Free Research Paper On Technological Factor:

Type of paper: Research Paper

Topic: Company, Business, Market, Medicine, Products, Pharmacy, Drugs, Development

Pages: 10

Words: 2750

Published: 2020/10/18

Internal and External Analysis of Eli Lilly

Segments of the general environment that would rank highest in their influence on the corporation. Assess how these segments affect the corporation and the industry in which it operates?
There are six factors of the general environment that influence the company’s success level. These six factors are Political, Economic, Socio culture, Technological, Environmental and Legal factors.
Political factor includes the tax policies, trade and tariff restrictions and changes in the government. Economic factors may include the inflation rate, interest rates, level of income, the unemployment rate and change in economy positions. Social factors may include the size, ethical mix and age of the population as well as a cultural trend of the whole population. Technological factors include new developments in products and technological advancements. Environmental factors include the weather pattern and effect of environmental changes on behavior of population .legal factors may include all the legislation regarding a business sector. These all segments influence on the performance of any industry. There are two sectors that affect the Eli Lilly Company most. These two factors are technological factor and economic factor (Brook, 2012).

The world is changing very rapidly. Every new day comes with an innovation in almost every field. Impact of Biotechnology is an important technological threat for the pharmaceutical industry. Many investors are willing to invest in these pharmaceutical companies. There are almost 300 businesses in United States who always come up with new medicines. So when we talk about the biggest factor of the general environment the most important factor that comes into mind is technological environment. Eli Lilly Company also invests a lot of money in research and development and always come up with innovation in medicines with low cost (Grades, 2013).

Legal and environmental factor:

The second most affecting factor for a pharmaceutical company is legal and environmental factor. The significant role in regulating the pharmaceutical companies is of FDA and some other agencies that monitor these sectors. These agencies may include the Federal Trade Commission (FTC), U.S. Patent & Trademark Office and U.S judicial system. There are some companies that are legally challenged including the patents of Eli Lilly, Bristol-Myers Squib band American bio sciences. As the environment of many cultures are changing. Now people mostly believe in using natural products as a remedy due to side effects of chemicals. These factors influence the overall industry (Brook, 2012).
Consider the 5 forces of competition; choose 2 that are the most significant for Eli Lilly. Evaluate how well Eli Lilly has addressed these 2 forces recently. 
There are five force of competition that influences the industry. These five forces are threats of new entrants, bargaining power of the buyer, bargaining power of the supplier, substitute products and degree of rivalry among existing firms.

There are two forces that have most significant role for Eli Lilly Company.

Bargaining power of customers
There are more than 300 pharmaceutical companies that are currently working in the United States. There is a higher level of competition is found among all of them. As an entry into the market cost is very high, there is small risk that new entry can be a threat to company. But the existing firms are giving stiff competition to each other. Pharmaceutical companies mostly focus on the research and development of new drugs and then commercializing that drug into the market. Every firm in the market always seeks new opportunities to make new medicines and when a company succeeded in making a new drug that has no alternative in the market then that company makes the higher profit by selling it. In recent years, there are many new drugs that are introduced by many pharmaceutical companies. To meet this force Eli Lilly always invest a lot of money on research and development. And recently Eli Lilly has introduced new medicines into the market that covered a vast market area in the United States. This competition among the pharmaceutical companies always keep companies aware of market needs and always come up with new technological advancement in the field of biotechnology. Eli Lilly also knows the importance of this healthy competition and they work hard to give good drugs to the markets (Luvison, Dave, 2009).

Bargaining power of customers:

The second most significant force that impacts the pharmaceutical company is the bargaining power of the client. When a new medicine comes into the market that have no substitute then the company has an advantage and can fix a price of their own-choice but what will happen when alternative of that medicine come into the market. There are other regulatory authorities that impact the bargaining power of the customers. There are many managed care organizations that are conscious about the cost of the drugs. This can be a negative threat for the pharmaceutical companies. They have to maintain the price according to the need of the customers. Retailers play a significant role in negotiating the prices with these pharmaceutical companies. In recent years managed care organizations have worked a lot to keep the costs low for drugs. They have achieved the formularies who force the pharmaceutical companies to give discounts on their pricings. Retailers also play an important role by taking assurance from the physicians that they will recommend only those drugs that are accepted by formularies and managed care organizations. For the Eli Lilly Company, this force has the significant impact on their sale. As a result, they always keep the price of their new drug at medium level as negotiating power of customers is greater than the suppliers. To meet this challenge Eli Lilly always try to keep the cost of medicines small. (Grades, 2013).
With the same 2 forces in mind, predict what the company might do to improve its ability to address these forces in the near future.
There are a large number of competitors exist in the market and exist and entry both is costly for companies so there is severe competition exist. Eli Lilly Company must invest a lot of money in developing new drugs and by giving competitive edge company can overcome this force. Eli Lilly also has new opportunities to introduce its products into new markets that will be profitable for the business as well (Luvison, Dave, 2009).
Assess the external threats affecting Eli Lilly and the opportunities available the corporation. Give your opinions on how Eli Lilly should deal with the most serious threat and the greatest opportunity. JUSTIFY answer.


