Value chain disruption and migration is occurring at increasing rates across industries. Many observers point to the Internet and on-line technology as a root cause.
It’s easy to see why. The Internet has driven major disruptions in business, fundamentally reshaping the competitive landscape in sectors as diverse as financial services, retailing, and commodities. And despite the recent downturn in Internet stock valuations, the transforming impact of the Internet continues to provide advantages to those quickest to decide and act on the new opportunities and risks.
But several forces are acting to change the value chain equations. Indeed, those industries that have been spared much of the impact of Internet and on-line technology may nevertheless find themselves facing tremendous upheaval. In our next Executive eBriefing, Value Chain Disruption – Are You Prepared?, SDG will examine one such sector. The biopharmaceutical industry is undergoing sweeping change, but most of the change is driven by forces other than the Internet.
Today, only a few large firms can afford to do it all in pharmaceuticals – very different from the model of a few years ago when worldwide scale and efficient, fully integrated conversion were the keys to success. Players that formerly participated in the whole value chain are staking out spaces they can defend, and shedding non-core technology and IP. New entrants emerge constantly, focused on ever-more narrow slices of the value equation. Some players are abandoning R&D to focus on sales and marketing. Development is becoming a commodity, but planning it right is necessary for it to be a competitive advantage.
Our examples draw from SDG’s extensive experience consulting to the biopharmaceutical industry. Our framework for understanding the strategic implications of major value chain disruption, however, can be applied to any sector where is it necessary to develop strategies that mitigate risk and maximize the upside in these dynamic times.
Speakers
Jerry Cacciotti, managing director of SDG’s Life Sciences practice, has led several of the top 10 global pharmaceutical companies through significant transformations.
Robin Arnold, SDG’s CEO, is a founding partner and director of the London office and focuses on strategies for pharmaceutical, consumer electronics, and advanced materials.