patient in the Netherlands

V V T T E E PR P R O O PH P H Y Y LA L A X X I I S S IN I N T TH H E E

EX E X TR T R A A MU M U R R A A L L ME M ED D I I CA C A L L PA P A TI T I EN E NT T , ,

A A PO P O TE T EN N TI T IA A L L MA M A R R KE K ET T ? ?

Dissertation on the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical

patient in the Netherlands

By Angelo Siligato

V V T T E E PR P R O O PH P H Y Y LA L A X X I I S S IN I N T TH H E E

EX E X TR T R A A MU M U R R A A L L ME M ED D I I CA C A L L PA P A TI T I EN E NT T , ,

A A PO P O TE T EN N TI T IA A L L MA M A R R KE K ET T ? ?

Dissertation on the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical

patient in the Netherlands

Angelo Siligato

Student Number: 1313371

Dissertation

Rijksuniversiteit Groningen

Faculty of Business Administration

Specialisation: Marketing, International Business

First University Supervisor: Drs. H. Bos

Second University Supervisor: Drs. M.E. Boon

Supervisor Sanofi-Synthelabo: Drs. T. van der linden

Milan/Groningen, May 2005

‘The author is responsible for the content of this report; the copyright of

this report is vested in the author’

PREFACE

This report is the result of the graduation project of Angelo Siligato, and elaborates on a research on the opportunities for marketing the Venous Thrombosis Embolism (from here referred to as VTE) pharmaceuticals of the pharmaceutical producer Sanofi-Synthelabo, in the prophylaxis of Venous Thrombosis in the extramural medical patient in the Netherlands.

The research report is structured in three parts:

Part I is divided into three chapters; the first and introductory chapter of this report shortly elaborates on the background and objectives of the research. In the subsequent chapter, the elaboration focuses on the framework for the research and the resulting research-questions. Chapter 3 discusses the research design.

Part II of the report discusses the analysis and results of the research. Chapter 4 elaborates on the analyses and finally in chapter 5 the overall evaluation of the results and conclusions of the report will be presented.

As the context in which the research took place is of a very complex nature, and constitutes a great deal of specific (medical) information, a third part has been added to the report. This last part of the report concerns a registration of the backgroundstudy that was part of the research project. It is an introduction into the research subject, and aims at creating a better understanding on VTE (chapter 6), the pharmaceutical industry (chapter 7), and the market for prescription drugs in the Netherlands (chapter 8). Readers from outside the healthcare industry are therefore advised to read part III of the report in order to make the rest of the report (better) readable.

In a short note, I hereby would like to thank those people who offered me the time, the means and their patience to finalise my studies through this research and the resulting dissertation. With credits for the VTE team of Sanofi-Synthelabo made up by my company-tutor Timo van der Linden, colleagues Fluer Breukel, Mark Ditmarsch and Ed Konings, and my university-tutor Rieks Bos. And with an extra credit for Fam. Ria Uiterlinden who offered me their hospitality and positive energy…

For the rest I would like to give special thanks to my parents, family, friends and lovely fidanzata, for their support and trust in me.

Angelo Siligato

May 2005

My sincere love, appreciation, and respect, goes out to them who can never fail me, my parents and family…

…and to her who is the light in my eyes.

ABSTRACT

In behalf of the marketing management of the business-unit Arterial and Venous Thrombosis of Sanofi-Synthelabo Netherlands, this dissertation deals with mapping the opportunities for the prophylaxis of VTE in the extramural medical patient in the Netherlands. This will be done in order to determine if this is a potential market for marketing Sanofi-Synthelabo’s VTE pharmaceuticals.

Objective

To assess the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient.

Research framework

The framework for this research provides a sequence of different analyses in order to deal with the uncertainty of the external environment of Sanofi-Synthelabo. It regards the analysis of the relevant external forces that can shape market opportunity and affect the marketing of VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient in the Netherlands.

The information gathering activities focus on the variety of forces interacting with customers and competitors within the larger macro environment of Sanofi-Synthelabo, and the complex pharmaceutical industry and Dutch healthcare system. Together with an analysis of the major and relevant stakeholders involved in the prescription of pharmaceuticals, this framework provides the basis for the information gathering activities and research questions.

Because of the specific role the physician plays in the process of prescribing pharmaceuticals, a large part of the activities are dedicated to the gathering and analysis of in-depth information on the GP’s. The customer analysis, focuses on the GP’s awareness, attitude, motivations and needs for extramural VTE prophylaxis in the medical patient.

Research questions

1. What major macro environmental developments or trends are relevant in, and are affecting or could affect, the pharmaceutical industry and Sanofi-Synthelabo in the context of this research?

2. What is the degree of competition in the industry for VTE pharmaceuticals, and what is the relevance for Sanofi-Synthelabo in the context of this research?

3. What position does Sanofi-Synthelabo occupy with respect to its competitors?

4. In which stage of the product life-cycle are the VTE pharmaceutical Sanofi-Synthelabo’s produces compared to their competitors and what are the implications for marketing of VTE pharmaceuticals in the context of this research?

5. Who are the relevant stakeholders and what is their importance for the prophylaxis of VTE in the extramural medical patient?

6. What is the attitude of the most relevant stakeholders towards the prophylaxis of VTE in the

extramural medical patient?

7. What are the determinants of physicians prescribing behaviour and to what extent can they influence the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient?

8. Is there awareness among the general practitioners on the risks of VTE in the extramural medical patient, and the possibility to threat them prophylactic with LMWHs?

9. What is the general practitioners attitude towards VTE prophylaxis in the extramural medical patient?

10. What is the general practitioners attitude towards extramural VTE prophylaxis with LMWHs and newer forms of anticoagulation?

11. What is the prescribing behaviour of the general practitioner concerning VTE prophylaxis in the extramural medical patient?

12. What are underlying motivations for the GP's prescribing behaviour concerning VTE prophylaxis in the extramural medical patient?

13. What are the general practitioners unmet needs towards VTE prophylaxis in the extramural medical patient?

14. What pharmaceuticals and medical devises does the GP consider or prescribe in the prophylaxis of VTE in the extramural medical patient, and why?

15. Can the market for VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient, be (sub) segmented into homogeneous groups of prospective customers?

16. If so, which segments imply attractive opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient?

17. What is the estimated current market-size and market-potential, and the projected growth, in terms of market size and absolute market potential, of LMWHs in the market for VTE prophylaxis in the extramural medical patient?

