Business Stategy - Transforming Sanofi-Aventis Essay

Business Stategy - Transforming Sanofi-Aventis - Essay Example (Fred Pringle, Brian H. Kleiner. 1997) Sanofi-Aventis’s product portfolio includes in it leading medicines for cancer, diabetes, epilepsy, sleep disorders and other healthcare problems. The main objective of Sanofi-Aventis’s research and development is to provide the patients with efficient medicines at the right time. And for diseases that are difficult to treat, they try to provide real patient benefit by multiplying their scientific approaches. This is also the reason why clinical trials are carried out to treat diseases. (Philippe Hermel, Annie Bartoli. 2001) Sanofi-Aventis makes sure that research doesn’t fail to take into account the complexities of human body. TRENDS OF PHARMACEUTICAL INDUSTRY First of all we need to examine the trends of pharmaceutical industry which include structural changes that have led to important transformations, industry’s very strong dependence on research and development and some significant factors leading a future sales growth. (Fred Pringle, Brian H. Kleiner. 1997) Environmental analysis (PEST) Increasing political attention In the recent years, importance of healthcare as a component of social welfare has increased as a result of which the industry has been receiving increased political attention. ... So, Sanofi-Aventis is playing a very unique role as good health is an essential social and personal requirement. The pharmaceutical companies nowadays are trying hard to maintain good communications with the society because of the increasing media attention. Technological advances The industry players are adapting to the new environments faster than ever. All this is being forced by modern technological and scientific advances in science. These advances have also led to an increased expenditure on R&D by companies to promote further innovation. Legal environment Pharmaceutical industry is a very highly regulated industry. There are a lot of legal and compliance overheads that the company has to bear as a result. Porter’s five forces: Barrier to entry: patent restrictions and really high research and development costs are the major barriers to entry for new entrants. Industry competition: competition in the industry is very high. The advantage is for innovators. Suppliers: the power of suppliers is very low. Buyer: buyer power is also low in the industry. Substitutes: because of patents there are less substitutes but there are more substitutes after patents expire. Increased competition in the industry The competition in this industry is intense. There have been a lot of new entrants in the industry lately also a number of mergers and acquisitions have taken place. Therefore, the changing face of pharmaceutical industry suggests that competitive advantage is being redefined all the time. In order to achieve sustainable growth and maintain presence the key industry players are changing their organizational structures. Structural changes There is a