Roche SWOT Analysis

Roche is a Swiss based, health care company in service around the globe having its head quarter located in Basel. It was established in 1896. Primarily it was recognized for vitamin production but nowadays it is has a wide scope of pharmacy and diagnostics.

Strengths

• Roche is among the top non mega merged a company as far as their market share is concerned.

• The total revenue of 47.47 billion Swiss Francs is held by the company.

• 80,000 employees including 25, 00 scientists are associated with Roche group around 150 countries.

• Almost 20 % share within diagnostic companies.

• Amongst biggest producers and second largest company utilizing biotechnology (Humer, 2005).

• Their two divisions, pharmacy and diagnostics working under one command add up to their efficiency by improving the decision making power and analyzing the product at every step.

• Customized and different medications remains them stand in the tough competitive environment.

• Marketing resources are efficiently utilized.

• By acquiring American biotech company Genetic and Japanese company Chugai pharmaceuticals, Tucson and Ventana, exclusive marketing for their products has been made possible.

• Pays full attention to value strategy i-e, oncology products rather that volume strategy like generic products and this sole strategy helps them move forward successfully.

• They have distinctive innovation model operational for their stability by working in both pharmacy and diagnostics circles effectively incorporating external vitality.

• Cash flow of the company being smooth at 14.1 billion Swiss francs, an acceptable profitability increase of 4% was gained that is 8.9 billion Swiss francs in 2010 compared to last year 11 % being attributable to the stakeholders.

• SIX Swiss exchanges has its shares listed on it.

• European Federation of Pharmaceutical Industries and Associations (EFPIA) have given its full membership to Roche Limited.

Weaknesses

• The company has been engaged in vitamin price fixing, on and off and has been paying the huge penalties for it but this unhealthy activity is still preferred rather than strong competition in the market.

• Some drugs that are patent to Roche e.g. Taimiflu are massively produced in the first world countries and are not distributed efficiently in the third world countries as in the case of bird flu, thus not fairly utilizing its patent or licensing (Humer, 2005).

• High internal pressure of cost adversely affects the development activities going on.

• Delayed online feedback system and lack of marketing expertise.

Opportunities

• The company is on the way to start the joint research venture in collaboration with Innovative Medicines Initiative and the European Commission.

• Research and development is not confined to premises, collaborative researches and academic projects are also being assisted.

• Significant budgets are being set for research and development along with sales and marketing for the introduction of new diagnostic techniques in the market (Hearing, 2005).

• The diagnostic system provided by the Roche group is the best in the world and is very liable in early diagnostics leading towards early stage treatments.

Threats

• Comparatively they are holding a limited space in pharma business, so to keep pace with market they are mandatory to produce non generic and off patent products.

• The rates of the drugs are too high especially in the cage of generic drugs which promotes copying of the brand for the people of those countries which could not afford the real brand.

• A number of competitors in the market including Abbot, Siemens, Sanofi Aventis etc.

Reference

• Humer, F B. (2005). Market dynamics in health care industry: The relevance of Roche strategy in current market. Road Shadow Zurich.

• Humer F.B. (2005). Market dynamics in health care industry: The relevance of Roche strategy in current market environment. Bank am Bellevue.

• Roche posts solid results in (2010). Retrieved from http://www.philstar.com/Article.aspx?articleId=655304&publicationSubCategoryId=66 Accessed: 26th Feb 2011.

• Hearing, R. (2005). Roche Finance report 2010.F Hoffmann La Roche Ltd. Retrieved from: http://www.redherring.com/Article.aspx?a=14507&hed=Roche%2C+Gilead+End+Tamiflu+Feud. Accessed: 26th Feb 2011.