18. What major (sub) market developments or trends are relevant in, and are affecting or could affect, the pharmaceutical industry and Sanofi-Synthelabo in the context of this research?

Research design

The research is structured in two parts; a preliminary research with a mostly exploratory character (phase 1-3 of research project, part I of the report, see §1.5 & §1.6 voetnoot maken), and the primary research (phase 4 & 5 of the research project, part III of the report, see §1.5 & §1.6 voetnoot maken) that focuses on answering the research questions.

The data collection regards secondary data available from Internet, recent and relevant literature from books, academic journals and relevant research articles. Secondary data was also obtained from previous research by governmental, data and research institutes, Sanofi-Synthelabo, and the State University Groningen. Further primary data has been gathered at stakeholders and customers to arrive research questions 5-17.

The choice was made to communicate with the customers and relevant stakeholders by

means of 27 (semi-) structured interviews. This sample size was sufficient to ensure the

generalisability, the reliability and validity of the research.

Results

EMBARGO

Overall conclusion and implications

EMBARGO

Recommendations

EMBARGO

PREFACE ABSTRACT CONTENT

PART I

RESEARCH DEFENITION & APPROACH

1 INTRODUCTION ... 13

1.1 B

ACKGROUND

... 13

1.2 M

ANAGEMENT QUESTIONS

... 15

1.3 R

ESEARCH OBJECTIVE

... 15

1.4 C

ONDITIONS AND DESIRED OUTCOME

... 15

1.5 S

TRUCTURE OF THE RESEARCH PROJECT

... 16

1.6 S

TRUCTURE OF THE REPORT

... 17

2 LITERATURE REVIEW; ANALYSING MARKET OPPORTUNITY... 19

2.1 A

MARKET OPPORTUNITY ANALYSIS

;

ANALYSING THE EXTERNAL ENVIRONMENT

... 19

2.2 A

PPROACHES TO ANALYSE MARKET OPPORTUNITY

... 20

2.3 A

FRAMEWORK FOR ASSESSING OPPORTUNITY IN THE CONTEXT OF THIS RESEARCH

... 30

2.4 R

ESEARCH QUESTIONS

... 42

3 RESEARCH DESIGN... 43

3.1 M

ETHOD

... 43

3.2 D

ATA

-

COLLECTION

... 43

3.3 D

ATA

-

ANALYSIS

... 46

3.4 D

EFINITION AND INCLUSION CRITERIA OF THE

E

XTRAMURAL

M

EDICAL

P

ATIENT

... 48

REFERENCES... 49

PART II

ANALYSES & RESULTS

EMBARGO

PART III

CONTEXT OF THE RESEARCH; BACKGROUNDSTUDY

4 VENOUS THROMBOEMBOLISM ... 57

4.1 W

HAT IS

VTE? ... 57

4.2 R

ATIONALE FOR PROPHYLAXIS

... 63

4.3 R

ISK FACTORS FOR

VTE... 63

4.4 M

ETHODS OF PROPHYLAXIS⁹

... 67

5 THE PHARMACEUTICAL INDUSTRY ... 70

5.1 T

HE ECONOMICAL POSITION OF THE PHARMACEUTICAL INDUSTRY

... 70

5.2 T

HE

P

ATENT

S

YSTEM

... 71

5.3 P

RODUCT RESEARCH

,

DEVELOPMENT AND INNOVATION

... 72

5.4 M

^EDICINE

R

ESEARCH IN THE

N

^ETHERLANDS

... 75

5.5 H

EALTH ECONOMICS

... 76

5.6 R

EGULATION IN THE PHARMACEUTICAL INDUSTRY

... 76

5.7 P

HARMACEUTICAL COMPANIES

... 77

5.8 G

LOBAL TRENDS IN THE PHARMACEUTICAL INDUSTRY

... 78

6 THE MARKET FOR PRESCRIPTION PHARMACEUTICALS IN THE NETHERLANDS 80 6.1 C

HARACTERISTICS OF THE MARKET FOR PRESCRIPTION PHARMACEUTICALS

... 80

6.2 G

OVERNMENTAL POLICY REGARDING THE MARKET FOR PRESCRIPTION DRUGS

... 83

6.3 P

ARTIES INVOLVED IN THE MARKET FOR PRESCRIPTION PHARMACEUTICALS

... 84

6.4 T

HE

D

UTCH HEALTHCARE SYSTEM

... 91

REFERENCES... 96

LIST OF TERMS & ABBREVIATIONS

APPENDIXES

PART I

RESEARCH DEFINITION AND APPROACH

1 INTRODUCTION ... 13

1.1 B

ACKGROUND

... 13

1.2 M

ANAGEMENT QUESTIONS

... 15

1.3 R

ESEARCH OBJECTIVE

... 15

1.4 C

ONDITIONS AND DESIRED OUTCOME

... 15

1.5 S

TRUCTURE OF THE RESEARCH PROJECT

... 16

1.6 S

TRUCTURE OF THE REPORT

... 17

2 LITERATURE REVIEW; ANALYSING MARKET OPPORTUNITY... 19

2.1 A

MARKET OPPORTUNITY ANALYSIS

;

ANALYSING THE EXTERNAL ENVIRONMENT

... 19

2.2 A

PPROACHES TO ANALYSE MARKET OPPORTUNITY

... 20

2.2.1 Formal models of market opportunity and environmental analysis ... 20

2.2.2 Procedural / sequential approaches for MOA... 26

2.2.3 Discussion ... 30

2.3 A

FRAMEWORK FOR ASSESSING OPPORTUNITY IN THE CONTEXT OF THIS RESEARCH

... 30

2.3.1 Market & product definition... 32

2.3.2 Macro-environmental analysis ... 33

2.3.3 Analysing industry dynamics and strategic change... 34

2.3.4 Stakeholder analysis... 35

2.3.5 Customer analysis ... 35

2.3.6 Competitor analysis... 38

2.3.7 Market segmentation ... 39

2.3.8 Market analysis; market measurement & estimating demand... 39

2.3.9 Market trends and developments... 41

2.3.10 Evaluating market opportunity ... 41

2.4 R

ESEARCH QUESTIONS

... 42

3 RESEARCH DESIGN... 43

3.1 M

ETHOD

... 43

3.2 D

ATA

-

COLLECTION

... 43

3.2.1 Secondary data ... 44

3.2.2 Primary data ... 44

3.2.3 The research instrument; semi-structured interviews ... 45

3.2.4 Design of the semi-structured interview ... 45

3.2.5 Testing the research instrument ... 46

3.2.6 Sampling method and sample size ... 46

3.3 D

ATA

-

ANALYSIS

... 46

3.3.1 Overcoming data quality issues... 47

3.4 D

EFINITION AND INCLUSION CRITERIA OF THE

E

XTRAMURAL

M

EDICAL

P

ATIENT

... 48

REFERENCES... 49

1 INTRODUCTION

1.1 B

ACKGROUND

Venous thromboembolism (VTE) is a major cause of morbidity and mortality in the United States and Europe. It is a common disease with an incidence of 2 to 4 per 1000 inhabitants per year in western societies

