Assignment:
QUESTION 1:
Re: Do you think Genzyme's focus on orphan drugs make sense? What are some of the risks to doing this?
Genzyme's focus on orphan drugs do make sense because of Genzyme's success and ethical behavior. Genzyme made drugs for rare diseases and for a small population. In addition, there were less competitors and Genzyme saw an opportunity. Genzyme didn't rely on big pharmaceutical companies for capital resources, marketing and distribution assets, and manufacturing capabilities. Genzyme remained independent and earned the full revenues. The company entered into side ventures to generate revenues for researching. Some of the risks of doing what Genzyme did are: Having no support of large pharmaceutical companies can lead to the company doing its own testing, sales and manufacturing.
Re: Do you think Genzyme's focus on orphan drugs make sense? What are some of the risks to doing this?
I think it very risky for Genzyme to put all their cards in one product. What if another company comes along and make a better orphan drug than they do. They are going to make there R&D department run 24\7 to make a new product so they won't lose any money. For an extreme case what if an orphan drug comes in illegally and start undermining Genzyme whole orphan drug market. If the US can't stop drug cartels from bring in pounds of drugs in. They won't stop illegal orphan drugs from coming in either. For that to happen there has to be a high reward for such a high risk. Also they have to take into effect the different technology that comes out for drugs and have to keep up with for there own drugs. If not some else can come in with new technology for orphan drugs and take away the market away from Genzyme
QUESTION 2:
Re: Genzyme focus's on orphan drugs. What affect does this have on (1) the competition it faces, (2) the bargaining power of its customers, and (3) the types of resources it needs?
The Orphan Drug Act provides seven years of market exclusivity to a company that markets an orphan drug. As a result, it will lead to a company earning a rate of return that will result as an attraction for ventures. The Orphan Drug Act will prevent competition in the market. It affects customer's bargaining power because the customers won't have many options to go for as orphan drugs will be held single-handedly by a company and the consumers will have no choice but to buy it from that company. Since Genzyme was making drugs for a smaller population, smaller clinical trials were needed and only some specialized physicians were able to do that. Genzyme relied on the two resources namely physicians who had specialized in rare diseases and smaller clinical trials.
Re: Genzyme focus's on orphan drugs. What affect does this have on (1) the competition it faces, (2) the bargaining power of its customers, and (3) the types of resources it needs?
Genzyme highly reduces the degree of competition it faces. A lot of pharmaceutical companies R and D are not pursuing orphan drugs because of the small market. Say if a company succeeds in to tap in the orphan drug market they are shielded from competition in the US for seven years. The market is seen as underserved and the drugs provide an alternative to debilitating pain or death. Genzyme's consumers have very little bargaining power and that means insurance companies have little incentive to wield their bargaining power.
QUESTION 3:
Re: Identify some of McDonald's core competencies. In the context of coffee, explain why you think McDonald's does or does not have dynamic capabilities.
McDonald's core competencies include providing food at a competitive prices and to provide customers with best possible value for their money spend. McDonald's is known for its food first and then for the beverages that it serves. In competing with Starbucks and Dunkin' Donuts, McDonald's have come out with drinks like Pumpkin Spice Lattes and Chocolate Chip Frappes and have moved away from its core business of food. McDonald's have a dynamic capability to change according to the competition, but they are still lacking in making drinks that will attract consumers rather than prove as a distraction.
Re: Identify some of McDonald's core competencies. In the context of coffee, explain why you think McDonald's does or does not have dynamic capabilities.
I think McDonalds does not have a dynamic capabilities. They see the dollar signs that Starbucks and DD are making and they want to tap into that market. To does so they want to pour it down the consumer throat until they like. They don't see that they need to change things. There main focus it to give cafe coffee to people no matter what. Their core competencies is fast food. People that work on the go and need a quick bite to eat will go to McDonalds. That is what their goal was when they start and it made them major projects because of that. If they stick to this they will go on forever or until the world goes on a massive health kick.