Environmental Analysis

Genentech Environmental Analysis

Company Profile

Genentech is a biotechnology company specializing in developing and manufacturing drugs by using human genetic information. Over the years the success of Genentech is attributed to its research based new evolutionary products and the company’s ability to employ and hold the best brain in the industry. In 2007 it is ranked as the 31st best company to work for by the Fortune Magazine (Genentech, 2007). The company focuses on four main categories вЂ" Oncology, Immunology, Vascular medicine and Specialty therapeutics.

Some of the most popular products of Genentech are Rituxan вЂ" a drug for treatment of non Hodgkin’s lymphoma and Avastin a drug for lung and colorectal cancer. These drugs contributed around one billion in revenue last quarter. (Aaron Smith, 2007)

Key Segment Determinants

Biotechnology segment of the pharmaceutical industry is a highly competitive with relatively shorter life cycle of products and high cost of product development.

The segment has become more demanding due to compressed molecular identification and increased marketing expenses on the part of competitors.

Macro Environment Overview

Healthcare organizations are one of the most integrated organizations in the present corporate world. The number of stakeholders and their influence is far greater in healthcare industry than any other. The obvious reason for it is that it touches every citizen’s life and government sees its duty to provide a viable healthcare option to all its subjects.

According to US Department of Labor estimates by 2010 healthcare sector will be among the top ten fastest employment providing sector and it will grow by 25 percent and adding 13.3 million jobs in the process (Louise Kursmark, 2005).

With such high growth and strong influence of stakeholders pharma companies are not only responsible to its shareholders but society at large. Secondly government policies play an integral part in determining the future of the industry rather than free market mechanism.

Macro Economic Factors which can determine the Success of a Drug

In true sense the industry is less dependent upon macro economic factors but more on internal factors as internal innovation and research is the one that create new market than a macro economic trend.

The patent law, intellectual property right and health cover policies often determine the choice of drugs by customer rather than the quality of the product itself. For example if a drug is listed under Medicare than it has high probability of success than another which is not.

Competitor Analysis

The main competitors of Genentech in the biotechnology field are вЂ" Amgen, Bristol-Myers Squibb, Biogen and GlaxoSmithkline. In terms of sales last quarter Genentech