^1/2/3/4/5

. About two million Americans are believed to experience Deep Venous Thrombosis (DVT) each year, with an estimated 750,000 Europeans suffering DVT or PE

⁶

. DVT therefore is the most common cardiovascular disease after acute coronary syndromes and stroke

⁷

. VTE accounts for more deaths than breast cancer, AIDS, and highway fatalities combined

⁸

. Thromboembolic disease is possibly the most frequent cause of unexpected death among hospitalised patients, and since it is difficult to detect and diagnose, it is also one of the top disease entities leading to medical malpractice litigation.

More than a century ago, Rudolph Virchow identified a triad of factors responsible for venous thrombosis: vessel injury, stasis (immobility), and changes in the coagulability of the blood.

Precipitating or anatomic factors for thromboembolism, such as surgery, trauma, hospitalisation, or neurological disease with paralysis are examples of the first 2 factors described by Virchow. The term "hypercoagulability" was designed to identify a syndrome of abnormalities of the third factor:

coagulability of blood. Consequently, the traditional diagnosis of hypercoagulability was created for thromboembolism that occurred in the absence of precipitating or anatomic (noncoagulant) factors.

Traditional hypercoagulability generally excluded patients who were 45 years or older or who had identifiable noncoagulant risk factors

⁹

.

However, today we know that much of these so called medical patients i.e. patients with solely precipitating riskfactors such as, high immobility, age obesity, varices, malignancy and others, may also be at high risk for thromboembolic disease. In an extensive review of DVT, PE prophylaxis and treatment guidelines, and clinical trial data, Geerts et al (2001) report that among 528 medical patients who did not receive prophylaxis, 16% experienced DVT

¹⁰

. In the general medical population, the risk of deep vein thrombosis (DVT) and/or pulmonary embolism (PE) is estimated at 10%-26%. That risk increases significantly among critical care patients, and those with a history of congestive heart failure, myocardial infarction, stroke or advanced malignancies.

A classical medical patient at risk for deep vein thrombosis (DVT) and PE is illustrated by the case of a 60-year-old obese patient with congestive heart failure, varicose veins and an infection on his lower limbs. Although the patient was prescribed bed rest, he did not receive DVT prophylaxis. Clearly, this patient who had heart failure and was confined to bed rest offers a classic example of a medical patient at risk for DVT and PE—yet frequently such patients do not receive prophylactic treatment. Varying concepts as to what actually constitutes bed rest may be at issue. This patient was mobile a couple of times a day. Because his mobility was severely restricted, prophylaxis for DVT and PE would have been appropriate.

In many medical cases, lack of prophylaxis is related to the subjective perceptions of the magnitude

of the problem. Because VTE is most often clinically silent, the occurrence of overt VTE among an

individual physician’s patients is perceived as rare

¹⁰

. The current rationale for prophylaxis in

medical patients is based on its efficacy, the clinically silent nature of VTE, its high prevalence in hospitalised, pregnant or puerperal patients, and its potentially disabling or fatal consequences

10/11/12/13/14/15/16

.

There is evidence that routine prophylaxis reduces morbidity, mortality and costs in hospitalised patients at risk of DVT and PE, as highlighted in national and international guidelines

10/12/13/14

. From a health economic perspective in contrast, screening for asymptomatic DVT, and its treatment, are expensive, insensitive and not cost-effective compared to routine prophylaxis in medical patients

10/12/13/14

. The healthcare- and economical benefits concerned with the prophylaxis of VTE have led to the consensus (ACCP 2001)

¹⁷

that routine prophylaxis of VTE in patients with increased risk should always be taken into account.

However, in spite of the fact that there are clear indications for the prophylactic treatment of VTE in the hospitalised (intramural) medical patient, there is no insight in the magnitude of the incidence and benefits of prophylaxis of VTE in the medical patient in the population of the general practitioner (extramural). This while medical evidence from intramural research, seems to overwhelmingly support the need for prophylactic treatment in the general medical population as well. Therefore the following two assumptions can be made.

- First, based on the medical evidence from intramural research, there is a medical rationale for VTE prophylaxis in the extramural at risk patient.

- Second, it can be assumed that there is low awareness among general practitioners (GP’s) on the risk of VTE in the extramural at risk patient and therefore the prescription of prophylactic medication and measures in their own practice is low.

The need for prophylaxis in the extramural medical patient, of course primarily, concerns limiting the risk of the patient actually getting a VTE. It however may be evident that the patient is not the only stakeholder in the extramural prophylaxis of VTE. Healthcare systems are complex environments from nature. The government, health insurers, distributors, prescribers and producers are all major stakeholders with there own interests in, and perspectives on, healthcare provision.

Producers do research and develop medication; physicians diagnose, choose and prescribe the therapy and suitable medication; pharmacists distribute the medication to the patient; the patient itself is the user of the prescribed medication; healthinsurers reimburse the therapy and medication;

and the role of the government is to regulate and control the stakeholders, and the whole process from development to prescription and to the reimbursement of pharmaceuticals.

This research is undertaken from the perspective of Sanofi-Synthelabo Netherlands, a large producer

of VTE pharmaceuticals. Based on the earlier made assumptions and the current medical evidence

for VTE prophylaxis, the business-unit Arterial and Venous Thrombosis of Sanofi-Synthelabo

assumes that a huge potential market for VTE pharmaceuticals exists. The marketing management of

Sanofi-Synthelabo therefore has great interest in assessing the opportunities for marketing their VTE

pharmaceuticals in the prophylaxis of VTE in the extramural medical patient. This constitutes

mainly those patients who do fall in the risk profile of VTE, but for whom preventive treatment with

VTE medication, does not come forward from the fact that they have or had to be hospitalised and /

or undergo a risk increasing surgery.

In behalf of the marketing management of the business-unit Arterial and Venous Thrombosis of Sanofi-Synthelabo Netherlands, this dissertation will deal with mapping the opportunities for the prophylaxis of VTE in the extramural medical patient in the Netherlands. This will be done in order to determine if there is a potential market for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient.

