The Competitiveness of Saudi Pharmaceutical Industry Using Porter 5 Forces Analysis

Abstract

Pharmaceutical industry is a challenge in both the developed and the developing countries. If a company wants to survive, it should be able to compete well in the domestic and in the international markets. The main purpose of this paper is to examine the competitiveness of the Saudi Pharmaceutical Industry (SPI) using Porter 5 forces analysis. A questionnaire has been designed, distributed and filled up by experts from the Saudi Pharmaceutical Industry. The findings show that SPI has a favorable advantage in terms of bargaining power of suppliers, bargaining power of buyers and rivalry among competitors. However, it lacks a favorable advantage concerning threat of substitutes and threat of local and global entry. Depending on the literature and the questionnaire findings, a number of strategies were recommended to SPI companies, which can also be adopted by companies in other developing countries.

Keywords: Competitiveness, Pharmaceutical industry, Porter five forces, rivalry, bargaining power