Major Driving Forces for Indian SME Pharmaceutical Industry: Using Porter’s Five Force Framework for a Comparative Analysis
Abstract
Purpose – The author aims to study the major driving forces that affect the operational efficiency of the Indian pharmaceutical industry with special reference to the SME pharmaceutical companies in India.
Design / Methodology / Approach – Porter’s Five Force Model is used as a frame of reference in order to gauge the effect of the various environmental and regulatory forces that affect the working of Indian SME pharmaceutical industry, using Regression Analysis as the main tool.
Findings – The reliability and the Regression equation derived from the Regression Analysis showed that competitive rivalry among existing firms is the strongest force, followed by bargaining power of buyers, threat of new entrants, bargaining power of suppliers and the threat of substitute products in that order.
Originality – Many researchers have studied the Porter model in theory and some other have studied the different aspects of pharmaceutical industry. However, there is very limited research on the analysis of pharma industry using Porter model, apart from the pioneering work of Michael Dobbs. This study follows in his footprints and applies the Porter model on Indian pharma industry with special reference to the SME units.
Research & Industry Implications – The industry will find this research of practical value, especially for SME industries that can use the outcomes of this study to devise their strategies for the growth and competition assessment.
