Discuss about the SWOT analysis on Richter Pharmaceutical Hungary.
The following report is based on internal and external strengths and weakness of the pharmaceutical firm Richter located in Hungary. Richter is one of the oldest and largest the pharmaceutical firms in the world. The firm has gained the popularity for its innovative products featuring original hormone drugs as well as the capability of manufacturing large range of compounds (Richter.hu 2017). Within a short period, the firm got into the global market and started operational in almost all European and other western nations. The owner of the company observed a tremendous growth in profits as the revenue source of the company is increased. However, as the needs and demand in the pharmaceutical industry are rapidly changing, Richter needs to develop its products and services and adopt new technology to speed up the manufacturing process. The focus of the company is also on the development of Information Technology (IT). Nevertheless, it is essential to analyze internal and external strength and weakness of the firm to accept new changes in current IT structure of the firm.
Project Scope- The report highlights the external and internal forces that drive the operation of the company in pharmaceutical industry. However, the report does not provide any suitable solutions for the issues that company faces in the industry. Nonetheless, the critical discussion in the report helps to learn about the current trends in pharmaceutical industry that have high impact on the operation.
- To critically analyze the internal and external forces that affect the global operation of Richter Pharmaceutical
- To evaluate the current marketing strategies of Richter Pharmaceutical
- Historical data of pharmaceutical industry
- Data authentication
- Reporting requirement
- Manageability of collected data
- Data availability
- Skills for analysis
- Data confidentiality
· Large market share
· Different categories of products
· Active manufacturing capabilities in 4 different nation
· Vast range of pharmaceutical drugs with the inclusion of original generic and licensed products
· Full utilization of Information Technology
· Entire firm is connected through VPN network
· Traditional tall structure slowing the organizational operation
· Increasing controversies regarding the use of safety drugs affecting company’s image
· Occurrence of patient’s expiry affecting brand reputation
· Inadequate IT structure
· The company has the opportunity for making strategic agreement with other pharmaceutical organisation
· It can effectively penetrate the international market through merger and acquisition
· Opportunity for getting into large Asian market
· 10 major global integrated competitors acquiring large area of the global market
· Increasing risk of unsuccessful new products
· Regulatory framework of each nation has become more stringent
· Persistent economic downturn in European market
Table 1: SWOT analysis of Richter Pharmaceutical
Discussion of SWOT analysis
Strength- One of the major strengths of Richter Pharmaceutical is its large market share. The innovative products and unstoppable supply enables the firm to sustain the operation in the global market. The company earned the highest revenue from Easter block (Richter.hu 2017). Apart from this, Soviet Union is another significant market for Richter as the market is hassle-free with the absence of pricing issues. Another significant aspect of Richter’s success is its vast categories of products that help the company to avoid market risk caused by saturation (Khanna 2012). The implementation of IT helps Richter to manage its global operation. The major IT initiatives of Richter is “Document management system”, “SAP business information Warehouse”, “additional SAP module in Hungary” and many others.
Weaknesses- As the firm is globally running its operation, developing the branches in many nations, traditional tall structure of the company slows down the process of operation. This happens as the decision-making process of the firm takes a lot of time, which is again because of the tall structure. In addition to this, the reliability as well as the performance of adopted internet-based VPN remains out of business controls (Kleis et al. 2012). Moreover, due to the changing regulations in many nations, the use of drugs is often prohibited.
Opportunities- As the company is largely popular in the global environment, any company in the industry prefers to make strategic agreement, which remains as the opportunity for Richter to penetrate in new market. In addition, the emerging market like China may turn out to be a profitable market for the company (Guler and Nerkar 2012).
Threats- The major competitor like GlaxoSmithKline has increasing popularity in the global market due to their highly developed products. Rapid market penetration of GlaxoSmithKline in European market could influence the sales margin of Richter (Wang et al. 2012).
Bansal, D., Malla, S., Gudala, K. and Tiwari, P., 2012. Anti-counterfeit technologies: a pharmaceutical industry perspective. Scientia pharmaceutica, 81(1), pp.1-14.
Guler, I. and Nerkar, A., 2012. The impact of global and local cohesion on innovation in the pharmaceutical industry. Strategic Management Journal, 33(5), pp.535-549.
Khanna, I., 2012. Drug discovery in pharmaceutical industry: productivity challenges and trends. Drug discovery today, 17(19), pp.1088-1102.
Kleis, L., Chwelos, P., Ramirez, R.V. and Cockburn, I., 2012. Information technology and intangible output: The impact of IT investment on innovation productivity. Information Systems Research, 23(1), pp.42-59.
Richter.hu. (2017). English Home. [online] Available at: https://www.richter.hu/en-US/Pages/default.aspx [Accessed 19 Apr. 2017].
Wang, Z., Richter, S.M., Gates, B.D. and Grieme, T.A., 2012. Safety Concerns in a Pharmaceutical Manufacturing Process Using Dimethyl Sulfoxide (DMSO) as a Solvent. Organic Process Research & Development, 16(12), pp.1994-2000.