Astrazeneca

CONTENTS

INTRODUCTION Page 2

SECTION A Page 3-20

1) The nature of competition: analysis Page 3-11

1.1) Market structure Page 3-7

a) Market definition Page 3

b) Market value Page 3-4

c) Segmentation Page 5-6

d) Competitors Page 6-7

1.2) Pharmaceutical pricing/cost (Dr Freeman explanations) Page 8-9

1.3) Research and development Page 9-11

2) Nature of the risks and strategies Page 11-15

3) S.W.O.T analysis Page 15

4) Advertising/product Page 16-18

SECTION B Page 19-23

5) Calculation Page 19-21

a) Demand curves Page 19

b) Price and output value Page 19-20

c) Upper and lower limits Page 20

d) Total profits and profits per box Page 20-21

e) Diagram and explanations Page 21

6) Rhincort Page 21-23

a) Tree diagram Page 21

b) Expected values Page 22

c) Re-adjustment Page 22

d) Strengths and weaknesses Page 23

BIBIOGRAPHY Page 24

Introduction

AstraZeneca was formed on 6 April 1999 through the merger of Astra AB of Sweden and Zeneca Group PLC of the UK.

It is one of the top ten largest pharmaceutical companies in the world.

It employs 64 000 people all over the world including 11 900 people in R&D and 15 000 in production.

It has 30 manufacturing facilities in twenty countries.

AstraZeneca produce drugs for seven healthcare areas:

• Cancer,

• Cardiovascular,

• Respiratory,

• Central nervous system,

• Gastrointestinal,

• Pain control,

• And infection.

Astra Zeneca's sales for the fiscal year ended December 2004 increased 13.7% to $21.4 billion. Net income increased 25.6% to $83.8 billion.

This case study is based on the Datamonitor Report 2005.

Section A

1) The nature of competition: analysis

1.1) Market structure

a) Market definition

The pharmaceuticals market consists of both ethical and over the-counter (OTC) drugs, but does not include consumer healthcare or animal healthcare. Market values have been calculated at ex-factory prices (the value at which manufacturers sell the drugs to distributors). Any currency conversions have been made at the 2004 annual average exchange rate.

b) Market value

The global pharmaceuticals market has known a growth until 2003 but in 2004, there was a decrease (about 6,5%) as the figure 1 shows. However in 2005, there was a resumption and reaches a value of $ 534,8 billion.

According to the figure 4, the market will to have a value of $579,2 billion in 2006 with a growth of 8,3%. Despite this value growth, the figure 4 shows that the rate growths of the market will decrease from a rate of 7,5% in 2005 to a rate of 7,1% in 2010.

c) Segmentation

The market is dominated by the United States generating 48,4% of the sales following by Europe (28,1%), Asia-Pacific (18,2%) and Rest of the world (5,3%).

The largest sector is the