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Ways that Alliances that are Strategic Assists Pharmaceutical Companies
For many years, the industry of pharmaceuticals has led progress that is therapeutic through drugs that are innovative that have been changers of the game in the society. The emergence of new options of treatments that is revolutionary in various areas that are therapeutic comes with a price. Companies have been making huge investments in the past years, and research institutions in the world spending more money for the same. It is clear that the pharmaceutical industry is leading when it comes to spending on research and development.
Despite the investments that are heavy and a compound growth that is annual, the sector is facing a number of challenges that can shake up the mission. Productivity that is poor, a strategy of drug dependency and market conditions that are difficult are some of the main challenges that industries that are pharmaceutical need to deal with. A person at this point may be wondering the role that alliances that are strategic can play in this period that is challenging for companies that are pharmaceutical.
An alliance that is strategic is a cooperation that is essentially strategic for the firms that are involved. In general, they are bilateral and can include both companies that are competing and the ones that are not competing. There is a limited collaboration between the firms in scope to a given project. There are three main types of alliances that can be clearly identified. The first alliance is co-integration where the alliance is between competitors that collaborate so that they can make economies of scale in stages that are early in the process of production. In general, they are limited to activities or the product component that is used in production.
The second form of an alliance is pseudo-concentrations where companies that are competing for work together so that they can develop, produce, and market a product that is common. In the traditional days, this form of an alliance is always between firms in the industry that is the same. The alliance normally covers the entire chain of marketing, distribution, and production and a single product that is common between the competitors is placed in the market. The alliances include firms whose contributions and skills are not the same as nature. In many cases, they are alliances where one of the firms has come up with a service or product that is commercialized through the network of other companies. The pharmaceutical companies are utilizing alliances that are strategic all along the value chain.
There are a number of benefits that pharmaceutical companies will get out of an alliance that is strategic. One of the benefits is that it is less expensive when a comparison is done with acquisition and leads to avoiding issues of integration of acquisition and mergers. It leads to the creation of opportunities for learning and also the transfer of skills and also results in strengthening the positions that are competitive in the industry. Lastly, it leads to the creation of an option that is strategic to the future of the companies.

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