FINANCIAL ANALYSIS

Financial Analysis

[Name of the Institute]

Pharmaceutical Industries

Introduction

The extensive pharmaceutical industry wraps all the stages of the development and the distribution of drugs that are used for the medication. The pharmaceutical industry in the United Kingdom is a billion Euros industry which is cautiously controlled by the British Government.

Functions

The pharmaceutical industry endows the money into the drugs creation and also generates the profit by selling them. The research and development of drugs is very much expensive which causes the pharmaceutical companies to be uncertain in supporting the research for new drugs. There are many drug companies which compose the pharmaceutical industry in United Kingdom.

Oversight

The industry of pharmaceutical is carefully controlled by the Government in order to ensure that all the drugs are liberated to the public which has been tasted thoroughly. In the country of United Kingdom the food and drug Administration overseas the regulation of drugs.

Features

Like other companies pharmaceutical industry also uses the special expressions in their skills, particularly for the testing of the drug phases before liberating it to general public. This may include the announced approval, or ensuring them that the patient is participating in drug testing must knows that he / she is participating in the experiment of drug testing or the expectations of how the strong a drug can be against the condition versus the anticipation for the drug.

Portal's Five Forces

Portal five forces is the framework for the analysis of industry and development of the business strategy (Michael E. Portal from Harvard Business School in 1979). It sketches upon the industrial organization economics in order to derive the five forces which evaluate the competitive strength and thus attractiveness to the market. Attractiveness is related with the overall profitability of an organization. Porter's five model forces helps manager of the strategic business to evaluate the industry in which their business operate in order to identify what should be done and also take benefits over the current competitors. It also determines how the specific industry would be for the new entrants.

Five forces of Porter's are

Threat for new entrants or potential competitor's

Degree of rivalry among existing firms

Bargaining power of buyers

Bargaining power of supplier

Closeness to substitute products

The analysis of five forces of Portal's for pharmaceutical companies in United Kingdom is as follows.

Threat of new entrants

There is a high barrier for the entry of new entrants as the cost that is associated with the research and the development for the new drugs is so high. There are also Government regulations due to which there is low (Grundy,2006, p.213-219)competition for the new entrants or the potential competitors because of the barriers in the entry and also because of the rigid constraints

Degree of Rivalry among Existing Firm

There is high degree of rivalry in the pharmaceutical industry of United Kingdom. For instance, the recent rivalry in the erectile dysfunction gap where the GlaxoSmithKline uphold that Levitra works quickly or the Cialis claims that it works longer than Pfizer's. The degree of rivalry between the pharmaceutical industries is highly competitive.

Bargaining power of Buyer

The companies of pharmaceutical ...