In a fast-paced industry such as the pharmaceutical sector, it is integral to give your business the edge by staying one step ahead of your competitors. With patents expiring, technology developing, business models changing and new competitors emerging, a competitive intelligence strategy is quickly becoming imperative to companies in the pharmaceutical industry.

Competitive intelligence, the process of compiling and analysing intelligence focusing on competitor products, customers and market environment, can be a hugely efficient tool in identifying the direction or strategy of a competitor. This, in turn, can be used critically to shape a company’s strategic response, allowing it to maintain its advantage.

Implementing such a strategy can prove to be difficult, however. Efficient intra-department communication and understanding is vital considering how closely certain measures can potentially border on industrial espionage, a charge taken seriously in emerging pharmaceutical markets such as Asia.

With the generic market continuing to grow and the emerging biosimilar market threatening to rapidly expand on the back of support from Europe and the US, an effective competitive intelligence strategy can help to stabilise operations during what could prove to be a turbulent period for any pharmaceutical company.

“A competitive intelligence strategy is quickly becoming imperative to the pharmaceutical industry.”

Other benefits of a competitive intelligence strategy include the ability to forecast market shifts or competitor interests and the creation of a global intelligence network for use by the entire company. Such is the potential return on investment of an effective competitive intelligence function that these tools are now being implemented by some of the world’s leading pharmaceutical companies, including Roche, AstraZeneca and GlaxoSmithKline.

Roche’s former Senior Competitive Intelligence Manager for Biosimilars, John McDonald-Dick, a delegate at Arena’s upcoming Competitive Intelligence in Pharma 2011 event, tells Liam Stoker why he believes that while an effective competitive intelligence strategy is an integral tool within the pharmaceutical sector, companies need to be aware of the potential risks and costs involved.

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Liam Stoker: How critical is the competitive intelligence process to a company operating within the pharmaceutical sector?

John McDonald-Dick: Competitive intelligence is absolutely critical to the pharmaceutical industry. If a particular company does not understand the competition, how they think, who they are, where they want to be in the future, what they can and cannot do, then it is effectively operating blind and a competitor will at some point surprise them and invariably cost them money.

LS: What benefits can a particular company draw from the use of competitive intelligence?

JMD: If a particular company can identify the nature, culture and capabilities of its competitors, then that gives it a distinct advantage in terms of strategic planning.

LS: How challenging can it be for a company to implement an efficient and effective competitive intelligence strategy?

JMD: If everything within the industry at present is going well, it can be prove to be very challenging, because people are not generally guaranteed to see the immediate benefits. One has to convince them of both current benefits, such as an increased advantage over competitors, as well as the future benefits. If something within the industry has gone wrong, such as a competitive surprise for example, then the task is made much simpler. 

LS: Within the pharmaceutical sector, which topics or subjects do you consider to be the most important to any prospective competitive intelligence strategy introduced by a company?

JMD: I’d consider strategic intelligence to be the most important topic. This is the process of understanding any future strategies that may be deployed by both existing and new competitors. This relates to both direct and indirect strategies, as both can impact on a company’s actions.

“If a particular company does not understand the competition…then it is effectively operating blind.”

LS: How careful does the pharmaceutical industry have to be before competitive intelligence borders on industrial espionage?

JMD: It is integral that any competitive intelligence strategy pays close attention to the strict guidelines in place, particularly with any specific local laws in countries that the company may operate in.

Taking China and Russia as examples, these countries have laws, which if not understood, may leave a company stepping over the line into the boundaries of industrial espionage.

It is crucially important, therefore, that all employees are properly educated as to the boundaries and laws that are enforced, as well as guidelines for the company itself being adhered to.