Eli Lilly & Co Case study- Swot Analysis

Introduction Of Eli Lilly & Co Case study

Eli Lilly and Company is an American pharmaceutical company which is committed to create high quality medicine and healthcare products to address Global burden of disease. The company was initially founded in 1986 by Colonel Eli Lilly (Van Campen et al. 2015). He was in the American Civil War 31 and also known as a pharmaceutical chemist. The company is considered a full member of the European Federation of Pharmaceutical Industry and Association as well as pharmaceutical research in the manufacturer of America. His charge to the generations of employees who have followed was this: "Take what you find here and make it better and better." However, even after various lawsuits as well as legal charges, this company is committed to provide pharmaceutical products that can improve wellbeing and livelihood of the population (Van Campen et al. 2015). The long-time commitment of the company is reflected in the Research and development department as they actively encourage evidence based pharmaceutical products with high quality control benchmark Lilly to be involved in publicly funded research projects with other industrial and academic partners (Dawson et al. 2019). The paper will provide insight into complete analysis including Four Ps, PESTLE, SWOT, competitive and financial analysis in following paragraphs.

Vision and Mission Statement of Eli Lilly & Co

Vision: The vision of the Eli Lilly and Company is “We will make a significant contribution to humanity by improving global health in the 21st century.”

Mission: The mission of the Eli Lilly and Company is “We make medicines that help people live longer, healthier, more active lives

Vision and Mission Statement of Eli Lilly & Co

Industry Structure and Economic Feature

Eli Lily has worked in the pharmaceutical industry and currently working on Innovation-based Growth Strategy and Pipeline Developments. Pharmaceutical industry usually discovers, produces, markets drugs or pharmaceutical drugs for use as medications to be administered to the patients (Waring et al. 2019). Pharmacological industry currently binding with chemical agencies, regulation and involvement of government agencies.

The economic packaging is unique to other companies. For example, the current sales of national packages usually account for 61% of revenues and 50% of the revenue comes from pharmaceutical packaging in the United States. This company is planning to involve in S investment of $2.1bn to expand its manufacturing footprint in Indiana, US.

Eli Lilly & Co Strategies

Part 1: Business-Level Strategies

The common business strategy exhibited by the company is the R&D organization. This R and D aims to discover, develop and deliver life changing medicines and hence, this aims to attract very high customer loyalty for high quality and uniqueness (Azanha et al. 2017). The company developed business level strategy through providing historic foundation of helping people with diabetes and other break through medications.

Part 2: Corporate-Level Strategies

Eli Lilly primarily has focused on its core business of pharmaceuticals and able to comply with sustainability and ecosystem. Sustainability with respect to governance in the pharmaceutical industry should focus on product quality, and open association with healthcare professionals and patients (Kalepu and Nekkanti 2015). They have developed adopt ethical standards combined with patient-oriented business model in order to newer medicines and break through.

Competitive Analysis and Advantage in the Industry

The comparative advantages are major foundational strategies for any company to bring high revenue. For example, current competitors that can compete with this market are GSK, Bristol Myers Squibb, Merck, and Pfizer (Erlanson et al. 2016). However, Eli Lilly maintains a sustained competitive advantage by practicing a number of strategies. Lilly primarily has focused on its core business of pharmaceuticals.

SWOT Analysis

Strengths:

Strong capability to create strategic alliances & marketing partnerships
They have high operational network in United States (Baker and Geddes 2017)
They have developed in house R&D capability

Products available in over 125 countries

Weaknesses

Heavy dependence on current United states market.
Increased hurdles for drug discovery & development (Waring et al.2015)

Opportunities

UPS has been working to introduce drone technology and hence, they have opportunities to transport through drones (Baker and Geddes 2017).
Expanding markets and expansion abroad

Portfolio Diversification

Threats

There is a considerable increase in generic products. Hence, this company is operating in numerous countries and it is exposed to currency fluctuations. Focusing on generic products can improve competitive advantage (Baker and Geddes 2017).

PESTLE Analysis

Political: This company long-term profitability in certain countries but politically it may experience distress. However, risk of military invasion, legal framework for contract enforcement and power imbalance with political parties are common political impact (Kesselheim et al. 2019). The company also encountered high revenue due to regionally as well as internationally for global presence. Companies like Eli Lilly can take advantage of trade blocks and trade treaties because it provides them with a sense of safety (Okediji 2013).

