The distribution of Oncology pharmaceuticals is a profitable industry because it is not easy for new entrants, due to the specialized nature and research/approval time(from the FDA required). This greatly increases profits because any new entrant into the oncology field will take more than a year to not only develop their product but even longer before it can reach the market via approval from regulatory agencies (FDA, EMA). The industry is incredibly profitable as the drugs are life-saving cancer treatments meaning specialized pharmacies and hospitals are more than willing to pay the price to acquire products.
Competitive Strategy (Desi):
The competitive strategy that Daiichi Sankyo follows is focus differentiation. Daiichi Sankyo strives to become one of the top oncology companies within the industry by producing and researching highly effective ADCs((antibody drug conjugates Antibody Drug Conjugates (ADCs) (astrazeneca.com)). By producing the highest quality ADCs we ensure that doctors will prescribe and use our treatment. Therefore, the company uses this strategy because it focuses on a small group of consumers that can offer unique features that can’t be aligned with other competitors. The bargaining power of customers is very limited because the drug is highly specialized and effective, Hospitals/Specialized Pharmacies(the customers) will struggle to find a replacement product. The threat of new entrants is very limited as well due to strict international laws that are needed to comply with. The bargaining power of the suppliers is weak because there aren’t many companies that produce ADCs. The threat of substitutes is low due to this being a specialized drug product and Enhertu establishing itself as a highly effective breast cancer drug. Rivalry is very limited once again due to an extremely high barrier to enter the industry via regulations and approval process as well as research time.
Value Chain (Nick):
The person who works at the company is Jeff. He is a supply chain intern there and handles the logistics for shipping MAB (monoclonal antibodies) out of a CMO (contract manufacturing organization) in Texas.
-Inbound logistics: (receiving, storing, and disseminating inputs to the products) Daiichi Sankyo has its input CMO(contract manufacturing organization) ship from the USA to Germany, where they can be stored and turned into a finished product.
-Operations/Manufacturing: (transforming inputs into the final products) Manufacturing occurs in Germany, which involves the importation of raw materials produced in the US. An example of a product produced in the US is the MAB(monoclonal antibodies) which is a key component of Enhertu
-Outbound logistics: (collecting, storing, and physically distributing the products to buyers) Storage and distribution from warehouses in Germany. Products are distributed to the US for vial labeling and packing.
-Sales and Marketing: (inducing buyers to purchase the products and providing a means for them to do so) Sold to the EU market and US market. They sell directly to hospitals and specialized pharmacies. Advertising is done through research studies and presenting them at global conferences showing the effectiveness of the product to Drs who will then prescribe the medicine to patients.
-Customer Service: (assisting customers’ use of the products, and thus maintaining and enhancing the products’ value) Ensuring a quality check throughout the production process to provide high-quality products to customers. Collecting data for research and development to assure the safety and reliability of their products.
What are some business processes?
-Materials Ordering Process: Shipping information, docs, and purchase orders sent to DS NJ headquarters. Inputs are then sent from DS Japan to Germany
-Manufacturing Process: Once received in Germany, they are turned into the finished product and stored there until they either go back to Japan or are sold in the EU and US markets.
You will pick two for your project - one structured and one dynamic. Examples include the sales process, the inventory process, the marketing process, or the hiring process.
Structured process: The inventory process is done through a CMO in Texas, the process stays the same throughout the production of the MAB using various information systems to ensure regulations are met and the product is shipped accordingly.
Dynamic process: Social media and marketing, the company uses LinkedIn to network with Pharmaceutical students for hiring purposes. They also use LinkedIn to post their research studies and conference notes to show Doctors and Hospitals the effectiveness of their oncology portfolio.
Information Systems (Jeff):
Daiichi Sankyo uses many different information systems to manage their business on a global level. The first IS and most important are Microsoft Teams and Outlook. These two tools provide powerful communication and allow for global collaboration. Almost every meeting is done through Teams including global meetings allowing colleagues in America to align with colleagues in Japan. Outlook compliments teams nicely by providing communication tools that can be used at any time of the day which is important when communicating throughout time zones. On top of all the communication tools Teams and Outlook also provide an integrated calendar providing employees with a tool to not only manage their own time but also look at colleagues' availability. Another IS used by Daiichi Sankyo is SAP (soon to be SAP 4hana). SAP is a powerful supply chain management tool that allows employees the ability to manage inventory levels, store purchase orders for future reference, and plan for the future based on current demand levels. Another interesting IS used is Box.com which is a cloud-based file hosting site. In the pharmaceutical industry, there is tons of documentation that goes into every shipment from packing lists to documents from QA. Box allows employees to upload documents and share them with colleagues around the world. Outlook can do this too but emails can be lost. A cloud-based storage system solves that problem by keeping an organized folder structure allowing for ease of access, there's even a search function allowing you to easily find the files you are looking for.
Competitive Advantage (Lauren):
One of the process implementations used by Daiichi Sankyo is establishing alliances. In terms of scale, Daiichi Sankyo in the US is a smaller Pharmaceutical Company offering a few specialized products with the main focus being on Enhertu, their breast cancer drug. In order to reach the global demand for their upcoming projects Daiichi Sankyo decided to align themselves with AstraZeneca, a much larger global pharmaceutical company. By partnering up Daiichi gains the benefits of Astra's global experience for instance China has incredibly strict regulations for drug manufacturers Daiichi does not have any experience with the Chinese market, AstraZeneca however already has products launched in China and will use its experience and existing supply chain systems to help Daiichi products reach the Chinese market.
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