1.2 M

ANAGEMENT QUESTIONS

A discussion on the objective of the research, with the marketing management of the business-unit Arterial and Venous Thrombosis of Sanofi-Synthelabo, resulted in the following set of

“management” questions. The questions pertain the central objective of the research from the management’s point of view. The questions are not the research questions that will be answered in this rapport. They give an indication on the information need of the management and can be viewed as part of the background of this research.

- What opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals can be derived from analysing the external environment of Sanofi-Synthelabo in the context of the prophylaxis of VTE in the extramural medical patient via the general practitioner?

- Is there a potential market and demand for VTE pharmaceuticals, in the prophylaxis of VTE in the extramural medical patient via the general practitioner?

- If so, what are the strategic implications for the marketing of Sanofi-Synthelabo’s VTE pharmaceuticals nadroparin (Fraxiparin) and fondaparinux (Arixtra)?

1.3 R

ESEARCH OBJECTIVE

The previous digression on the background of the study constitutes the general objective of this research, which is to:

Assess the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient.

1.4 C

ONDITIONS AND DESIRED OUTCOME

There are a number of conditions that determine the research in a mainly practical way. First, there is

the time limit for the research. The primary research (data-collection and management report) will

have to be completed at the end of June 2004. Second, a preliminary background study is necessary

in order to get understanding of the context of the research problem, in particular on the medical

aspects and complexity of the pharmaceutical industry, before it is possible to commence the actual

research.

The results of the research described in this report will contribute to the decisions that have to be made on the extramural marketing policy of the business-unit Arterial and Venous Thrombosis of Sanofi-Synthelabo. In particular, concerning the exploitation of Sanofi-Synthelabo’s VTE pharmaceuticals Fraxiparin (LMWH; nadroparin), and Arixtra (Pentasaccharide; fondaparinux). The desired outcome of the research according to the management would be an evaluation of the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient.

1.5 S

TRUCTURE OF THE RESEARCH PROJECT

Structuring the research project offers an outline and creates space for moments of reflection, and a framework that can be taken as a basis to work up to the objective of the research. The research described in this report, was set up in a project with 7 phases (see figure 1.5.1).

Figure 1.5.1

Phase 1 : Orientation

⇓

Phase 2 : Backgroundstudy

⇓

Phase 3 : Development of research approach

⇓

Phase 4 : Research design

⇓

Phase 5 : Primary data-collection

⇓

Phase 6 : Analyses & results

⇓

Phase 7 : Report & colloquium

1.5.1 Phase 1

In consultation with the marketing management of Sanofi-Synthelabo, in the first phase of the research project a number of interviews with relevant departments and responsible managers and experts were held in order to formulate and clarify the research topic and define the management’s information need.

1.5.2 Phase 2

The second phase of the research constituted a qualitative backgroundstudy with an explorative character. The preliminary study aimed at framing the information need of Sanofi-Synthelabo’s management, in order to arrive at a practicable research objective and research questions.

Furthermore the backgroundstudy was conducted in order to map and gain insight in the relevant

problem areas of the research and research context (i.e. VTE and VTE prophylaxis, the

pharmaceutical industry, and the market for prescription pharmaceuticals in the Netherlands). In all

by means of a number of informal interviews with internal and external experts, a secondary data- analysis and a literature study, sufficient information was obtained to develop a suitable research approach.

1.5.3 Phase 3

In the third phase of the research project, the approach of the actual research was drawn up. The backgroundstudy from the second phase, resulted in a research objective and questions, completed by a framework of analysis. In addition, it also resulted in an explanatory registration (part III backgroundstudy) that handles the complexity of the environment and context in which the research has taken place.

1.5.4 Phase 4

In phase four of the research project, relevant literature, information, and other secondary data within Sanofi-Synthelabo has been examined in order to answer and / or sharpen the research questions. Furthermore this examination revealed to what extent further secondary and primary data was needed to fulfil the information need of the management and meet the objective of the research.

Consequently in this phase choices have been made on the method of (further) research, including the subject, type and methods of data collection, the type and design of the research instrument, and the type and methods of data-analysis.

1.5.5 Phase 5, 6 &7

The last three phases of the research project concerned the actual collection and analysis of the primary and complementary secondary data, writing down the overall conclusions of the research, and finalising and presenting the research report.

1.6 S

TRUCTURE OF THE REPORT

The research report is structured in three parts. One could say that the first part reports on phase 1, 3 and 4 of the research project, the second part on phases 5 and 6, and the last part of the report on phase 2.

In Part I, the problem definition and research approach to the problem are discussed. Part I of the report is divided into three chapters, constituting the introduction, the literature review and the research design. Chapter 1, the introductory chapter, of the report shortly discusses the background of the study, the objective and the management questions. Chapter 2 of the report constitutes a literature review on conducting a market opportunity analysis. Furthermore a framework for conducting a market opportunity analysis in the context of the research is presented, and the research questions that resulted from the review are posed. Chapter 3 is the last chapter and discusses the research design.

Part II of the report discusses the analysis and results of the research. In chapter 4 the

different analyses that were conducted in this research are elaborated and chapter 5 will give the

overall evaluation on the market opportunities that result from the analyses in chapter 4. Chapter 5 is

the final chapter of the report; it therefore also contains the overall conclusions and implications of the research. Figure 1.1, gives an overall view of the structure of the report.

As the research subject constitutes a great deal of specific (medical) information, a third part has been added to the report. Part III of the report handles the context of the research; it concerns a registration of the backgroundstudy that has been conducted in order to create a better understanding on VTE, the pharmaceutical industry, and market for prescription pharmaceuticals in the Netherlands. Chapter 6 elaborates on VTE and the prophylaxis of VTE, in chapter 7 insight in the international and national pharmaceutical industry is given. Chapter 8 discusses the market for prescription pharmaceuticals in the Netherlands.

In all part III of the report aims a creating a better understanding on the context in which the research has taken place. This in order to make the report readable for other than only experts, and introduces the reader of the report into the research subject. Besides part III also provides a profound foundation, and argumentations for the different choices that have been made during the research.

