Managing Innovations in Biotechnology
Introduction
Thesis: Innovation is an integral part of biotechnology industry
Purpose
Managing innovations is one of the most vital aspects in strategic management. Different organizations use different patterns of innovation in their day to day activities. This paper seeks to examine the different attributes of managing innovations at Genzyme Corporation.
Overview
Whereas most companies have ventured into mainstream industries such as transport and consultancy, Genzyme specializes in production of orphan drugs. These are drugs meant for uncommon ailments in human beings. Genzyme is headquartered in Massachusetts but serves clients in different parts of the globe. (OECD, p. 27) Less than five years ago, Genzyme Corporation introduced products in other areas of medicine. This move benefited the company by enhancing income. However, diversification also resulted into undesirable impacts such as additional costs.
Competition and Customer’s Bargaining Power
The fact that Genzyme focuses more on orphan drugs has strongly affected competition in the market. One of the most notable effects pertains to monopoly issues. Even though there are many companies in the biotechnology industry, few specialize in production of orphan drugs. This is an attribute that provided Genzyme with an upper hand in terms of competition. With regard to customer’s bargaining power, specialization in orphan drugs has created a loyal clientele-base. Consequently, these customers have minimal bargaining power as opposed to clients in other industries. (Melissa, p. 95)
Capacity of Biotechnology Firms
When companies specialize in production of orphan drugs, their capacity is strongly affected. Firstly, they have to utilize strategic management procedures that facilitate for the establishment of innovative marketing plans. Marketing orphan drugs is not similar as compared to other areas of medicine. The company must identify specific markets for specialized drugs. As a result, a specialized team for marketing orphan drugs must be established. Furthermore, numerous networks have to be established in order to reach different parts of the world.
The capacity for biotechnology firms is also affected by the need to develop innovative human resource mechanisms. Employees in these types of firms must be specially trained. Additionally, aspects such as organizational culture must be addressed in order to enhance the company’s performance. In terms of resources, biotechnology firms must acquire the latest medical equipments in order to enhance the production of orphan drugs. (Michelle, p. 76)
Justification of Genzyme’s Strategy
Genzyme’s strategic focus on production of orphan drugs makes sense from a management perspective. This plan represents an excellent innovation within the biotechnology sector. In all parts of the world, there are few companies that specialize in the production of orphan drugs. The company’s decision is justified because it serves an untapped market.
Furthermore, this strategy streamlines the entire health care industry. From another perspective, the decision to specialize in orphan drugs has enabled Genzyme Corporation to post impressive results. In 2007 and 2008, this company was ranked among the best employers in United States of America. This indicates that the company’s strategy had resulted into benefits. It is such a performance that paved way for investor interest in the company. Currently, Sanofi fully owns Genzyme Corporation. Were it not for the strategic plan, Genzyme Corporation would not have elicited such interest. (Hine, p. 16)
Genzyme’s Venture to other areas of Medicine
As mentioned earlier, Genzyme Corporation has recently ventured into other areas of medicine. This kind of diversification has made it possible for the company to serve more clients from different countries. The impacts of diversification in this company can be assessed from two main perspectives including the merits and demerits. In terms of merits, this company has managed to improve its financial performance. This has resulted from a wider clientele base.
Another notable merit pertains to fact that Genzyme Corporation has provided more avenues of innovative research. On the contrary, venturing to other areas of medicine has cost the company in terms of capital. Modern facilities are required to produce a wider range of medical products. (Christy, p. 105)
Recommendations
This company would enhance its performance if it would establish mechanisms for minimizing the total expenditures incurred. In most organizations, minimization of costs strongly influences the overall performance. In order to achieve this, the company should develop effective mechanisms for streamlining the allocation of resources. (Melissa, p.90)Additionally, it is crucial that the company uses modern technological innovations to enhance the quality of drugs produced.
Conclusion
Genzyme is headquartered in Massachusetts but serves clients in different parts of the globe. Less than five years ago, Genzyme Corporation introduced products in other areas of medicine. Marketing orphan drugs is not similar as compared to other areas of medicine. The company must identify specific markets for specialized drugs. As a result, a specialized team for marketing orphan drugs must be established. Genzyme’s strategic focus on production of orphan drugs makes sense from a management perspective. This plan represents an excellent innovation within the biotechnology sector. Venturing to other areas of medicine has cost the company in terms of capital. Modern facilities are required to produce a wider range of medical products.
References
Christy, R. D. (2011). Financial inclusions, innovations and investments in biotechnology, NY: World Scientific Publishing
Hine, D. (2006). Innovation and entrepreneurship in biotechnology, Cheltenham: Edward Elgar Publishing
Melissa A. S. (2010). Strategic Management of Technological Innovation, New York: McGraw Hill
Michelle, T. C. (2011). Advancements in biotechnology, Hoboken: John Wiley & Sons
OECD (2003). Genetic inventions, Danvers: OECD Publishing
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