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<p align="justify">Celgene is a biopharmaceutical company based in the United States. The company&#8217;s core products are research-based cancer and immunology drugs. The most important drug is used to treat multiple myeloma. The company was incorporated in 1986 and is headquartered in Summit, New Jersey. The company was acquired by Bristol Meyers Squibb (BMS) in 2019 and is now the wholly-owned subsidiary of the BMS; this has strengthened the company&#8217;s position in the industry (BMS, 2019). BMS is one of the largest pharmaceutical companies globally; the company has reported revenue of $39.9 billion until September 2020 and is ranked at 115th place on the Fortune 500 global companies list (Fortune, 2020). The company is at the forefront of innovation and improving quality of life along with curing acute diseases. Porter&#8217;s five forces model is a useful tool to assess the threat and opportunities BMS faces and adapt to the dynamic market changes proactively.</p>
<h2>Competitive Rivalry in the Market</h2>
<p align="justify">The pharmaceutical industry is in a perfect competition state, and there is fierce competition for market acquisition and retention. Usually, companies sell similar products and use marketing, as any other for-profit companies, to acquire customers. In the industry, the market leaders with influence are dubbed as &#8220;Big Pharmaceutical&#8221; companies, and BMS is one. The industry is dynamic, and evolution is a necessity for growth. BMS competes with the industry giants such as Novartis, Pfizer, J&;J and Merck. In the 2019 financial year, BMS reported consolidated revenue of $26.1 billion, a 16 % year on year increase, and earned a net profit of $3.4 billion (BMS, 2021). In 2020, Novartis recorded revenue of $48.6 billion with a profit of $8.1 billion (Forbes, 2021). Pfizer earned a profit of $9.6 billion and revenue of $47.6 billion in the 2020 fiscal year, a breakthrough year for the pharmaceutical industry (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). In 2020, Merck reported $20 billion with a profit of $2.3 billion (Forbes, 2021). The pharmaceutical industry is highly competitive.</p>
<h2>Threat of Substitutes</h2>
<p align="justify">The threat is always high when there are more options for the consumer to choose from, and the alternative is better in quality. There are many alternatives to the products developed by the pharmaceutical industry; their main substitute is homoeopathic and other alternative medicines, which vary from region to region. The industry has immense importance in society, and it is an important part of the modern healthcare infrastructure. However, alternative medicines have also been in society for centuries and can act as a natural alternative. It comes down to regional preferences and personal beliefs. Surprisingly, Complementary and Alternative medicines are increasingly accepted in Western countries (Coulter &; Willis, 2004). Despite the rise in alternative medicine, especially in pain management and therapy, allopathic medicine is still the most effective treatment method in most cases. Alternative medicine is effective and practised across the globe. As of now, the threat of substitutes remains low to moderate.</p>
<h2>The Threat of New Entrants</h2>
<p align="justify">The threat of new entrant is perceived to be high when there are supportive regulatory environment, more competition and access to financing. There are other inherent barriers associated with new entrants in the pharmaceutical industry, such as regulations, patent requirements, and the associated high cost of research and development. There are layered compliance requirements for companies to comply with, and there is a huge cost involved; these requirements are in place to protect the public&#8217;s interest at large. If the product is being developed or marketed in the USA, then there are strict FDA reporting requirements with strict deadlines (Talbot &; Nilsson, 1998). There is significant research and development cost that has to be incurred to develop new drugs; additionally, companies may need to acquire new technology to stay competitive. Therefore, despite the competition, the threat of new entrants remains moderate.</p>
<h2>Bargaining Power of Buyers</h2>
<p align="justify">The consumers&#8217; power depends upon the underlying factors, including consumers&#8217; concentration, the importance for the business, and competition. There are plenty of options available for consumers to buy from the market; however, consumers might be reluctant to buy a drug with a similar chemical compound from another brand due to the importance of medicine. Medicine prescriber, licensed practitioners, plays a vital role as their approval gives the consumer confidence to purchase certain brands. Therefore, mild brand loyalty exists, and it can be further strengthened by providing quality drugs. 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>Bargaining Power of Supplier</h2>
<p align="justify">Suppliers&#8217; power depends upon certain underlying factors, including the importance of suppliers&#8217; goods, suppliers&#8217; concentration, and the nature of suppliers&#8217; product and the risk of integration. The major supplies in the pharmaceutical industry are specialized equipment, the raw material required for the production and experienced human resources. There are many vendors available across the globe for the supply of equipment, and globalization has made purchases easy. The raw material used is a commodity in the chemical industry, and therefore, there are many available vendors to acquire the required materials. It also mitigates overreliance on the suppliers and 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>References</h2>
<p>BMS. (2019). News. Bristol-Myers Squibb Completes Acquisition of Celgene, Creating a Leading Biopharma Company. Available at: https://news.bms.com/news/corporate-financial/2019/Bristol-Myers-Squibb-Completes-Acquisition-of-Celgene-Creating-a-Leading-Biopharma-Company/default.aspx<br />
BMS. (2021). Investors. Financial Reporting. Annual Reports. Available at: https://www.bms.com/investors/financial-reporting/annual-reports.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 />
Forbes. (2021). EMD Group. Available at: https://www.forbes.com/companies/emd-group/?sh=3ad9fb701a97<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. (2020). 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 />
Talbot, J. C. C., &; Nilsson, B. S. (1998). Pharmacovigilance in the pharmaceutical industry. British journal of clinical pharmacology, 45(5), 427-431.<br />
Tomlin, B. (2009). Impact of supply learning when suppliers are unreliable. Manufacturing &; Service Operations Management, 11(2), 192– 209.</p>
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