Table 1.6.1 Overall structure of the rapport

Part 1 research definition and approach Chapter 1

Chapter 2 Chapter 3

: Introduction : Literature review : Research design Part 2 analysis and results Chapter 4 : Analysis & results

Chapter 5 : Market opportunity evaluation Part 3 context of the research; backgroundstudy Chapter 6

Chapter 7 Chapter 8

: VTE prophylaxis

: The Pharmaceutical Industry

: The market for prescription pharmaceuticals in The Netherlands

2 LITERATURE REVIEW; ANALYSING MARKET OPPORTUNITY

ⁱ

This chapter will elaborate on the choice for conducting a market opportunity analysis (further referred to as MOA), in order to meet the objectives of the research and marketing management of Sanofi-Synthelabo. In the first two paragraphs, the rationale for a MOA and a number of formal models for conducting a MOA will be discussed. In the last paragraph the MOA framework for this research will be presented.

2.1 A

MARKET OPPORTUNITY ANALYSIS

;

ANALYSING THE EXTERNAL ENVIRONMENT

Companies can use a so-called market opportunity analysis to determine the feasibility of entering or expanding operations in particular markets for goods and services

¹⁸

. This is also the case for Sanofi- Synthelabo that wants to explore the opportunities for marketing its VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient. The process involves an analysis of the company’s external environment, contemplating the assessment of the market-potential and demand, the current players in the market, and the customers’ needs, in order to determine the marketing opportunities and feasibility of actually pursuing the market

ⁱⁱ

. The formal definition of the American Marketing Association of what a market opportunity analysis constitutes complies with this:

MOA: the analysis and evaluation of probable future situations by a variety of techniques to identify market opportunities that a company can profitably cultivate. It is part of the strategic analysis of the company's strengths, weaknesses, opportunities, and threats

¹⁹

.

According to Fahey (1986), the analysis of the external environment by means of a MOA has three goals

²⁰

. First of all, after an environmental analysis, one should be able to understand current and potential changes taking place in the environment. The understanding of these changes, that are taking place now, is an important guideline to anticipate the future. Second, the analysis should provide important intelligence for strategic decision-makers. All managers with market related decision responsibility have “mental models” of their markets

²¹

.

Essentially, a metal model is a set of beliefs about how various forces in markets operate to create opportunity. These models are absolutely crucial in decision making because they affect how managers interpret what they see going on in markets

²²

Too often, the mental models of individual managers can have a disastrous impact on strategy. Peter Drucker has the following pinion on this point:

i A literature review on the process of conducting MOA's revealed no previous studies applying this process to any respect of the pharmaceutical industry. Research on the process of conducting MOA's is limited to marketing literature and consists primarily of normative frameworks for analysing a market. Therefore this report can be valued for its managerial character and its contribution to the literature on conducting MOA's, as it will demonstrate how the MOA can be applied in the pharmaceutical industry, specifically in determining potential demand for prescription drugs.

ii Considering the scope of the research no internal analysis on the internal capabilities of Sanofi-Synthelabo will be performed.

A serious cause of business failure is the common assumption that conditions - taxes, social legislation, market preferences, distribution channels, intellectual property rights, and many others – must be what we think they are or at least what we think they should be. An adequate information system has to include information that makes executives question that assumption

²³

.

It is important to consider that, the primary goal of the analysis is to use the generated information in determining market opportunity. Third, the analysis should facilitate and foster strategic thinking within an organisation. ‘It should challenge the current wisdom by bringing fresh viewpoints into the organisation’

²⁰

. The environmental analysis provides a basis for organisational learning

²⁰

.

Despite the obvious importance of monitoring the external marketing environment in order to determine market opportunities, many organisations still make little attempt to do so

²⁴

. Kothler (1996) defines the external environment as ‘…the actors and forces that affect the company’s ability to develop and maintain successful transactions and relationships with its target customers’

²⁵

. The external environment’s broader macro forces comprise; political, legal and regulatory; economic and competitive; physical; socio-cultural and demographic; and, technological forces

²⁴

. Each of the actors and forces has a significant impact on the business' trading conditions. When the external environment changes companies face uncertainty: threats but also opportunities

²⁵

.

To monitor the important aspects of the external environment and to prepare for the ramifications of any changes, marketers must undertake a continual process of scanning and analysis in order to identify and assess opportunities and threats posed by the external environment. The MOA complies with this, as the purpose of conducting a MOA is to monitor and analyse the opportunities and threats posed by the external environment, its macro environmental forces, stakeholders, consumers and competitors.

2.2 A

PPROACHES TO ANALYSE MARKET OPPORTUNITY

There are different analytical approaches, models and tools available for the analysis of the external environment in the context of determining market opportunity. In this paragraph several ‘formal’-, and ‘procedural’ models will be elaborated.

2.2.1 Formal models of market opportunity and environmental analysis

2.2.1.1 O

PEN

-

SYSTEM MODEL

The recognition, that one needs to understand the environment of an organisation in order to devise a successful strategy, is visible in a shift in the view of organisations as closed systems to a view that sees them as open systems

²⁶

. This shift is illustrated by for example Harissons (1994) open system model (Figure 2.2.1). This model provides ideas and guidelines for diagnosing organisations. It takes the environment into account by acknowledging that external conditions influence the flow of outputs, affect the reception of outputs and can affect internal operations and that an organisation’s success depends on its ability to adapt to her environment and meet the opportunities posed by it

²⁷

.

The organisation in this model is viewed as an open system, in continual relation with her

environment. In this view the organisation on the one hand obtains raw materials, money, people,

and equipment, information, knowledge and legal authorisations from her environment. On the other

hand, the organisation transfers its products, services and ideas back to her environment, goals and strategies, culture, structure and behaviour and processes

²⁷

.

Figure 2.2.1

Source: Scheffers S.C.A.H., 2002

2.2.1.2 C

OMPETITIVE ADVANTAGE28/29/30/31

In his influential work on competitive advantage, Porter argued that industries should be the core unit of analysis. Based on his studies, Porter identified five major forces that determine opportunity in an industry; these forces compete in a fluctuating environment (Figure 2.2.2).

The degree of rivalry among firms in the industry

As shown in figure 2.2.2 the degree of rivalry is a function of the number of competitors, industry growth, product differentiation, and exit barriers. Of these variables, the number of competitors and industry growth are the most influential

³¹

Furthermore, industries with high fixed costs tend to be more competitive since the competing firms are forced to cut price to enable them to operate at capacity. Differentiation, both real and perceived, among the competing offerings however, lessens rivalry. Finally, exit barriers intensify competition.