Eli Lilly is a big pharmaceutical company that is currently operating in United States and has a large market in the world. There are many new possibilities for Eli Lilly Company. By taking into account these opportunities Eli Lilly Company can make the great success. As the world is becoming global village, there are new advancements taking place every day. By doing technological progress in the field of biosciences, Eli Lilly can make a lot of profits. By introducing new and cheap products into the market for the diseases that are currently affecting the world, Eli Lilly can earn an enormous profit. This company has a greater opportunity by targeting new markets in the world. By identifying the markets in which new entry barriers are low, Eli Lilly can expand its business a lot. Much new healthcare projects can be started that give awareness to the people mostly in the places that are not very much developed. By initiating these programs, company can earn a real name in the market and as well as can expand its product market as well. There are some social responsibilities to the enterprise that must fulfill by the enterprise. If Eli Lilly invest on these health care projects it give a real image to the society as well. Company can improve the overall living standard of the world by producing drugs that are productive for the community. As now the trend in the world is changing about the drugs. Mostly people prefer now herbal drugs. Eli Lilly has an excellent opportunity to make herbal medicines that will attract a large market in the world. New emerging markets can help the Eli Lilly Company to expand its business to these markets. Innovation in technologies and medical field can provide better opportunities to the Eli Lilly Company to introduce a large variety of new products into the market (Marine, 2008).


There are many companies in the United States that are operating in this area of business. There is an enormous completion in the market. This competition gives the company a threat for lowering its cost and price of products. There are many substitutes for drugs. As a result, the company has to keep costs low. If the business will offer higher price customer can easily switch towards the other substitutes products. As the economy of United States is declining now a day’s income of the population also affected, therefore, this is a great threat to the purchasing power of the population is declining as the economy declines. There are many regulations by the government that are now imposed on all pharmaceutical companies. This is a big threat to the company if they do not obey all the legislation. These regulations are related to many environmental, health care and legal factors. There is also a threat to volatile cost and unstable revenues. Explosive loss means that the company has to make plans that keep the cost skyrockets and these plan making takes a lot of time that cause delay in new developments that negatively affect the Eli Lilly Company. There is also a difficulty in planning the investment decisions that lead the company to the volatile revenues (Luvison, Dave, 2009).

Strength of Eli Lilly:

Eli Lilly Company has many high key points that help the company to grow faster. At Eli Lilly Company, there exists strong management that helps the company to keep all its operations up to date and smooth. A good management team is very necessary to run a business, when an efficient and hardworking team will be a part of any company that the company earns a real name. All the employees in the Eli Lilly Company are loyal and hardworking. They are skilled and have capabilities to do their task at best level. The culture of Eli Lilly Company is very innovative. Company always prefer to hire the employees that are creative and innovative in their work many new research developments are made at the enterprise and Eli Lilly Company makes many new products for the market. The best strength of the enterprise is that they always make the goods that are cost advantageous and can be priced at good rate in the market. Therefore, many people prefer to buy their drugs. As a company has covered a large market area and as a result group also shows economies of scale in the market. Company is well aware of technological advancements, for this reason, they always prefer to use new technology in making the drugs and use the advertising techniques that attract a huge target market. Company uses financial leverages in a very meaningful way and keep the balance sheet maintain to increase the profit and expand the business by reinvesting a significant portion in research and development programs. The strategy that Eli Lilly used to maintain its strengths in the market is the right pricing strategy and good marketing strategy that attract a large target market to them (Marine, 2008).


