Fill the details/instructions form and checkout for your essay - pro writers; top college graduates only in less than 5 mins, NO AI—Plagiarism-free!.
Posted: February 20th, 2025
Teva Pharmaceutical Industries is one of the world’s leaders of the generic pharmaceutical companies. It is primarily focused on developing, producing, and marketing generic and branded pharmaceutical along with active pharmaceutical ingredients. Teva has walked the extra mile to acquire its leadership position in the US generic market. It acquired Barr Pharmaceuticals, a multinational generic pharmaceutical based in the US, for 7.5 billion US dollars in December 2008. Today, Teva conducts its operations throughout American, Asia, and off course Israel. During the financial year ended December 2008, the company recorded revenues of around 11 million dollars (which was an increase of account 17.8% in comparison to year 2007. Operating profits decreased by 52.2% by 2008 and net profit also increased by 67.5%.
Teva’s success has been a lesson to many other growing firms that learned from Teva’s strategy and ventured into the pharmaceutical market trying to match up with the success of this giant. Even though Teva had become a mentor for others and guru in its field, those newbie firms stood as a threat to its growth.
Being faced with fierce competition from present companies and others in start up phase, Teva has to take fast actions to maintain its throne in the market and its impressive market share. As such Teva is recommended to specialize in producing generic drugs given their low investment requirements and their fast production. As such, Teva would be ensuring a high level of profits with fewer costs and less risk.
Noting that any market ventured has chances of competition, Teva has to be aware of authorized generic drugs, price competition, and competition on Copaxon. By being prepared at all time, Teva can ensure a smoother less risky war should any competitor decide to open fire on the company and battle for its market share and status.
Lastly, Teva has been a master piece of strong planning and implementation. It has grown far beyond the horizon of success and has proved to be one of a kind during its many years in the market. I believe that even though competition is always present, Teva will always surprise the world with new successes and triumphs.
Teva, a global pharmaceutical company based in Israel, envisions becoming one of the world’s leaders in pharmaceuticals. It strives to achieve that by being the acknowledged leader in the worldwide generic industry; moreover by creating a global franchise in certain innovative products spurting from Israel. Teva’s success has always laid in the proper leadership of their management, the expertise and commitment of their people, the premium quality of their offerings, and their focus on their customers and patients.
Teva, being one of the biggest and well positioned generic drug producers has dominated the market of generic drugs in almost every aspect and is always predicted to increase market share in a market that is vastly growing.
Based in Israel, Teva’s target markets are in Europe and America. It has premium access to reputed pharmaceutical research with its firm connections with top universities institutions in Israel. Moreover, it makes use of valuable incentives in tax.
It is by consent that Teva’s R&D is the best in the world. Throughout the years, it mastered producing generic equals of branded drugs in a quick and cheap manner. Its marketing arm, the largest and finest among generic drugs, has become stronger when Teva acquired Sicor that has strong ties with the hospital market.
The only branded drug of Teva, Copaxon, is for the treatment of sclerosis. It has been very profitable for the company but is facing competition today noting that its orphan drug status expired. Moreover, Teva is one of the largest manufacturers of pharmaceutical active ingredients. Almost half of its sales are to itself; that is through arms laissez-faire transactions.
Today, Teva has a well rooted history and tradition in the pharmaceutical industry and the business realm in general. The key to its success has always been the smart choices that it has taken which were completely different than those of its competitors. Teva’s research and development has drawn new frontiers to its innovation.
Its emergence and success in Israel were the talk of the world. Many followers learned from Teva’s experience and ran into the market trying to nibble on the crumbs left over by this mega success giant.
Teva’s focus has always been on producing generic products under the umbrella of cost efficiency, speedy production, availability, and, most importantly, reduced inventory. It strived for excellence to control local labor costs and skills; it created strong inventory levels to enhance replenishment; it adopted backward integration with active ingredients so that it sources at a much bigger scale and little costs; it put big investment in distribution and supply chain management; it was always aware and about of its operational efficiency and effectiveness; and lastly, there was a nonstop adaptation to its growth and acquisitions.
The research and development division is considered as the backbone of any pharmaceutical company, and Teva knew that very well. Teva understood that in order to make a name out of themselves they have to ensure that they have a solid team behind all the research and development in order to come up with constant innovative drugs for the world. But Teva’s funding for their R&D was in no way comparable to those of the big players in the industry. The top ten pharmaceutical companies in the world spend around $45 billion on R&D yearly. Teva’s $100 million is almost insignificant to that.
It was David against Goliath all over again. Teva knew they had to play the game with whatever resources they had so their main strategy to partner up with other companies in order to develop new drugs. Such strategic partnerships yielded 150 to 180 drug proposals per year, many which led to successful flagship generics. In addition to providing a lot of new proposals, Teva was able to reduce the cost of drug development by 40-60%.
Teva’s strategy was not only confined to strategic partnerships though. They also kept their eyes open for any up and coming startups or already well established companies that showed signs of innovation and directly went for the swoop. Teva acquired several companies (some were multi-billion dollar acquisitions) whenever they thought it was necessary, and so far have a very successful record of doing so.
