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Strategic groups in the biopharmaceutical industry: implications for performance
Zeynep Erden1, Georg von Krogh, Cecilia Nytorp
1Department of Management, Technology, and Economics, ETH Zurich, 8032 Zurich, Switzerland. zerden@ethz.ch
Biopharmaceutical firms succeed through strategic positioning. Large, diversified firms and medium-sized, partnered firms show the best performance in this competitive industry.
Area of Science:
- Biopharmaceutical Industry Analysis
- Strategic Management
- Innovation Studies
Background:
- The biopharmaceutical industry faces intense competition, high uncertainty, and reliance on scientific knowledge.
- Firm performance is significantly influenced by strategic group membership.
- Key strategic dimensions include R&D partnering, diversification, and firm size.
Purpose of the Study:
- To analyze strategic groups within the biopharmaceutical industry.
- To identify how different strategic dimensions impact firm performance.
- To determine the characteristics of high-performing strategic groups.
Main Methods:
- Analysis of strategic groups based on R&D partnering, diversification, and firm size.
- Comparative performance assessment across identified strategic groups.
- Statistical evaluation of strategic group effectiveness.
Main Results:
- Significant performance differences exist among strategic groups.
- High-performing groups include large, highly diversified firms across therapeutic areas.
- Medium-sized firms engaging in inter-firm R&D partnerships also demonstrate strong performance.
Conclusions:
- Strategic positioning along R&D partnering, diversification, and size is crucial for success.
- Optimal strategies vary by firm size, with large firms benefiting from diversification and medium firms from partnerships.
- Understanding strategic group dynamics is key for biopharmaceutical firm performance.
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