The threat of new entrants

The threat of new entrants is likely to enhance competition. There are however, several barriers that make it difficult to enter an industry. There are cost related barriers; economies of scale, absolute cost advantage, and research & development costs. Economies of scale require potential entrants either to establish high levels of production or to accept a cost disadvantage. Absolute cost advantage is enjoyed by firms with proprietary technology or favourable access to raw materials and by firms with production experience. In addition, high capital requirements, limited access to

Goals & strategies Culture

Behaviour &

processes

Technology Structure

Input (resources) Outputs

ENVIRONMENT

distribution channels, customer loyalty towards existing brands and products, and government policy can act as entry barriers too. And, when strong differentiation exists, a new entrant has to come up with at least a product of equal quality at an equal or lower price, and also the switching costs of buyers to change supplier, affect industry entry heavily.

Figure 2.2.2 Porter’s model of five forces (1980)

Source: Biemans (2000), p.127.

The threat of substitutes

Substitute products, alternative product types (not brands) that service essentially the same function as the industry products, are another source of competition. Since substitute products place a ceiling on the prices that firms can charge, they affect the industry’s potential. The threat posed by a substitute depends on its price / performance trend relative to the industry’s product.

The bargaining power of customers

Customers constantly look for lower prices, improved quality, and added services, and can thus affect competition within an industry. Buyers play individual suppliers against one an other in their efforts to obtain these and other concessions

²⁹

. The extent to which buyers succeed in their efforts depends on the buyer concentration, (a few large buyers facilitate gaining concessions), switching costs (reduce the buyers bargaining power), the threat of backward integration (alleviate the need for the supplier), the number of suppliers (more suppliers increase the bargaining power), substitute products, and the products importance to buyer (the greater the importance the lower the bargaining power in absence of substitutes).

Bargaining power of customers - Buyer concentration - Number of suppliers - Substitute products

- Threat of backward integration - Switching costs to supplier

Bargaining power of suppliers - Number of customers - Supplier concentration - Substitute raw materials - Threat of forward integration - Switching costs to customer

Threat of substitutes - Functional similarity - Price / performance trend - Product identity

- Switching costs to substitute - Need for change by customers

Threat of new entrants - Economies of scale - Brand identity - Access to distribution - Government policies - Customer loyalty

- High investment requirements

Rivalry among firms in the industry - Number of competitors - Competitor concentration - Industry growth - Product differentiation - Exit barriers

The bargaining power of suppliers

Bargaining power of suppliers is the degree to which suppliers of the industry’s raw materials have the ability to force the industry to accept higher prices or reduced service, thus affecting the profits.

The factors influencing the supplier power are the same as influencing the buyer power. In this case, however, industry members act as buyers.

All together the five forces in Porters model interact to determine the characteristics and the attractiveness of an industry. The strongest forces become dominant in determining opportunities and profitability and become the focal points of strategy formulation. Porter recommended managers to learn how these forces work to create opportunity, or a lack of it, before deciding whether to compete in an industry or how to achieve a competitive advantage

²²

. Adopting the framework encourages consistency across the organisation in the way market analysis are performed and reported. It provides a checklist of data needed to analyse opportunity, and it ensures that important factors are not overlooked.

Every mental model is based on underlying assumptions, and Porter’s model is no exception. The model of Porter assumes that players in an industry (i.e. buyers, suppliers, competitors, new entrants, and substitutes) do not have common goals or interests but instead are concerned with preserving and enhancing their own interests. They rely on “relative power”, the ability of each party to affect how well the other can achieve its goals during bargaining.

Assumptions like these colour the way one looks at opportunity

²²

.

2.2.1.3 S

TAKEHOLDER APPROACH

Another approach towards identifying opportunities in an industry has its roots in the United States of the 60’s. From that moment on a growing interest emerged in managing the stakeholder as a determinant for developing strategy and creating market opportunity. The American background of the stakeholder approach may seem surprising to many, as thinking in terms of “stakeholders” is regarded as a typical European phenomenon.

The classical debate between stakeholder theory and neo-classical theory of the firm is, whether the firm should have responsibilities toward other stakeholders than owners or not.

According to neo-classical theory, firm’s sole and only interest should be profit maximisation, i.e. maximisation of stakeholders’ wealth. The stakeholder theory states that the firm also has responsibilities toward other stakeholders such as customers, personnel, financiers and community

³²

.

Systems theorists also contributed to the development of the stakeholder literature in the 1970’s.

Ackoff (1974)

³³

developed a methodology for stakeholder analysis of organisational systems. He argued that stakeholder participation is essential for system design and the support and interaction of stakeholders would help in solving many societal problems. Churchman (1968)

³⁴

also contributed by developing a system-theory to address social issues from an open-systems point of view. The system model of stakeholders emphasised participation and argued that problems should not be defined by focussing or analysis, but by enlarging or synthesising

³⁵

.

Considering stakeholders in strategic development and in determining market opportunities, really

got a foothold in strategic market management after the publication of R. Freeman’s book “Strategic

Management, a stakeholder approach” in the mid eighties (1984). R. Freeman with this publication provides stakeholders-management with a solid and analytical foundation. According to the definition of Freeman, a stakeholder is ‘…any group or individual who can affect or is affected by the achievement of the firms objective’

³⁶

. The definition of Freeman contemplates that there is a mutual influence between parties. The decisions of an organisation, influence the stakeholders, however, stakeholders can also influence the decisions that an organisation makes. This mutual relation is of crucial importance in the stakeholder approach. Without the support of stakeholders, an organisation would cease to exist

³⁶

. Owners, employees, customers, suppliers, government, community, media, unions, consumer groups, and environmental groups are all representatives of typical stakeholders.

Stakeholders can have a positive (co-operative) and a negative (treat) influence on the organisation.

According to Freeman there are two categories of stakeholders:

- Primary stakeholders their interests have a direct relation with the companies results:

- Secondary stakeholders; with indirect influence on the organisation and on whom the organisation has less direct influence

Freeman supposes that every party that is legitimately involved with the company should benefit from this involvement. Thereby, there is not a priori one party with more priority than another. That is why the stakeholder model of Freeman (figure 2.2.3) shows a two-way connection between parties. Furthermore the stakeholders involved are all of equal size, and distance from the organisations ‘black box’ in the centre of the model.

The difference between the previous models and the stakeholder model is evident. The model seems to be a more adequate representation of the environment in which the organisation takes part. A comment on the model is the fact that all stakeholders are of equal distance and importance to a company. In adapting the model to the factual environment of the organisation, nuances towards the actual representation and importance for the company can be made. For this purpose the model of Mitchell, Agle and Wood (1997) (discussed later this section) can be used. Their model takes the prioritisation of stakeholder relationships, in the context of management-decision-making, into account, to come to a more practical application of the stakeholder theory

³⁷

.