As Teva’s product line grew, they had to make sure that their intellectual property is always safe. With huge competitors in the industry, they could not risk losing an innovative drug without registering its patent. They also focused on patenting not only the drug itself, but the manufacturing process as well in order to limit competitors from stealing any ideas since corporate espionage is very common in the pharmaceutical industry.
As discussed earlier, Teva had limited resources to work with, so they had to cut corners wherever they can, and this has become part of their values. Teva could be considered as a fiscally conservative company where every expense or acquisition would take delicate planning and faced a lot of scrutiny. With such a strategy, they were able to match up the big companies with huge budgets for R&D.
Teva also boasts an excellent record for acquisition integration between the acquired companies and their own. This is not an easy task to do especially with multi-billion dollar acquisitions.
Teva was an avant-gardist in the pharmaceutical field. It built its own path in a very professional manner. It spread on the table all its available cards & started eliminating the least efficient ones, trying to reach the most beautiful bouquet of choices that would differentiate it from its competitors. Teva’s product scope consisted of the following:
Lowering its standard cost through mass production commodity generics. Economies of scale decrease product cost.
Producing similar products in different shapes (syringes, inhalers, etc…) and invading the US market; i.e. United States “3 months” exclusive generics.
Focusing on the so called Niche products & biosimilars.
Executing its strategies & scopes in a very efficient way, while applying faster ANDA applications, and thus leading to a larger reception of approvals from a geographical perspective.
Imposing a strong & well-confident presence in the International market, targeting a multinational tag.
Reducing the interest in marketing & limiting the need to advertise.
Attracting & targeting national suppliers that are independent from wholesalers in their purchases.
Focusing on a better inventory management through adopting better services, as well as getting high discounts & cheaper offers through placing high orders of material.
Maintaining their shareholders through offering guarantees & credits with low prices.
The market for generic drugs market is mistakenly labeled as commodity. Given that it was true, it is most likely that no one buys a branded drug should a generic alternative be introduced into the market. Research shows considerable brand loyalty in the market for drugs. Consequently, Teva benefits from various competitive advantages allowing it to earn abundant returns:
Larger drug chains usually favor working with larger branded companies such as Teva that is able to offer them a wide variety of drugs.
Teva’s manufacturing, R&D, and marketing labeled as the best globally thus enjoy momentous economies of scale.
Teva is given noteworthy tax breaks and priority access in Israel when it comes to research.
Producing a huge chunk of its own APIs, Teva enjoys primary access to APIs of narrow supply.
The pipeline of Teva’s generic drugs overpasses that of competitors by long way.
Teva enjoys a multiple branded drugs portfolio which helps it build a well rooted franchise.
To understand TEVA more and to understand its success in the market, we will analyze the five forces model reference to Teva and its expansion.
Starting with the barriers of entry, the threat of branded drugs entering the market is relatively low. Yet, it is more likely and easier for generic brands to enter the market; taking note that not many new brands can afford starting up a new business. While studying the market, we can realize that the biotech has altered the timeline, information at hand, and investment needed to introduce a product to the market.
On the other hand, if we were to analyze the limitations that bounded Teva in the market, we can spot a few. First, we face the access to the distribution through health care. This barrier is wide spread among pharmaceutical companies and can hinder their exposure. In Teva’s case, this was evident throughout its inception and growing. Second, R&D requires millions of dollars yearly and if a company is not ready with the appropriate budget, this could hinder its growth and limit its capabilities and its investments. Moreover, and moving away from the material door, there is always big cost paid for the intellectual property. That is, while Teva was rushing to create new pharmaceutical products, there was always a big cost paid for buying patents and ways to preserve their protection.
Moving on to consumer power, consumers – patients – are moderately powered but mostly rely on the referrals of their doctors and pharmacists. Yet, with extensive marketing and distribution of product information, patients now have more power to influence their doctors to prescribe a certain brand of drugs.
In addition, we realize that indirect customers (ex insurance companies and medical professionals) have big power. This is explained by the large amount of substitutes present for one medical case. On the other hand, some doctors tend to have certain affinity to certain pharmaceutical drugs. Also, insurance firms tend to lean towards lower costs and more generic products when possible.
While studying the supplier side, we realize that the threat of suppliers is somehow low. This is because chemical materials are usually easy to attain and exist in many substitute forms. As such, pharmaceutical companies have more power than suppliers when it comes to choosing their active ingredient source since they have the option of choosing their best buy from various options.
Like any other market, there are always threats of substitute products hindering the success of present products. In Teva’s case, the threat of substitute is rather medium noting that, as mentioned, there is high customer loyalty in the pharmaceutical industry. In other words, customers will not risk shifting to a new generic/non generic medication even if the price is more tempting.
As for the pharmaceutical industry, we see that there is high competition in this arena. Rivalry is somehow fierce with the high level of industry profitability. Not to mention that new competition in the market is always of pressure to existing firms; also that when the price is under pressure, growth becomes stagnant. This economic sternness is what regulates the competitive business in the market.
