How can eminent management gurus whose strategy advice proves so valuable across business in general sometimes get it so wrong on pharma? This column provides a few cautionary tales about stumbles involving some of the most celebrated experts. In showing how they went wrong I underline how important it is to understand the specific characteristics of the pharmaceutical industry when introducing new management concepts.
Porter on strategic alliances
Michael Porter, one of the most famous management consultants and the inventor of the concept of competitive advantage, has set himself strongly against strategic alliances. As the apostle of market competition, Porter regards strategic alliances as being anticompetitive.This may be the case in many industries. But it has not been so in pharmaceuticals, where the diffuse nature of disease makes it difficult for big companies to achieve a dominant position. Porter's attitude appears eccentric to those in the industry for whom alliances have long been a part of the everyday pharmaceutical scenery. I would argue that strategic alliances have resulted in increased competition in the pharmaceutical industry.
Unfortunately this is not the sole example of an eminent management guru getting it wrong in my view as far as pharmaceuticals are concerned. Experts concentrate on concepts that will be convincing to as many industries as possible. They do not often have the time or patience to understand the different facets of each industry. That can make some of their advice irrelevant or positively dangerous for some industries, including our own.