Team ConstellationWarner Chilcott

DRAFT COPY

Pharmaceutical products in women's healthcare & dermatology Perishable in both the physical and intellectual sense Warner Chilcott generates revenues developing, manufacturing and marketing and

selling branded prescription pharmaceutical

Integrated Business Model

#1 Company and Product Profile

R&D

Acquisitions & Joint Ventures

Manufacturing Sales & Promotion

The Micro EnvironmentNot Attractive.

- Estimated $1.2 billion in new product development costs.

- Highly competitive & heavily regulated

- Current healthcare debate

 

Attractive.

- R&D costs are high but production costs are low

- R&D costs create strategic barriers to entry

- Patent laws create 20 year market protection

#2 Analysis of External Environment The Macro Environment (opportunities and threats)

Threat: Societal back-lash from raising prescription costsThreat: US Healthcare ReformThreat: Religious practicesThreat: Taxes

Strengths

Strong focus on women’s healthcare and dermatology segment

Strategic alliances enhancing company’s business

 

WeaknessesGeographic concentration enhancing business risks

Weak presence in acne market may restrict the growth

 

What are its “crown jewels”?

Undetermined

 

#3 Analysis of Internal Environment

Strengths-Weaknesses

Company’s Resources Importance in Achieving Competitive Advantage (High, Medium, Low)

Company’s Strength in Resource relative to Competitors(Superior, Comparable, Inferior)

Patents HIGH Comparable

Brands HIGH Comparable

Organization Culture Undetermined Undetermined

Company reputation MEDIUM Comparable

……

Addressable target marketWomen’s therapeutic markets, such as women’s contraceptive & dermatology

 

Company’s strategy within target market…drive organic growth by continuing to develop and market new products and selectively reviewing potential product in-licensing, acquisition and partnership opportunities…streamlined corporate organization and resulting ability to react rapidly to changing market dynamics…

#4 What is Warner Chilcott’s Strategy?

The strategy is based on a continuous and stable need for high-quality health products

Warner Chilcott is a mid-level player in the pharmaceutical

industry

More to Follow

#5 How Effective is the Strategy?

Rarity: Undetermined

Appropriability:

Undetermined  Imitability:

While a patent is in place competitors cannot legally imitate the product. However, low-price knock-offs can be produced in countries who are not signatories of TRIPS or similar patent laws

 Durability:

TRIPS specifies 20 year pharmaceutical patents for the full scope of research with a potential 5 years limited renewal

 Substitutability:

Once a patent is filed the essential mechanism behind a drug is public knowledge. Therefore, it is highly likely that a competitor can develop a similar or substitute product.

Which Resource Leads to Sustainable Competitive Advantage? The RAIDS© Test

The RAIDS Test has been designed by M. Krishna Erramilli. Do not use without his express written permission.

Undetermined

#6 How Effective is the Management?

Can Warner Chilcott succeed in the Next Economy?

Globalization & MulticulturalismUndetermined Exponential ChangeDifficult given the large number regulations and laws governing the industry Environmental ConcernsUndetermined Bottom of the Pyramid Consumers Unlikely given that Warner Chilcott is a first tier drug company, not a generic manufacturer Hyper-competition Difficult given the large number regulations and laws governing the industry although

recent moves to acquire P&G suggest attempts to position for rapid changes

#7 Going Forward

Thank You