Case study in Strategy- Teva analyzing the company and suggesting strategy for future growth and new markets

1. As the CEO of Teva, which markets would you
concentrate on developing going forward?

2. Introduction
• Decisions case
• Decision options: focus on US market and the
other generic markets, expanding into the
global branded markets, or gradually turning
into specialized generics or innovative
pharmaceuticals
• Criteria: value creation, utilizing company’s
strengths, aligned with their core values

3. Teva's Core Values and
Strengths
• A focused firm, not a conglomerate
• Global company
• Cost leadership advantage
• Large market shares
• Close relation to academic institutions
• Taking risks but not ones that risk the entire
company
• Experienced at pharmacy driven markets

4. Market segments
• Geographical: US, Western/Eastern
Europe, Japan, Latin America, Asia
• Physician driven vs. pharmacy driven
• Product type: commodity generic, niche
generic, biosimilars or innovative

5. The Way Forward…

6. 1. Keeping up the generics market in
US and Europe (40%)
• Accounts for the core of sales.
• Pharmacy driven markets experience
• Very good at filing ANDA in the USA.
Paragraph IV and exclusivity period provides
higher margins.
• Debt crisis in Europe has governments looking
for places to cut costs (e.g. generics)
• Similarly, in US people are looking to cut costs.

7. 2. Introducing Biosimilars and Niche markets
to Latin America and Eastern Europe (40%)
• Already has a specialty division that expects high
growth rates (Ivax)
• Less competitive than generics, higher entry
barriers, higher gross margins, closer to innovative.
• US market regulatory barriers
• Price erosion within generics market in the US
• Competitors in Europe expanding
aggressively, important to get in the market before
it’s too late
• Linkage between US and Latin America

8. 3. Pursuing the innovative
market (20%)
• Impressive success with Copaxone (blockbuster drug
accounts for 12% sales) and Azilect
• Collaborating with Israeli academic institutions in R&D -
cost advantage.
• Partnering for sales & marketing - cost advantage
(Sanofi-Aventis).
• Massive competition in generics including low cost
players like Ranbaxy (India)
• Innovative drug companies entering the generic market
and defending their patents aggressively - strategic
decision.

9. Breakdown of strategic plan
• Keeping up the generics market share in US
and Europe (40%)
• Introducing Biosimilars and niche markets to
Latin America and Eastern Europe (40%)
• Continue penetrating the innovative market
(20%)

10. How will the company logistically
handle this structure?
• Maintain global company.
• Integrate acquired companies.
• Create separate divisions for innovative and
commodity generics, as it did with Ivax for
biosimilars.

11. Closing Statements
• Healthcare industry is changing and Teva
needs to adapt in order to grow.
• Decision case based on criteria: core values,
strengths and value creation
• Angles to consider: geography, market driver,
product type.

12. Thank you