials is dependent on the published results favoring the interests of the sponsors, which indeed is a central weakness requiring serious address (Abdi, Elliot & Edalat, 2016 p34). The threats experienced by the industry, on the other hand, including but not limited to the governments’ pricing legislation which compels pharmaceutical companies to sell drugs at exasperating low prices and short patent expiry for drugs. PESTLE model considers factors such as Political, Economic, Technological, Environmental and Legal factors affecting business operation.
Some of the environmental factors include environmental movements which occasionally threaten to sue pharmaceutical companies on carbon and other pollutants’ emission (Land, Amjad & Nolas 2011, n. d). Pharmaceutical companies should ensure wastewater treatment technology, proper sewage system, and expired drugs hold house amongst other factors. Technology plays an imperative role in defining the methods of research, development and manufacturing of drugs.
The industry’ s resolution to use advanced technology in drug production has resulted in more quality output and simplified processes. Economic factors that persist to affect the industry include interests, inflation, taxes and exchange rates. Lofty interests daunt investors from investing in the industry as high taxes levied on the industry’ s products results in high production costs and inefficiency in operations (Narayanan & Fahey, 2015 p210). High import charges and tariffs discourage globalised trade. Scenario planning also identified as scenario and contingency planning is a strategy used to look into the future and how it can unfold and affect the organization.
Scenario planning assists organizations to view microscopic business elements on the economic lens and ascertain how such elements might turn up to affect the business in the long run (De Carolis 2003, p. 33). Pharmaceutical organizations have the primary mandate to understanding and planning on health issues so as to evade their consequences in the future. On the same note, the companies within the industry have endeavored to plan according to by ascertaining how their current problems might affect them in the long run and how the anticipated future changes might affect the business so as to adjust accordingly to meet such challenges.
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