There are also some weaknesses of Eli Lilly Company that must be changed to improve business more. Eli Lilly Company has weak cost structure for many of its products as a result they have to charge high price from the target area and in comparison their competitor have low cost from those products. Eli Lilly must need to firm their cost structure for many of its products. It can be a negative impact on the long-term impact of the business. Another weakness of Eli Lilly Company is that its cost per unit of production for many products is very high when compared to other competitors. There is a need to undertake some steps to keep the cost per unit low and make the cost structure stable.

Determine Eli Lilly's resources, capabilities, and core competencies. 

Eli Lilly Company has many resources in a form of investment and human resources. They have competent management force and employees and have larger revenues that they invest in their company for new products. In 2012, Eli Lilly invested $700m for production of insulin and they have announced that they will double the investment till 2017. All the resources in the Eli Lilly company has timely invested in the company for new products developments and company had many capabilities to introduce new products into the market (Grades, 2013).
Core competency of the Eli Lilly Company is that it has managed the innovations in its production process. In 1998 when new CEO of the company came, a significant portion of the budget was allocated to the developmental department and hired more than 700 scientists. They have the strategy of alliance management to achieve the goal of success. Now the Eli Lilly Company has a large number of products that are used for treatments of many diseases including sepsis and schizophrenia. Eli Lilly Company has the capability to put their resources in producing products that have a core competency in the market. Now the company is succeeded in maintaining the name in the pharmaceutical sector as the business of best in class and first- class drugs in United States (Brook, 2012).

Analyze Eli Lilly's value chain to determine where they can create value using resources, capabilities and core competencies discussed above. 

Eli Lilly Company serves as value chain integers in the development of bio pharmacy as well as in commercializing them. Eli Lilly mostly believes in building the partnership. Eli Lilly always believes to endorse the strong alliances rather than involving in implications and acquisitions. For taking the breakthrough in the pharmaceutical sector, Eli Lilly is using the alliance strategy in their research and developmental programs and also in their manufacturing process. They can improve the process by continuous monitoring by voice of their alliance system. Combinations of many inputs are used to develop data that shows the success of the alliance system. For developing new products Eli Lilly believe on leadership strategy, and they believe that two heads are always better than a single head; therefore, each company of the Eli Lilly develops its products. Eli Lilly is using all its resources including both human and capital resources to develop new products and earning its name for more than 70 years. It’s hard to see the new competency development in the company. All the employees and the company itself are very capable of producing new developments in the production. There are many opportunities for Eli Lilly Company that makes the company more successful if they adopt those opportunities and integrate their value chain process by adding opportunities into it. (Luvison, Dave, 2009).


Brook, C. (2012). The Elements of the General Environment: PESTLE Analysis. Retrieved on 26 January 2015 from
Marine, G. (2008).Porter's Five Forces Analysis for the Pharmaceutical Industry. Retrieved on 26 January 2015 from
Grades, A. (2013), Ell Lilly. Retrieved on 26 January 2015 from
Luvison, Dave, (2009). Alliance Management at Eli Lilly: Lessons on How Alliance Capability Contributes to Sustainable Advantage. Journal of Applied Management and Entrepreneurship, Vol. 14, No. 3.

Cite this page
Choose cite format:
  • APA
  • MLA
  • Harvard
  • Vancouver
  • Chicago
  • ASA
  • IEEE
  • AMA
WePapers. (2020, October, 18) Free Research Paper On Technological Factor:. Retrieved February 29, 2024, from
"Free Research Paper On Technological Factor:." WePapers, 18 Oct. 2020, Accessed 29 February 2024.
WePapers. 2020. Free Research Paper On Technological Factor:., viewed February 29 2024, <>
WePapers. Free Research Paper On Technological Factor:. [Internet]. October 2020. [Accessed February 29, 2024]. Available from:
"Free Research Paper On Technological Factor:." WePapers, Oct 18, 2020. Accessed February 29, 2024.
WePapers. 2020. "Free Research Paper On Technological Factor:." Free Essay Examples - Retrieved February 29, 2024. (
"Free Research Paper On Technological Factor:," Free Essay Examples -, 18-Oct-2020. [Online]. Available: [Accessed: 29-Feb-2024].
Free Research Paper On Technological Factor:. Free Essay Examples - Published Oct 18, 2020. Accessed February 29, 2024.

Share with friends using:

Related Premium Essays
Other Pages
Contact us
Chat now