Globalization has significantly changed todayâ€™s business environment
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Globalization has significantly changed today’s business environment. The internationalization of markets and corporations provides a lot of growth opportunities for global companies. The globalization gives not only access to new markets, but also helps international companies to improve their operation processes through the exchange of functional knowledge and experience. Teva’s senior management realized the opportunities and risks related to international expansion and decided that taking the risk worth. The presence of the company on various international markets all over the world is pretty much the reason for Teva’s success. From a very cautious and only domestically oriented company, Teva turned into the most actively growing company in the industry. Teva’s core competence is the production of generics drugs. However the low entry barriers for this sector are premise for the appearance of an intense and tough competition. The numerous rivals on the market jeopardize the already established leading position of Teva. Moreover consumers’ switching costs for generics are low. That’s why the company needs to find new alternatives in order to differentiate from its competitors. The company needs to continue focusing on pharmacy-driven markets since they are related to lower marketing and sales costs than physician-driven ones. One of the most important markets for the company is the US market. As a result of the acquisition of Ivax, Teva benefits from the largest pipeline in the industry. In addition to that the acquisition of Ivax “opened the door” for Teva towards new and developing markets like Czech Republic, Poland, Russia, and Slovakia. Unfortunately the company has little or no presence in Europe, since most of the European countries are physician-driven. Such markets (like Germany and France) represent the largest market globally in size and potential, Teva needs to consider some efficient entry strategies. The same refers to the big Asian markets that are pretty much cost reliant. The success of the company is due to a great extent to the unbeatably low cost strategy that Teva is using. Therefore the company needs to target emerging markets since they will give it access to cheap resources and would give Teva the opportunity to decrease its costs, and thus becoming more competitive to its rivals, providing the same quality of its products but at much more attractive prices. The company is facing a very serious question related to its future performance: whether to focus on generic pharmaceutical production or to invest in innovative drug development.