Figure 2.2.3

Source: Lemmen, van, Freek., Because Health Matters, 2003 Organisation

Integrating the interests of all relevant stakeholders in an organisation strategy is a complex process.

Freeman designed a stakeholder management process comprehends four necessary steps, for analysing relevant stakeholders

³⁶

.

- Identify the stakeholders in context of the subject at issue;

- Determine the value and importance of each stakeholder;

- Determine if the needs and perceptions of each stakeholder can be for filled effectively;

- Change company policies and priorities and (re)consider the interests of stakeholders.

With this stakeholder management process companies are offered a framework to assess opportunities and harmonise the company policy with their environment.

Practical application of the stakeholder theory

Since Freeman numerous studies have been done to further develop the stakeholder theory in order to give it more scientific value and a place in daily management literature. The central idea from stakeholder theory is that managerial choice can be a function of the ability of stakeholders to influence decision making

³⁸

(Brenner & Cochran, 1991). Mitchell, Agle and Wood (1997) expanded this idea into a typology of stakeholder salience based on how managers prioritise stakeholder relationships

³⁷

. They argue that managers pay different degrees of attention to certain kinds of stakeholders based on the type of power, legitimacy, and urgency they possess (figure 2.2.4). By including urgency as an attribute, a dynamic component was added to the process whereby stakeholders attain salience in the minds of managers. By combining these attributes they generated a typology of stakeholders.

Figure 2.2.4 Stakeholder theory

Source: Mitchell, et al., (1997), Figure 2, p874.

According to their typology, if a stakeholder possesses only one of the three attributes, they are

termed Latent stakeholders and have low stakeholder salience. If the only attribute present is power,

such stakeholders are called Dormant stakeholders; if it is only legitimacy, they are called

Discretionary stakeholders and if only urgency, they are called Demanding stakeholders.

Stakeholder salience will be moderate, if two attributes are present and such stakeholders are called Expectant stakeholders. Among the expectant stakeholders, those having power and legitimacy only are called Dominant stakeholders; those having legitimacy and urgency only are called Dependent stakeholders and those having power and urgency only are called Dangerous stakeholders.

Stakeholder salience will be high where all the three attributes are perceived by managers to be present in a stakeholder and they are called Definitive stakeholders. Further the dynamic qualities were illustrated by showing how stakeholders can shift from one class to another, when the salience of stakeholders increase/decrease by attaining/loosing one or more of the attributes. Later, Agle et al

³⁹

confirmed the model by empirically testing the theoretical model of Mitchell et al

³⁷

.

Strategic management scholars have long recognised that there are multiple stakeholders within the corporate domain, and that each stakeholder can have a profound effect on the opportunities and fortunes of the corporation. Hamel and Prahalad (1994)

⁴⁰

point out that strategic managers, today must answer to government agencies and special interest groups, as well as to customers and employees. Further, establishing long-term relations with these groups can be a key to survival in an increasingly dynamic and competitive environment

⁴¹

.

The idea of analysing stakeholders is catching on for several reasons. For one thing the methodology involves recognition of the fact that obstacles to equity, sustainability or opportunities for growth cannot be dealt with through technological means alone. When tackling strategic issues, power relations and conflicting interests must be addressed. Relations involving all "interested parties"

must be examined and alternative practices explored if blueprints for change and growth are to be grounded in reality and add up to more than pie in the sky. Stakeholder analysis also has the advantage of being a flexible, context-specific paradigm that helps focus attention on specific problems, actors and opportunities for change and growth. The reason for the extensive elaboration on the stakeholder approach lies in here as well. It will serve as a tool to deal with the pharmaceutical industry’s complexity and identification of relevant stakeholders in analysing the opportunities for marketing Sanofi-Synthelabo’s VTE pharmaceuticals in the prophylaxis of VTE in the extramural medical patient.

2.2.2 Procedural / sequential approaches for MOA

The formal models in the previous sections elaborate more on the context in which opportunities are created, that is, the environment and its market forces that influence strategy and create opportunity.

Procedural or so called sequential models can, on the other hand, be more effective the development

of information processes used to gather and organise data on external market opportunity. In this

section a number of this type of frameworks are discussed. They advocate a different combination

and sequencing of information activities in order to analyse the market opportunities and the external

environment. They are presented rather as an approach and process for gathering and organising

information on the external environment and the elements that need to be considered in the analysis

of it, then discussing the context of the forces that influence strategy and create opportunity. The

approaches discussed in this section can therefore be considered to be complementary to the models

discussed in the previous section.

2.2.2.1 M

ULBACHER ET AL

(1999)

⁴²

In his book on International marking, Mulbacher et al

⁴²

presents an approach for determining strategic direction and identifying market opportunity. According to Mulbacher the competitive position of a firm in a market depends on its distinctive competencies, that is, on the strengths of the company compared to its major competitors

⁴²

. Distinctive competencies of a firm can be determined by a comparative analysis between the company and its major competitors. This analysis should concern the success factors, that is, capabilities and resources needed by a firm to be successful and seize opportunities in a given market. Success factors can be derived from customers and major stakeholders’ expectations and aspirations as well as from present and future opportunities and treats in the environment of the market under consideration. The model advocates the following steps and analysis to be taken (figure 2.2.5):

Figure 2.2.5 Determining the firms competitive position Mulbacher et al (1999), p. 304.

2.2.2.2 A

AKER

(1999)

⁴³

Aaker (1999) in his book on strategic market management advocates an approach for determining strategy based on conducting an external analysis, which according to him are ‘the factor’s external to a business that can affect strategy’

⁴³

. The purpose of the external analysis is to monitor, identify and analyse the opportunities and threats posed by, macro environmental forces, stakeholders, consumers, competitors and suppliers. He suggests a framework that is presented as a number of steps and analyses to determine competitive advantage and potential demand.

The first step in the external analysis is the customer analysis. The customer analysis focuses on identifying the organisations customer segments and each segments motivations and

Competitive Advantage Customer and

Major stakeholders

Macro Environment

Success factors

Competitor Analysis

Internal Analysis

Distinctive Competencies

unmet needs. The analysis of customer motivations provides information needed to decide whether the firm can and should attempt to gain or maintain a sustainable competitive advantage

⁴³

. An unmet need (a need not currently met by existing products or services) can be strategically important because it may represent a opportunity to dislodge entrenched competitors

⁴³

.

