Five Porter Forces in South American pharmaceutical markets under government regulation

¶ … Porter Forces

It is a fact that many of the South American continent's governments (such as Venezuela) are antithetical to a free market. Porter's Five Forces are based upon a model of pure competition. The one country that is closest to this model is Brazil. Therefore, the entry point for this author's marketing strategy must be Brazil. This is the best way to cut through the knot of government. By using Brazil as an entry point, entry can they be gotten to the closed markets that Brazil has relations with (World Bank 2010).

The Five Porter Forces:

By lessening the power of governments to intervene in the economy, we will increase the power of the supplier which is us. The lack of government backed companies in the market will prevent backward integration and reverse engineering of our products because of our advantages of economy of scale. This will increase the power of our present position up from moderate by more aggressive pursuing a Brazilian trade portal (Quick MBA 2010).

Unfortunately, we can not have everything in our favor. If the market is free, this increases the threat of new entrants. The demand for new orthopedic products is high due to developments in orthopedic surgery and the market is currently exhibiting a strong growth in some south American countries such as Brazil. To combat the threat of substitutes, we will have to buy small companies that are pioneering new, innovative products that would give them a competitive edge. Orthopedic surgeons wishing to adopt a new procedure need to spend time developing it,. Our intervention would obviate this, dropping the threat of smaller competitors. Competitors who are large health care companies will require merger. Product differentiation will remain high but will decrease as we acquire these companies' products (ibid). Our dominance of the Brazilian market will assure us a commanding position.

Now, we must analyze the Brazilian orthopedic market. The country's successful, market driven social security program will assure pension protection for the elderly. As such, a stable, long-term market exists and justifies our decision to focus on orthopedic products, focusing on elderly needs. Obviously, the acquisition of the endorsement of a world-renowned orthopedic spine surgery specialist can not but help expedite our entry into and dominance of the Brazilian market. The issue is now one of penetrating the rest of the market. Brazil would be a good portal to a huge South American market in a country of over 100 million people. The medical tourism angle is very big in Brazil at this time and should be explored fully. People with money to fly but who can not afford the surgeries or medical intervention in the United States would be attracted to warmer climates that would speed their post-op recoveries (Online Medical Tourism 2010).