Decrease the text size Increase the text size Print this page Share You are here Prescription medicines: It contains the same 'active ingredient' as the existing medicine; the 'active ingredient' is the chemical that is biologically active in the body and makes the medicine work. Active ingredients can be manufactured and sold by other sponsors once the patent for the existing brand medicine has expired. Apart from containing the same active ingredient, generic medicines must also be 'bioequivalent'.
You, therefore, need to be confident that you can achieve and maintain the number one position before choosing the Cost Leadership route. Companies that are successful in achieving Cost Leadership usually have: Access to the capital needed to invest in technology that will bring costs down.
A low-cost base labor, materials, facilitiesand a way of sustainably cutting costs below those of other competitors.
The greatest risk in pursuing a Cost Leadership strategy is that these sources of cost reduction are not unique to you, and that other competitors copy your cost reduction strategies.
This is why it's important to continuously find ways of reducing every cost. One successful Decision on brand or generic name of doing this is by adopting the Japanese Kaizen philosophy of "continuous improvement.
How you do this depends on the exact nature of your industry and of the products and services themselves, but will typically involve features, functionality, durability, support, and also brand image that your customers value.
To make a success of a Differentiation strategy, organizations need: Good research, development and innovation. The ability to deliver high-quality products or services. Effective sales and marketing, so that the market understands the benefits offered by the differentiated offerings. Large organizations pursuing a differentiation strategy need to stay agile with their new product development processes.
Otherwise, they risk attack on several fronts by competitors pursuing Focus Differentiation strategies in different market segments. The Focus Strategy Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market.
Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors. As with broad market strategies, it is still essential to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach: Focus is not normally enough on its own.
But whether you use Cost Focus or Differentiation Focus, the key to making a success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche. It's simply not enough to focus on only one market segment because your organization is too small to serve a broader market if you do, you risk competing against better-resourced broad market companies' offerings.
The "something extra" that you add can contribute to reducing costs perhaps through your knowledge of specialist suppliers or to increasing differentiation though your deep understanding of customers' needs.
Generic strategies apply to not-for-profit organizations too. A not-for-profit can use a Cost Leadership strategy to minimize the cost of getting donations and achieving more for its income, while one pursuing a Differentiation strategy will be committed to the very best outcomes, even if the volume of work it does, as a result, is smaller.
Local charities are great examples of organizations using Focus strategies to get donations and contribute to their communities. Choosing the Right Generic Strategy Your choice of which generic strategy to pursue underpins every other strategic decision you make, so it's worth spending time to get it right.
But you do need to make a decision: Porter specifically warns against trying to "hedge your bets" by following more than one strategy. One of the most important reasons why this is wise advice is that the things you need to do to make each type of strategy work appeal to different types of people.Economic models help managers and economists analyze the economic decision-making process.
Each model relies on a number of assumptions, or basic factors that are present in all decision situations. NeedyMeds is the best source of information on patient assistance programs.
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Generic and brand name drugs have identical active ingredients, and generic drugs must meet Health Canada’s standards for bioequivalence.
Bioequivalent drug formulations have the same bioavailability; that is, the same rate and extent of absorption. When a company’s mark becomes the generic name for its product or service, it can lose its trademark registration which can be extremely damaging to the company.
A recent 9th Circuit decision upholding Google’s trademark may help other trademark owner’s avoid suffering a generic fate.