The second step in the framework focuses on identifying and analysing the potential and current competitors. To determine opportunities and threats and to develop strategy it is important to understand competitors

⁴³

. Analysing the market is the third step in the external analysis by Aaker (1999)

⁴³

. It has two primary objectives, first to determine the attractiveness of the market and sub- markets. The second is to understand the dynamics of the market so that threats and opportunities can be detected and strategies adapted. The analysis according to Aaker (1999)

⁴³

should include an examination of the market size, growth, profitability, structure and trends.

The last and important step in the configuration of Aaker (1999)

⁴³

is the analysis of the macro environmental forces outside the firm that affect strategy and on which the company can have no influence. The environmental analysis is the process of identifying and understanding emerging opportunities and threats created by technological, political and regulatory, economic and demographic forces according to Aaker (1999)

⁴³

. Together the different analyses make up the total analysis of the environment external to a company, with the purpose to identify and analyse opportunities that the organisation can cultivate based on its internal sources and capabilities.

2.2.2.3 W

OODRUFF

& G

ARDIAL

(1994)

²²

Woodruff & Gardial (1994)

²²

, discuses a model for determining market opportunity based on the assumption that competitors, suppliers, and customers strive for long-term relationships, and where mutual benefit comes through co-operation. Their so-called value-exchange-model assumes that market opportunity originates in end-users, because it is their need that creates demand. These customers are linked to sellers through channels that extend back trade to customers, producers and eventually to their suppliers. Participants in distribution channels must work together to deliver value back to the entire channel through their behaviour, such as purchase, loyalty, commitment, positive word of mouth, and the like. Co-operation influences these transactions, and a model of market opportunity founded on co-operation will facilitate that effort. The value-exchange-based MOA model of Woodruff & Gardial (1994)

²²

suggests a framework for designing and implementing an external information process in identifying market opportunity, based on a combination and sequencing of information activities (figure 2.2.6).

The MOA framework of Woodruff & Gardial (1994)

²²

links together four major phases: Phase I is comprehends the analysis of the macro-environment in which the market’s value-exchange channel system operates. The purpose of this phase is to help managers learn about how market opportunity is being shaped by economic, cultural, social, technological, governmental and natural forces. Phase II of the MOA aims at identifying markets and customers with specific opportunities. This activity lays out the alternative markets within which opportunity lies. Arguably, it is the most critical phase.

For one thing, the results greatly affect the strategic implications for the identification and marketing

of target markets. For another, all other MOA phases follow from it. Phase III helps managers

understand the nature and dynamics of interactions between key participants in the market. The

information gathering activities focus on understanding the exchange and creation of value between

suppliers, competitors, channel-user and end users. Furthermore it contemplates the key process of

identifying the value customers seek in the product or service at stake. Finally phase IV of the MOA

process concentrates on evaluating opportunities in identified markets.

Figure 2.2.6 Framework for market opportunity analysis Woodruff & Gardial (1994)

²²

, p. 33.

2.2.2.4 B

OYD

(1995)

²⁹

Also Boyd (1995)

²⁹

states that a major factor in the success or failure of strategy development and strategic decision making is whether strategy elements are consistent with the realities of the firm’s external environment. According to Boyd therefore the first step is to monitor and analyse the opportunities and threats posed by the factors outside of the organisation. Boyd (1995)

²⁹

presumes a framework for opportunity analysis that is comparable with the framework of Aaker (1999)

⁴³

, and Woodruff & Gardial (1994)

²²

. The framework consists of different analyses that provide techniques to monitor and analyses the opportunities and threats posed by the company’s external environment.

The first element regards the analysis of the macro-environmental forces and competitors. According to Boyd the ability to understand potential opportunities and threats over the long-term, marketers must monitor and analyse broad trends in the economic and social environment. These include demographic, economic, technological, political/legal, and social/cultural developments. The actions and capabilities of the company’s current and potential competitors are of particular concern, and should therefore be taken into account very closely. The second element in the MOA framework of Boyd, concerns the analysis of the dynamics in the industry and the strategic change that can follow from it. The focus in this analysis should particularly be aimed at the competitive dynamics of an industry and on how competition and customer buying patterns are likely to change as an industry or product-market moves through various stages of the product-lifecycle. Analysing and monitoring the customers according to Boyd is the third and most important element in the MOA process. It concerns with the primary purpose of marketing activities, which is to facilitate and encourage

Macro- environmental

analysis

End-user market definition

End-user value analysis

Channel user analysis

Competition analysis

Supplier analysis

Demand forecasting

Market opportunity evaluation

Phase 1

Phase 2

Phase 3

Phase 4

transactions with potential and existing customers. Therefore one of the major responsibilities is to analyse the motivations, behaviour and needs of present and potential customers. The fourth element in the MOA process is concerned with the gathering of information on the measures that are necessary for managers to make informed decisions. Thereby the information-need concerns estimates of sales volume and profit expectations. The final element in the framework Boyd proposes is determined by identifying market segments based on the previous analyses, and deciding which segments represent attractive and viable opportunities for the company.

2.2.3 Discussion

The analysis of the external environment turns out to be a basic condition in assessing market opportunity, strategy development and decision making. Another important notice is that this takes place in a context; it is a continuous iterative process during which the content of business strategy is formed. The scanning and analysis of the environment therefore is the way to determine opportunity and threat. Moreover, the diverse models all emphasise that opportunities and threats derive primarily from (analysing) the external environment.

In addition, the models have in common that they offer a variety of (different) techniques to identify and assess market opportunities and forecast and evaluate future market scenarios. These techniques are discussed separately, but in developing a framework for research on market opportunity analysis, they can also be considered complementary to on and other. For that reason different elements from the models discussed in this paragraph will be taken into account in the next paragraph in designing the framework for this research.

2.3 A

FRAMEWORK FOR ASSESSING OPPORTUNITY IN THE CONTEXT OF THIS RESEARCH

The previous paragraph introduced the concept of environmental analysis and the role it plays in assessing market opportunity. In this paragraph the framework for analysing market opportunities in the context of this research will be discussed. Figure 2.3.1 shows the conceptual framework that will be used to assess the market opportunities of VTE prophylaxis in the extramural medical patient.

The framework compromises different elements of the formal models discussed in the previous

paragraph. The choice for this sequence of information gathering activities is based on the

complexity of the pharmaceutical industry’s environment that comes forward from the

backgroundstudy for this research (Part III).