TEVA Pharmaceutical: Global Strategy
Individual Assignment: TEVA Pharmaceutical
How did Teva succeed in Israel? Why did such a company emerge in that context? How did Teva set itself apart from other players?
The fact that many immigrants from Europe -in the beginning of twentieth century- with remarkable knowledge in the pharmaceutical industry allowed many local physicians to acquire the know-how of the business and the specialized skills to develop a domestic market in Israel. The recognition of the synergies between these local family businesses with foreign scientists and engineers coming from Germany –known as the birthplace of the pharmaceutical industry- got Teva to succeed in Israel. Moreover, in 1970 Foreign Direct Investment (FDI) was restricted to less than 5% of all investments in Israel, so the domestic industry had no foreign competition. The acquisition of talent and the absence of large foreign competitors led approximate 20 family-owned drug distributors to share the domestic market after World War II, with each of them having US$1 million of annual revenues.
Teva had to serve a population of around 2 million people in an industry context that required synthesis skills, experience with supply chains, and low-cost production and manufacture, since they provided drugs to a population with high poverty levels. The company emerged first: thanks to the knowledge taken from immigrants, and second, due to its ability to recognize key academic institution partners to work with: Jewish Universities, for instance, which helped the company to perform R&D and enter to the innovative market with a budget of 16%-25% less than the typical budget required to bring an innovative drug to the market and less development time.
The notable clarity respect to being a focused firm instead of a conglomerate, gave the company a guide to concentrate its effort on specific firms to acquire and be successful. At the same time, Hurvitz’s vision of “taking risks but not ones that risk the entire
How did Teva succeed in Israel? Why did such a company emerge in that context? How did Teva set itself apart from other players?
The fact that many immigrants from Europe -in the beginning of twentieth century- with remarkable knowledge in the pharmaceutical industry allowed many local physicians to acquire the know-how of the business and the specialized skills to develop a domestic market in Israel. The recognition of the synergies between these local family businesses with foreign scientists and engineers coming from Germany –known as the birthplace of the pharmaceutical industry- got Teva to succeed in Israel. Moreover, in 1970 Foreign Direct Investment (FDI) was restricted to less than 5% of all investments in Israel, so the domestic industry had no foreign competition. The acquisition of talent and the absence of large foreign competitors led approximate 20 family-owned drug distributors to share the domestic market after World War II, with each of them having US$1 million of annual revenues.
Teva had to serve a population of around 2 million people in an industry context that required synthesis skills, experience with supply chains, and low-cost production and manufacture, since they provided drugs to a population with high poverty levels. The company emerged first: thanks to the knowledge taken from immigrants, and second, due to its ability to recognize key academic institution partners to work with: Jewish Universities, for instance, which helped the company to perform R&D and enter to the innovative market with a budget of 16%-25% less than the typical budget required to bring an innovative drug to the market and less development time.
The notable clarity respect to being a focused firm instead of a conglomerate, gave the company a guide to concentrate its effort on specific firms to acquire and be successful. At the same time, Hurvitz’s vision of “taking risks but not ones that risk the entire