Current Situation
To understand the situation in which the company is currently in, you must first think of the external factors that are affecting the company and the industry as a whole, namely the political, economical, social and technological factors.
Political factors * The pharmaceutical drugs laws are becoming far more complex and strictly enforced. As well, international pharmaceutical companies have the increased challenge of facing different requirements, processes, and laws for different countries to navigate through. This can cause many companies to divert from plans to expand into new markets. Companies need a lot of organization between legal departments, development teams and executives to be successful. * The importing of goods over international borders brings up the issue of taxes. The taxes imposed on imported goods greatly affect the profit margin, and the selling price. This results in domestic goods being more competitive in the market. With the increasing trade agreements between countries this is becoming less of an issue, however there still are big barriers of entry for some markets. The decreasing cost of shipping international packages has also played a role in increased number of imported goods. * With the increasing popularity of pull through marketing in the pharmaceutical industry, there has been an increased compliance with legal requirement. As with the drug developing laws, each country has their own requirements to go through, which results in increases in the cost.
Economical
* The economy is entering a possible recession which always causes issues with loans. This will most likely result in lower interest rates and less capital to borrow. This poses a large barrier for new entries to the market as banks will not be likely giving money to many startup companies at this time. As well it will be difficult for smaller companies to expand as the banks will be worried that expanding in a downturn will result in failure. The opportunity lies with the larger corporations which can take advantage of lower interest rates as they have strong relationships with the major lenders, they pose less risk, and they most likely have a large line of credit agreement that they can use. * The lack of capital available will cause a lot of hardships for many companies including manufacturing companies, warehouses, and distribution arms. This can be used by larger companies with access to capital to make strategic acquisitions or mergers. This would be a great opportunity to create presence in new markets by purchasing a distribution arm in markets of interest. * Many government parties have changed from a public Medicare system or are thinking about going private to decrease the cost. This will result in smaller profit margins for companies as the government bodies will want lower prices or the private companies will only allow the less experience brands to be bought. This is going to result in companies going under if they do not have efficient internal process
Social
* The average age of male and females is increasing as a result of better medicine, more health concerned individuals, and better doctors. With an aging population comes more opportunities as these individuals will need medical help to keep their standard of living up to par. This will increase the revenue within the industry; however, this will also cause the prospect of new entries. * The customers are more educated about the drugs and have more health causes. The customer is more concerned about the side effects, competitors’ drugs, and drug alternatives. There is more transparency now then there has ever been, which is a result of more health conscious people, the internet and pull through marketing. There is so much information via internet, news paper, television, and magazines that it is hard to avoid it. There is a movement of going organic; which means to earth grown products instead of drugs to overcome illnesses. * The go green movement is growing every day, and large corporations are listening. Most companies are introducing earth friendly processes, which are usually costly, to avoid bad press.
Technology
* Technology is always evolving, becoming more efficient, faster, cheaper, and greener. However purchasing or replacing major equipment is very costly. This is where the company must decide when it is beneficial to upgrade the equipment. * Another reason why companies upgrade equipment is due to government regulations. Government usually comes in and sets a bar at which the equipment must be at. The reasons for this vary from employee safety, consumer safety, or environmental reasons.

The greatest opportunity in the industry currently comes from the increasing aging population. The average age of male and females is increasing as a result of better medicine, more health concerned individuals, and better doctors. With an aging population comes more opportunities as these individuals will need medical attention to help keep their standard of living up to par. This will increase the revenue within the industry; however, this will also cause the prospect of new entries. Richter’s diverse distribution arm gave them an edge as this gives Richter’s the opportunity to reach different markets. Richter’s strong brand name, specifically in Eastern Europe, will help as the older population is comfortable with the company’s products.
Richter’s is behind the 8 ball regarding their online marketing. They have no website, and they do not participate in any social media activity. This is a huge threat, as other major companies in the industry are evolving and using online tools to reach their customers directly. Online marketing also is a relatively cheap form of marketing.
However I believe that the biggest threat to Richter’s is the possibility of competitors making acquisitions or complete mergers. Currently there are 10 major players that make up one-third of the market. With the downturn in the economy there is a possibility of either smaller companies merging to become one large company or even worse, large players merging to become super powers. This could result in a decrease market share for Richter’s. As well competing bigger players could result in price war. The bigger players with efficient processes can reduce wasteful spending and reduce the cost of their product.