<p style="text-align: justify;">Bristol-Myers Squibb (BMS) is a global biopharmaceutical company based in the United States. It was founded in 1887 and is headquartered in New York City, New York, USA. The company manufactures prescription medicines for several conditions, including cancer, HIV/AIDS, psychiatric disorders and cardiovascular disorders.</p>
<p style="text-align: justify;">BMS is the largest US-based company and is regularly featured on the fortune 500 companies list. The company has set itself a mandate for sustainable development, and it marks its performance against it. It has a patient-centric approach and invests in Research and development to manufacture drugs in a sustainable manner (BMS, 2019).</p>
<p style="text-align: justify;">The firm is at the forefront of innovation and improving quality of life and curing acute diseases. Porter&#8217;s five forces model is a useful tool for assessing the threat and opportunities BMS faces and adapting to the dynamic market changes proactively.</p>
<h2 style="text-align: justify;">Competitive Rivalry in The Market</h2>
<p style="text-align: justify;">There is a highly competitive rivalry among competitors to acquire and retain customers. The market is in the perfect state of competition, and there is a lack of product differentiation. Therefore, companies keep their Research a tightly guarded secret due to its potential to give them a competitive advantage. The industry has a dynamic nature, and firms need to be innovative in their solutions in terms of effectiveness to remain competitive. BMS&#8217;s major competitors are Novartis, Pfizer and Johnson and Johnson (J&;J).</p>
<p style="text-align: justify;">In 2020, BMS had reported a revenue of $42.5 billion, an annual change of 62.6% and was ranked 75 in the Fortune 500 global companies list (Fortune, 2021). Novartis recorded revenue of $48.6 billion in the same fiscal year with a profit of $8.1 billion (Forbes, 2021). Pfizer reported a profit and revenue of $9.6 billion $47.6 billion, respectively, in 2020 (Forbes, 2021). J&;J is the fourth largest US pharmaceutical company based on revenue; it earned $14.7 billion and reported $82.6 billion in 2020 (Forbes, 2021). The pharmaceutical industry is highly competitive.</p>
<h2 style="text-align: justify;">Threat of Substitutes</h2>
<p style="text-align: justify;">The threat of substitute is moderate to low in the pharmaceutical industry. Among many alternatives available for the products offered by the industry, the main substitutes are homoeopathic, and other alternative medicines; these products exist in different form throughout the world. Allopathic medicines are the modern miracle and are an important part of the modern healthcare infrastructure, and their non-existence is impossible to think about.</p>
<p style="text-align: justify;">However, alternative medicines existed for centuries and are a steppingstone, for now, new-enhanced researched-based drugs; therefore, there can be a natural substitute. The acceptance of these alternative treatments comes down to regional preferences and personal beliefs. Surprisingly, Complementary and Alternative medicines are increasingly accepted in Western countries (Coulter &; Willis, 2004). Despite all the benefits, allopathic medicines are the prevalent form of drugs used for treatments. As of now, the threat of substitutes remains low to moderate.</p>
<h2 style="text-align: justify;">The Threat of New Entrants</h2>
<p style="text-align: justify;">The threat of new entrants is perceived to be moderate at best. There are serious caveats associated with the business in the pharmaceutical industry. The most important is the strict regulatory compliance; the drugs have to go through phased trials and a cumbersome approval process. It also requires strict adherence to testing and manufacturing standards before a new drug can be used in the general population (Dickson &; Gagnon, 2009).</p>
<p style="text-align: justify;">The other major barrier to entry is the high research and development (R&;D) cost; companies require to spend a significant amount on R&;D. The time from development to market is significant, and therefore, the company&#8217;s investment is returned slowly initially. Moreover, companies may need to acquire new technology and incur cost to stay competitive. Therefore, despite the competition, the threat of new entrants remains moderate.</p>
<h2 style="text-align: justify;">Bargaining Power of Buyers</h2>
<p style="text-align: justify;">Consumers are perceived to have moderate bargaining power in the pharmaceutical industry. Due to high competition, a patient can buy medicines from any company; however, generally, patients are reluctant to buy medicines from different brands without the consents of their doctor. This makes doctor, the medicine prescriber, indirect consumer for the pharmaceutical companies. Their prescription of certain drugs gives the consumer confidence and satisfaction. Therefore, mild brand loyalty exists in the industry, and it can be capitalized by ensuring drugs quality. Companies need to create brand equity in the competitive market, and these factors affect brand equity: brand loyalty, brand awareness, and perceived quality parameters (Panchal et al., 2012). Considering the above factors, consumers have moderate to high bargaining power depending upon circumstances.</p>
<h2 style="text-align: justify;">Bargaining Power of Suppliers</h2>
<p style="text-align: justify;">Suppliers have moderate bargaining power in the pharmaceutical industry. The important inputs are in the form of specialized equipment, raw material and domain expert human resources. The required raw material is a commodity in the chemical industry and is easily accessible. There are many suppliers those supplies the required equipment and globalization has made it easy for manufacturers to buy equipment from across the globe.</p>
<p style="text-align: justify;">The availability of multiple sources reduces the dependency on a single source, and it is an effective strategy to do so (Tomlin, 2009). The experts such as specialized researchers and innovators are not in high supply, and their unavailability can disrupt the whole operations; therefore, they can exercise high bargaining power. Overall, suppliers hold low to moderate bargaining power.</p>
<h2 style="text-align: justify;">References</h2>
<p style="text-align: left;">BMS. (2019). About us. Sustainability. Available at: https://www.bms.com/about-us/sustainability.html<br />
Coulter, I. D., &; Willis, E. M. (2004). The rise and rise of complementary and alternative medicine: a sociological perspective. Medical Journal of Australia, 180(11), 587-589.<br />
Dickson, M., &; Gagnon, J. P. (2009). The cost of new drug discovery and development. Discovery medicine, 4(22), 172-179.<br />
Forbes. (2021). Johnson &; Johnson (JNJ). Available at: https://www.forbes.com/companies/johnson-johnson/?sh=252c74f34f91<br />
Forbes. (2021). Novartis. Available at: https://www.forbes.com/companies/novartis/?sh=2d1d544c3b80<br />
Forbes. (2021). Pfizer (PFE). Available at: https://www.forbes.com/companies/pfizer/?sh=435c75072d6b<br />
Fortune. (2021). Bristol-Meyers Squibb. Available at: https://fortune.com/company/bristol-myers-squibb/fortune500/<br />
Panchal, S. K., Khan, B. M., &; Ramesh, S. (2012). Importance of ‘brand loyalty, brand awareness and perceived quality parameters’ in building brand equity in the Indian pharmaceutical industry. Journal of Medical Marketing, 12(2), 81-92.<br />
Tomlin, B. (2009). Impact of supply learning when suppliers are unreliable. Manufacturing &; Service Operations Management, 11(2), 192– 209.</p>