Michael Porters 5 Forces Analysis Cement and Pharmaceutical Industry

Group -1

ement Industry in India A short brief

PERIOD OF TOTAL GOVERNMENT CONTROL Govt set out production limits as well as distribution channels Industry concentrated in the eastern part of the country Lack of incentive to minimise costs due to uniform pricing system

First cement plant in Porbandar in 1914

PERIOD OF PARTIAL GOVERNMENT DECONTROL 66.4% - government remaining to consumers

315320 million
Total installed capacity

Demand 201112: 225 MT Demand 201617: 334 MT

Ceiling prices were set

PERIOD OF TOTAL GOVERNMENT DECONTROL Price and distribution controls removed Industrial licensing abolished for new capacities Cement exports permitted by government

BARGAINING POWER OF SUPPLIERS

Coal and limestone controlled by government Delay in licenses is a deterrent

Porters 5 forces analysis

BARGAINING POWER OF BUYERS

Buyer market is fragmented Buyer volumes are very high

BARRIERS TO ENTRY
Presence of many fragmented players Lower pricing flexibility

THREAT OF NEW ENTRANTS

High capital costs Long gestation period Raw material availability

2 players hold approx 35% mkt share

THREAT OF SUBSTITUTES No viable substitutes for cement Steel and glass are used upto a certain

 India has the highest number of manufacturing facilities approved by US FDA one-third of all Abbreviated New Drug Applications (ANDA) approved by the US FDA,belonged to Indian companies

harmaceutical Industry..A short brief Pre Post

Patent Era(befor e 2005)

Patent Era(post 2005)

Governme nt Regulatio ns

Indian Patent Act, 1970 Drug Price Control Order (DPCO), 1970 Foreign Exchange Regulation Act,1974

Emphasis on Process patents

Emphasis on Product patents

MNC Growth in Pharma Industry

Recognition of product patents in drugs after 2005, rekindled MNCs' interest in the domestic market Low production costs Exclusive marketing rights (EMRs)

1954

US $7000 million

1961

Size of the industry

Encourage d new drug discoveries over the long-term

US$32 billion

Growth of Indian Pharma Sector

BARGAINING POWER OF SUPPLIERS

Pharma companies have considerable yield in Ethical Market Protectied by Patents

Porters 5 forces analysis

BARRIERS TO ENTRY
Drug discovery process is hindered by a dearth of qualified molecular biologists Lack of funding; Govt policy supportive Highly fragmented industry

BARGAINING POWER OF BUYERS

Government is the major buyer and has significant influence However, Patients have to buy the prescribed drugs

THREAT OF NEW ENTRANTS

Drug Production cycle: 12 years Low entry barrier as Fixed cost requirement Is low

THREAT OF SUBSTITUTES Fake medicines Import of cheaper alternatives Biotech alternative