1. General description The drug manufacturing industry is concerned with the development, production and marketing of drugs which are to be used as medication. This is one of the oldest industries in the world. The first drug stores date back to the middle Ages. Some of today’s pharmaceutical companies have been founded in the beginning of the previous century. Important discoveries have been made in the early 20th century such as insulin and penicillin who became mass produced. More drugs were developed during the 1950s-1960s such as contraceptives and heart drugs. During that time numerous organizations and declarations were established in order to regulate the industry. Until the 1970s the drug manufacturing industry remained relatively small, and then it began expanding quickly. With the development of technologies and the internet research, manufacturing, marketing and sales of drugs became a lot easier. In general the drug manufacturing industry is very risky. In order companies to stay in business they need to research and develop new products. Firstly companies need to develop new compounds, however only one on every ten thousand compounds becomes approved and it takes years to do this. Then only 3 out of 20 drugs make enough revenue to cover their development cost and only 1 out of every 3 drugs generates enough money to cover the costs of previously failed drugs. 2. Drug manufacturing industry today. In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies. In the recent years drug companies showed an increase in their revenu... ... middle of paper ... ...MPONI and REMICADE, infectious disease products, such as INCIVO and PREZISTA, neuroscience products, oncology products and other pharmaceuticals. The Medical Devices and Diagnostics segment consists mostly of franchises such as Orthopaedics franchise, Surgical Care, Vision Care, Diabetes Care, Specialty Surgery, Diagnostics and other franchises. The rich portfolio J&J has of products, franchises and companies is one of the reasons why the company is one of the market leaders. 1.5 Market Share and Recent Trends Today, Johnson & Johnson is a pharmaceutical giant worth $71 billion. The company is listed on NYSE as JNJ with 2.83 billion shares outstanding with the value of $92.7 per share. 2013 is one of the most successful years of Johnson & Johnson. For the past 3 years J&J revenue has been gradually increasing having record high revenue of $71.3 billion for 2013.
In Foot Locker’s financial report it gave us some highlights on their financial growth, which states in 2012 their sales increased 9.4 percent, which was in line with last year sales of 9.8 percent gain. The total sales for the company have increased more than 20 percent, which result in growth of 6.1 billion. This is the most Foot Locker ever made as an athletic company.
As per WHO "The 10 largest drugs companies control over one-third of this market, several with sales of more than US$10 billion a year and profit margins of about 30%. Six are based in the United States and four in Europe. Companies currently spend one-third of all sales revenue on marketing their products - roughly twice what they spend on research and development."
Industry Background The pharmaceutical industry used to be a powerhouse industry with revenue of billions of dollars. 1995 through 2002 was the hey-day period of the pharmaceutical industry. In this period, profitability for the pharmaceutical companies was three times more than profitability of the median of all Fortune 500 companies in 2004. However, with the economic downturn in the first decade of the 21st century, the pharmaceutical industry had been struggling to stay viable.
In the business of drug production over the years, there have been astronomical gains in the technology of pharmaceutical drugs. More and more drugs are being made for diseases and viruses each day, and there are many more drugs still undergoing research and testing. These "miracle" drugs are expensive, however, and many Americans cannot afford these prices.
HEPATITUS and INFANRIX, which are vaccines. The company provides over 7% of the total global pharmaceutical sales and supply 24% of the world’s vaccines. They manufacture and distribute more than 10 million packs of medicine every day. GlaxoSmithKline now has a Board of 13 Directors, and a further 15 members of The Corporate Executive Team. These members are the Presidents of the various global and national departments.
Johnson & Johnson is one of the most successful companies and it can still be if it maintains doing the right thing continuously. They should keep being smart and fast decision makers to always be on top and ahead of their competitors.
Threat of new entrants is relatively high. Companies forming alliances are potential rivals. Even if earlier such company was not considered to be a threat, after merging with some research and development company or forming alliance with another pharmaceutical company it would become a rival to Eli Lilly. The threat is however weakened by significant research and development costs necessary to successfully enter the business. Eli Lilly’s focus on a relatively narrow market of sedatives and antidepressants weakens the threat of new entrants, but other products that form lesser part of company’s sales such as insulin and others are exposed to high threat of new entrants. The need of obtaining certificates and licenses also weakens the threat of new entrants. Discussed above leads to the conclusion that threat of new entrants is medium.
This fact validates the incentive pharmaceutical companies have to get a patent and acquire more power. Pfizer encourages R&D because of the incentives and a desire to obtain patents to receive more profit. Pfizer has to promote itself to be successful, creating a brand image that consumers will trust. If the company can advertise successfully, more consumers will purchase their products. Pfizer must also be generating products efficiently in order to save and use existing resources, while manufacturing their products at low costs to stay competitive....
The turnover of the company in 2008 was $15,627 million, gradually decreased in 2009 to $14,552 million which again decreased in 2010 to $13,772 million. We can see a gradual drop in the turnover.
10. Collis, David, and Troy Smith. "Strategy in the Twenty-First Century Pharmaceutical Industry:Merck&Co. and Pfizer Inc." Harvard Business School, 2007: 8-12.
Johnson & Johnson is a successful company in the health industry : Johnson & Johnson a company that, through the years, has been diversifying and expanding worldwide as leader in the market for health products , consumer, professional , ethical pharmaceuticals and industrial . The vision is "To be the world's most successful company in the healthcare , prioritizing the needs of the people " their corporate philosophy is having Responsibility for internal, external customers and Justice for Suppliers and distributors, with a Commitment to the shareholders and Respect for environmental protection and natural resources
One of the components that led to Novartis becoming such a large company is their presence in a worldwide geographic market. Novartis is currently in the growth phase of the industry life cycle, and it is expected to be there for the foreseeable future. Novartis will continue to be a threat to its rivals in the industry, which include companies such as Johnson and Johnson, Pfizer, Merck, and Bristol-Myers Squibb.
Pharming for pharmaceuticals is a dangerous process regarding organisms because of deadly gene defects that will make the animal suffer and the thousands of dollars wasted on failed attempts.
Other companies cannot replicate the drug and therefore they are forced to either wait until the patent expires or they must find an alternative drug that carries out the same purpose.... ... middle of paper ... ... It is clear to see that there are many pros and cons to patents in the pharmaceutical industry.
Johnson and Johnson has been trading above both its 50 and 200 day averages and is promising. Its current market position is very attractive as it may become a market leader when the DOW turns around. Johnson and Johnson’s undervalued price, market position, and earnings make it a good pick in a sea of ambiguity.