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INDUSTRY ANALYSIS ON PORTER’S FIVE FORCES

ANALYSIS
Name of Industry: Biotechnology
Submitted by:
 SATYAM (110048)
 SHIVAM SINGH (110049)
 SHIVANI SHRIVASTAVA (110050)
 SUBHAM KUMAR (110051)
 SHUBHAM SINHA (110052)
 SIDDHANT RANJAN (110053)
 SIDDHARTHA SHRIVASTAVA (110054)

A glance of Biotechnology Industry


The biotechnology sector of India is highly innovative and is on a strong growth trajectory.
The sector, with its immense growth potential, will continue to play a significant role as an
innovative manufacturing hub. The sector is one of the most significant sectors in enhancing
India's global profile as well as contributing to the growth of the economy.
India is among the top 12 biotech destinations in the world and ranks third in the Asia-Pacific
region. India has the second-highest number of US Food and Drug Administration
(USFDA)–approved plants, after the USA and is the largest producer of recombinant
Hepatitis B vaccine. Out of the top 10 biotech companies in India (by revenue), seven have
expertise in bio-pharmaceuticals and three specialise in agri-biotech.
India has no dearth of talent in biotechnology, as a number of institutions, both government
and autonomous, provide the necessary opportunities for the students seeking to obtain a
degree in this sector. The Government of India has provided adequate scope to this sector by
providing facilities for Research and Development (R&D) in the field of biotechnology
The Indian biotech industry holds about 2 per cent share of the global biotech industry. The
biotechnology industry in India, comprising about 800 companies, is expected to be valued at
US$ 11.6 billion in 2017. The government has to invest US$ 5 billion to develop human
capital, infrastructure and research initiatives if it is to realise the dream of growing the sector
into a US$ 100 billion industry by 2025, as per Union Minister for Science and Technology,
Mr Harsh Vardhan.
Biopharma is the largest sector contributing about 62 per cent of the total revenue followed
by bio-services (18 per cent), bio-Agri (15 per cent), bio-industry (4 per cent), and
bioinformatics contributing (1 per cent).
India's biotech sector has attracted a significant amount of attention over the past two
decades. Several global companies have aggressively joined hands with Indian companies
due to India's strong generic biotechnology potential.
A Network of Technology Centres and promotion of start-ups by Small Industries
Development Bank of India (SIDBI) are among the steps taken by the Government of India

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to promote innovation and entrepreneurship in the agro-industry proposed by the Ministry of
Micro, Small & Medium Enterprises (MSME) in a new scheme. The Government of India
has taken several initiatives to improve the biotechnology sector in the country as well as
offer enough scope for research in this field. The Department of Biotechnology (DBT) along
with other government-funded institutions such as National Biotechnology Board (NBTB)
and many other autonomous bodies representing the biotechnology sector are working
together in order to project India as a global hub for biotech research and business
excellence.

PORTER’S FIVE FORCES ANALYSIS

The threat of new entrant (Low):


The industry has limited competition and a low threat of new entrants. Biotech firms require
huge amounts of funding to finance their large R&D budgets. Not having ample cash is one of
the biggest barriers. Specialization also creates barriers. For instance, knowledge about cancer
and heart disease is quite high therefore there are very few experts in this field. Last but not
least it can take up to 10 years to bring a biologic drug to the market.
 Higher start-up capital requirement as well as investment intensive operation (R&D,
clinical trials etc.)
 Strict government policies

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The threat of Substitute product (Low):
 Buyers may face uncertainty or inconvenience will switching
 Existing substitute product (generics) satisfy price, value and quality expectation
 Brand loyalty really exists

Bargaining power of suppliers (Medium):


Biotech companies are unique because most of their value is driven by intellectual property.
Unlike in other industries, the nature of their business does not force them to rely on suppliers.
Scientific tools, materials, computers, and testing equipment are highly specialized but the
likelihood of these companies invading on biotech line of business is not vertical.
 Low switching cost easily available

Bargaining power of customer (Medium):


 Switching cost depends on drug (generic versus patent)
 A substitute is available for some drugs
 Buyers are fragmented with only a few influential ones (i.e. government agencies)
 Product may be a critical input
 Biotech companies are bounded by long term contracts.
 Niche speciality products have some pricing power.
Competitive rivalry (Low):
 Growth opportunities for biotechnology companies are expected to grow in the next
few years, with many products goings off-patent in the US and other countries, thus
increasing competition.
 Indian biotech companies will face competition from big companies, backed by huge
financial muscle.

Competitive rivalry among existing competitors

Indian Biotechnology Industry is considered as one of the sunrise sectors in India. The
industry can classify into five different segments.

 Bio-Pharma
 Agri-biotech
 Bioinformatics
 Bio industrial industry
 Bio service
Today in India there are more than 350 Biotechnology companies in India. Most of the
companies located in major cities like Delhi, Pune, Bangalore, Hyderabad and Chennai.

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India ranked 12th among the top 12 Biotech destinations in the world and is the third biggest
in Asia-Pacific in terms of the number of Biotech companies.

In terms of market share & capitalization we were selected top four companies in
Biotechnology industry. These companies are following:

 Biocon
 Panacea Biotec
 GlaxoSmithKline Consumer Healthcare Limited
 Bharat Biotech

Biocon: - Biocon is India’s first and largest biotechnology company that is found in 1978 by
Dr. Kiran Mazumdar. Biocon ranked 1st in Asia in terms of revenue and market capitalization
and sixteenth globally.
Panacea Biotec: - Panacea Biotec was set up in the year 1984, under the name of Panacea
Drugs Private Limited with a commitment to make Innovative Products Affordable and
Accessible to the masses. It got publically listed on Indian National Stock Exchanges in
September 1995 as Panacea Biotec Ltd.
GlaxoSmithKline Consumer Healthcare Limited: - GSK Consumer Healthcare Ltd is an
associate of GlaxoSmithKline plc. Of U.K, one of world’s largest consumer healthcare
companies. We have a heritage that goes back over 160 years. Our purpose is to help more
people around the world to do more, feel better and live longer with everyday healthcare
products.
Bharat Biotech: - Bharat biotech is a pioneering biotech company known for its world-class
R&D and Manufacturing capabilities.

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PORTER’S VALUE CHAIN OF MARINE BIOTECH

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REFERENCES

 https://www.frontiersin.org/articles/10.3389/fmars.2015.00124/full
 https://www.indianmirror.com/indian-industries/biotechnology.html
 https://india-consumer.gsk.com/
 https://en.wikipedia.org/wiki/Biotechnology
 https://www.ibef.org/industry/biotechnology-india.aspx

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