- What are the strategically relevant components of the U.S. supermarket industry macro-environment?
- What is competition like in the supermarket industry? Which of the five competitive forces is strongest? Which is or are weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?
- What does your strategic group map of the supermarket industry look like? Is Lola’s Market well positioned? Why or why or why not?
- What do you see as the key drivers of change in the U.S. supermarket industry?
- What key factors may determine the success of Lola’s Markets?
- What recommendations would you make to David Ortega to improve Lola’s Market’s competitiveness in the market while mitigating any current and future risks?
Although costs have increased, the development of new drugs has seen a decline since the 1990s (True cost). The process of pharmaceutical development is long, costly, and uncertain. According to the Food and Drug Administration, the average cost of developing a new drug is $2.6 billion dollars (FDA). Approximately 50% of developed medications reach screening while a low 5% of medications are approved (FDA). With these risks, pharmaceutical companies have fixated on the promotion of their current drugs as opposed to the release of new medications. However, pharmaceutical companies have long justified their pricing by defensively arguing that revenue goes towards the research and development of new medication. In a six year review (2011-2017) of thirteen of the large pharmaceutical companies, 17% of total revenue was spent on research and development with a staggering 60% spent on the marketing of their current products (True). Over the years, pharmaceutical companies have been able to allocate their profits towards their gains. After all, the pharmaceutical industry is a lucrative business that have thrived under the laxity of regulations and have figured out ways to further increase profit margins. As these problems have become more apparent, bills such as California’s drug transparency bill of 2017 have been enacted. This bill mandates these companies to provide 60 day warnings of greater than or equal to 16% price increases (Upenn). Although the idea behind this bill is a step towards better regulations, it has yet to be adapted on a national level. As mentioned previously, the Food and Drug Administration is the sector that awards market exclusivity while the US Patent and Trademark Office is responsible for patent exclusivity. Despite having a specific timeframe for patents, pharmaceutical companies actively seek extensions through many ways. Some of their methodology includes simply applying for and extension and submitting patent applications for non-therapeutic aspects of drugs such as coating and formulation (JAMA). The delay of the patent expiration prevents the release of generic medication. Generic drug manufacturers are direct competitors of brand-name companies; therefore, these larger companies have began t>GET ANSWER