Economic: A moderate interest rate will help businesses and high consumer loyalty currently improve economic revenue. The underlying reason is that high young consumer and health-conscious brands improve their inclination towards buying behaviour (Kesselheim et al. 2019).

Social: A higher awareness level also means that consumers will prefer quality and hence, health consciousness and trends of living improve inclination towards buying products of the company.

Technological: High penetration of the internet is used for personal and social lives can improve competitive advantages because of high the technological R&D in the country (Baker and Geddes 2017). However, high technology management cost as well as limited eco-friendly production may affect quality of the products.

Environmental : There is an increased focus on environmental sustainability and recycling and company is currently introducing recycled products. Currently company is focused on engaging regularly in environmentally friendly CSR activities (Tessema, Kesselheim and Sinha 2019).

Legal factors: There are strict regulations pertaining to the health and safety of the medications. Hence, company may experience issues in terms of legality of medications based on 2009 issue (Tessema, Kesselheim and Sinha 2019).. Each drug must be FDA approved in order to quality of the products.

Target Market Analysis

Demographic Characteristics of Market

This pharmaceutical firms mostly focused on biotechnological industry. Since the drugs focused on all kinds of medications, individuals having issues such as muscle joint, cancer, cardiovascular, diabetes are target population of the country.

Psychological Characteristics of the Market

Psychology is a fundamental part of buying behaviour among consumer. the individuals buying medications have one psychological goal such as improved wellbeing using medication with limited side effects. Hence, the company are more likely inclined towards medications with high shelf life as well as organic in nature

Behaviours of the Target Market

The individuals only buy medication which is easy to digest and requires a low dose to address the issue. To address such psychology, Eli Lilly is currently focusing on ecofriendly packaging as well as capsule-based packaging of the individuals (Richman et al. 2016).

Strategies Appealing to Market

Environmental based product is the major strategy appealing to the market. Focusing on eco-friendly packaging and innovation in every medication with genetic aspects are major appealing strategies of the company (Richman et al. 2016).

Marketing Mix of Eli Lilly & Co

Product Strategy (Product Mix):

They are largest manufacturer and distributor of medicines in United states and they also produced penicillin and other antibiotics. Psychiatric medication along with analgesics is also a specialty of the company because all over the country this company distributed more than 300 drugs in all these categories.

Pricing Strategy:

The company believes in value pricing because it aims to balance between biology and its economics in all aspects of company revenue. The market research models and drugs financing models enable them to decide their pricing strategy (Richman et al. 2016).

Promotional/ Advertising Plan:

The company is currently focusing on digital channels to reach doctors and changing its traditional sales force model

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Key Success Factors

They are industry leader in next generation biomanufacturing

The company mostly focused on continuous development of the research because quality control and a reliable supply of medicines is just as important as research and development (Billingsley 2015).

They have strong corporate social responsibility that mostly sustained towards transformative research.

Problems and Issues in Eli Lilly & Co Organization

Despite having Innovation and sustainability in the product this company experiences issues and problems that may lead to loss of face value and reputation. In terms of innovation, they encountered issues of lack of upgradation of technology. Moreover, recent illegality was observed in the medication. U.S. drug inspectors recently recorded several new quality-control problems at the plans that result in relaxes of 408 medications (Ho 2018). FDA is currently involved in deep quality control in order to address the quality related issue of the drug and ensure compliance with stringent regulatory requirements.

Financial Analysis

U.S., most of our products are distributed through wholesalers that serve pharmacies, physicians and other health care professionals, and hospitals. In 2021, 2020, and 2019, three wholesale distributors in the U.S. The company is currently seeking 15 percent and 20 percent of revenue (Ho 2018).

Eli Lilly has a dividend with rapid growth potential with payout ratio is approximately 50% of 2022. This leaves the company with the capital necessary for debt payment and the company planned to increase the profit margin from 20% to 60% for near future (Ho 2018). However, company also encountered decreased sales, progressive price reductions and require strong financial statements.

Conclusion

On a concluding note, it can be said that Eli Lilly and Company is an American pharmaceutical company which is committed to create high quality medicine and healthcare products. However, recent illegality was observed in the medication. U.S. drug inspectors recently recorded several new quality-control problems at the plans that result in relaxes of 408 medications. However, it has poor financial planning that requires to improve for strong market place. The future focus must be on new innovative products and expansion of markets in order to re-emerge in the market.