Get help now

Novo Industri Case Analysis

dovnload

Download

  • Pages 5
  • Words 1048
  • Views 349
  • Can’t find relevant credible information

    Let our experts help you

    Get help now

    Novo Industri Case Analysis

    Why has the competition in the insulin been on a nation-by-nation basis? Will this change? Why?

    The global diabetes market was worth around $350-$400 million in 1981, and was expected to grow at the rate of 5-8% per year. Competition in the insulin industry occurs and differs on a nation-by-nation basis due to the differing nature of the drug’s prescription category, the level of government regulation, the type of people influencing the patient’s insulin brand choice (including the extent of their influence), and attitudes regarding treatment.

    The U.S. has the dominant share in the global diabetes market, with 40-50% of the world’s total sales. Insulin is sold without prescription in the U.S.; on the other hand it is generally considered a prescription drug in Europe. As such, marketing to end-users and pharmaceutical distributors is an important marketing strategy in the U.S.

    The major forces behind a patient’s choice of insulin brand also differ. For instance, around 18,000 specialists and physicians account for majority of insulin sales in the U.S. This contrasts with Europe, where the source of insulin prescriptions is a small group of approximately 300 doctors.

    Government regulations and price restrictions also affect the insulin company’s market strategy. For example, in U.K., the government is known to mandate low pharmaceutical prices; while in the U.S., West Germany, and Switzerland, the government has lower restrictions. U.S. and Japan are known to have the strictest regulations. Government policies mandating that the pharmaceutical firm should produce locally also figure in a firm’s position in a particular market.

    Prevailing attitudes within nations also account for the nation-by-nation competition within insulin producers. While it is the norm to inject oneself with insulin in Western countries, it is a common practice to get their shots from doctors or medical practitioners in Japan. This practice gives medical practitioners plenty of influence on their patients’ choice of brand.

    Competition on a nation-by-nation basis can only be expected to change if the aforementioned factors also change. Since each of the world’s nations function autonomously with their respective markets behaving differently, no changes can be expected unless there would exist a global ruling body or alliance that would mandate the same competitive environment for all.

    Compare the strategies and resources of the leading insulin firms. Why has Novo been the leading international competitor to date?

    Novo has been the leading international competitor due to its advances in product innovation in the insulin industry. The company has heavily invested on insulin research and technology, leading to great improvements in the field. The higher levels of purity of its insulin preparations—which have been proven to lessen allergic reactions—also helped Novo increase its market share in the U.S. Novo’s strategy include making use of locals for finding distributions and increasing market share. It believes that local agents know local markets better and are more equipped to deal and communicate with local governments. It also plans to increase its market share by promoting highly purified insulin preparations.

    Eli Lilly and Nordisk are Novo’s primary competitors in the global insulin market. Eli Lilly has the widest product treatment line it the industry, which includes drugs, monitoring devices, and delivery equipment. Aside from having the “first mover” advantage since introducing the first commercially available insulin in the 20’s, its early strategies focused on educating doctors about the product (who in turn, prescribe the product to their patients). Lilly’s current strategy involves the introduction of chemically exact human insulin to compete with other insulin preparations. This gives the company an advantage because the use human insulin is perceived to be more effective than using animal insulin or semi synthetic human insulin. In an attempt to penetrate the U.K. market, Lilly also employed competitive pricing strategies. Nordisk’s strategy on the other hand, focuses primarily on research. It has ties with and has heavily invested on many insulin research facilities. Nordisk has gained and penetrated markets on the basis of high insulin purity and its product’s suitability for a wide range of diabetics.

    Hoescht was the world’s second-largest pharmaceutical firm and has the reputation of being the world’s most advanced pharmaceutical company. Its insulin sales however, comprises less that 1% of the company’s sales. The company, while strong in certain countries, is not a major competitor in the world insulin market. E.R. Squibb competed with Eli Lilly in the U.S. market with its lower prices and with its marketing program that focuses on diabetics specialists. While Squibb has the second largest insulin market in the U.S., it is considered a technological follower and just sources its products from Novo. Other companies such as Wellcome, Connaught Laboratories, are important in certain national markets.

    What challenges does Novo face in 1982? What should Novo do?

    By 1982, the challenges Novo faces, which promised to alter the insulin industry as a whole, occur in two levels: One, changes in the competitive environment and two, changes in technology. These changes also created threats and opportunities in individual national markets and therefore altered Novo’s way of competing globally. To ensure the company’s success and maintain its competitive advantage, Novo should be able to effectively predict these changes. Its strategy must also ensure that both levels of challenges are addressed appropriately.

    In an industry undergoing significant change, Novo must decide how to effectively defend and build its international position. Taking into consideration the different market environment in various countries where the company has significant stake, Novo’s marketing strategy should be able to adapt to every scenario. Who the “influencers” are—doctors, physicians, and other medical practitioners—in each market and the extent of their influence on patients should be included in this strategy.

    Significant developments in the treatment of diabetes means that Novo must keep abreast with current technological developments. In an era where optimal levels of purity have already been reached by most companies, products that would appeal and deliver added value to the patient can be a great way to achieve competitive advantage. Effective, non-invasive delivery systems for insulin show promise; Novo should therefore focus on the research and development aspect of providing new ways of delivering insulin. Product innovation should be in Novo’s arsenal if they want to remain the leading international competitor.

     

    Novo Industri Case Analysis. (2017, Apr 18). Retrieved from https://graduateway.com/novo-industri-case-analysis/

    Hi, my name is Amy 👋

    In case you can't find a relevant example, our professional writers are ready to help you write a unique paper. Just talk to our smart assistant Amy and she'll connect you with the best match.

    Get help with your paper