Environmental Analysis Framework

Environmental Analysis Framework

To some companies such as NORVARTIS, which is a pharmaceutical company, some factors such as technological, social cultural and economic factors are of little impact. There are certainly some advantages of investing in such an industry as opposed to a luxurious company such as BMW. When a corporation gets legal support, and the government exempts taxes on the sale of products, then the success of the business becomes paramount. The same cannot be said for products that face additional added costs from complementary products. On the other hand, the pharmaceutical industry faces competition threats as compared to working in a distinguished company like BMW. The latter relies on class and distinction where the customers make their orders on preferences based on the quality and the association given to such a model. On the former the case is entirely different where preference is not a prevailing factor as opposed to need and necessity.

Customers are the bottom-line determinants of product success in the market. However, when the heuristics are influenced by external factors in favor of some products as opposed to other leads to wondering where the freedom of the free market starts and ends. It should be noted that essential goods and products are promoted by market influencers such as the government and the legal factors. The case of Quintiles, for example, is worth considering. The marketing power of the company faces strict quality and price regulations. For this reason, threat from new entries is minimized which it makes difficult for fair competition. Comparing this to the case of BMW, the company maintains high standards in production models. In cases where technological factors rarely influence the business performance, it is prudent to adopt a favorable approach that reduces the final cost of the product.

References

Barney, J. & Hesterly, W. (2006). “Strategic Management and Competitive Advantage”. (2^nd edition). New Jersey: Pearson Prentice Hall.

Carter, Glenn. (2005). “Healthcare Articles: Competitive Strategy in the Pharmaceutical    Industry”. Pharmaceutical Professionals Pty Ltd.

Daft, Richard L. (2012) Organization Theory and Design, 11th Edition. Cengage Learning, pp 170

Novartis Global, (Online): http://www.novartis.com/ (Accessed on January 16, 2015)

Porter, M. E. (1979) How competitive forces shape strategy? Harvard Business Review, pp 83

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