I believe we can learn a lot from Teva’s value chain. Teva’s consistency in the market has helped it travel long way into success. Their choices have always been consistent with the advantages they sought and the market they ventured into. Their R&D was solid and targeted the right niche to study. Their marketing was well implanted and their sales distribution was efficient. Moreover, their services were one step ahead of their competition. This was what drew new boundaries for Teva and had it shine in front of many other competitive pharmaceutical companies.
Teva’s success was never its attractive structure but the art it used to arrange their operations and to target their industry. Teva, throughout the years, exploited restrictions with direct foreign investment in order to license their drugs and to create a group of Israeli experts. Moreover, Teva has used innovative partnerships in order to build its R&D capabilities. A smart move that Teva adopted was commanding a premium price to its blockbuster branded drugs. This generated more profits with the higher prices. Most impressively, Teva seems to have a consistent message flowing to how Teva allocates their resources – manufacturing, fit, and performance.
What seems rather smart of Teva’s behavior is its balancing strategy. To some this might seem as a mishap, but come to think of it, Teva was trying to stay away from being stuck in the middle.
Being the CEO of Teva, I find myself on a crossroad with various branches. Teva has ventured though many market during its life period but the question is whether all those markets were required for this growth and whether some actually hindered its growth rather than boost it. I recommend that Teva further expand in the global generic markets.
The industry of drugs grows non-cyclically; that is, consumers buy those drugs despite of any economic situation. Aggregate demand will always grow in the future given the non stop flow of new drugs. Yet, new drugs tend to be extremely expensive to develop and take a very long time as well. Branded pharmaceutical companies dive into these expenses and efforts only to monopolize a market temporarily.
On the other hand, generic drugs are not newly invented drugs. Pharmaceutical companies come up with an equivalent for another branded drug then seek the FDA for an ANDA. If the new medication is chemically equivalent to the latter, no further clinical studies are required. This is why generic drugs are cheaper, faster, and easier to bring into the market and are more probable to be approved by the FDA than new branded drugs.
The industry of generic drugs is differentiated with great economies of scale. This is why the industry is consolidating nonstop. Scholars predict that there will be a few big generic companies controlling the world market, and Teva is definitely one of them.
Teva’s generic portfolio has one hundred nineteen drug fillings approximately seventy five billion dollars with US brand sales. Its generic pipeline floods that of its competition being almost twice as large as its closest competitor. This scope and size predicts definite growth in Teva’s future market share of generics.
As such, and as the CEO, I will lead Teva into venturing further into the generic market and acquiring profits through producing generic drugs that take little time, efforts, and investment to finish. Nonetheless, there will always be a backup plan ready at anytime needed to dive into another market. This is also easy for Teva given its wide prior experience in all fields of pharmaceutical drugs.
With every big success come threats. And this case, give that I am an executive in a big pharma, I would definitely aim at throwing massive competition on Teva to lower its power and market share.
Usually, and in an attempt to battle with generic companies, branded companies create authorized generic drugs simultaneously with the exclusivity period of the generic product. This will severely affect the generic drug business. Therefore, I will adopt this strategy to break down Teva’s high empire walls and make it more vulnerable to its surrounding competitors.
Moreover, and since the market for generic drugs is a services market, price is the main factor of differentiation. By competing with Teva on prices and assuring lower prices for the same generic medication, I can insure some erosion in its profit margins.
Thirdly, I find it extremely effective to compete with Teva on Copaxon. Given the huge profits that this drug has generated, and the dependability of Teva on it, competing as such would definitely hurt Teva.
By adopting all three plans, I would be building an arsenal ready to place Teva in a vulnerable situation for at least a short period of time. Afterwards, I would introduce a fierce marketing strategy to boost my company’s position in the market and increase its market share while leaving Teva wondering on what struck it.
We live in a merciless competitive age where the rules of the jungle are evident – survival of the fittest. Some reach the top with their hard work, others mimic their way up, and some reach by pure luck. In all cases, reaching is top is not the end, rather a start of a very tough stage of protecting oneself from the cannibals that might attack at any time and the scavengers that fly in circles waiting for the knock out to feast on the failure of others.
Teva has been a master piece of strong planning and implementation. It has grown far beyond the horizon of success and has proved to be one of a kind during its many years in the market. I believe that even though competition is always present, Teva will always surprise the world with new successes and triumphs.
Every student wants the best grades and that’s our Focus
Our team consists of outstanding writers who have specialized knowledge in specific subject areas and professionals experienced in academic research writing. They hold at least a graduate degree—230 with Masters and MSN, experts carefully selected and trained to ensure the best quality of our work. .
We are committed to hiring the most skilled writers who can deliver high-quality work at a reasonable price for college students. Thus, we offer the best value for money without sacrificing the standard of our essay writing services; the quality of the paper's content. #Remember to activate the DISCOUNT Code on the order form COUPONS' section before making payment for your essay.
The service guarantees that our final work is 100% original, rearched and human written. We are committed to delivering plagiarism-free and AI-free work to each university/college student's 'write my paper' request. To uphold this promise, we check every draft for any possible instances of duplication, wrong citation, grammar errors and artificiality before we send it to you. Thus, you can always rely on us to write genuine and high-standard content for your essay assignments.
When you decide to place an order with Homework Ace Tutors, here is what happens: