Each with a slightly different option for the health-conscious.įor businesses that have a strong market position, the threat of substitutes perhaps one of the most important issues.
#Pharmaceutical industry threat of new entrants plus
It has expanded its product offerings from Coca Cola Life, to Plus to Diet, to Zero sugar. In fact, it is one that has not gone unnoticed by the company. Whilst Coca-Cola is not a monopoly, most of the other forces do not apply – which makes the threat of substitutes such a key strategic point. Whilst it dominates the soft drinks market, it was losing revenue to healthier options such as smoothies and low-sugar juices. The variety of flavoured waters and juices has increased substantially – putting pressure on Coca-Cola to evolve. Coca-Cola for instance has been facing increasing pressure from low-sugar beverages – taking away more health-conscious consumers. Yet it can still face a significant threat of substitutes. In fact, this is the epitome of a monopoly – it has unrivaled market power both up and down the supply chain. The potential for new entrants is high, bargaining power of buyers and suppliers is low and there is no competitive rivalry. There are firms that have a strong market position with its own market – perhaps even a monopoly. The threat of substitutes cannot be underestimated. With 122 individuals on the list from the pharma industry, the sector leads the wealth creation list. Pharma sector has added the most number of new entrants to this year's IIFL Wealth Hurun India Rich List, an annual ranking of the richest individuals in the country. The leading wealth creating sector in 2020 Another excipient manufacturer Sigachi Industries has filed its draft red herring prospectus to use the Street's sentiment to launch its IPO.ĥ. Two specialty chemical companies-Rossari Biotech and Chemcon Specialty Chemicals-launched their IPOs during lockdown, highlighting the pharma ingredients produced by them. Not only mainstream pharma stocks, those of specialty chemical companies also zoomed on back of their supplies of pharma ingredients. 35 of listed pharma companies have surged to a record high in the past couple of months. The S&P BSE Healthcare Index has gained over 70% since lockdown was first enforced in March. The onset of pandemic reversed the Street's bearish sentiment on the sector.
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All that is pharma is selling on the Street The Indian pharma sector also emerged a leading exporter of hydroxychloroquine (HCQ) drug to the US and other markets.Ĥ.
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With over 10 brands launched till now, the molecule is possibly the fastest to cross the Rs 100 crore mark since its launch in the country. Favipiravir, the drug approved for treating mild to moderate symptoms of the virus, became the top selling drug in India for the month of September. Drug supplies for containing the virusįrom launching drugs to contain the virus to developing vaccines that will stall its spread, the companies in the sector have been at the forefront to compete on both. The events of the recent months prompted the government to roll out an incentive scheme to promote the local production of key active ingredients in a bid to stave off the Chinese threat to the supplies of raw materials to the export-oriented pharma industry.ģ.