Capability and capacity of pharmaceutical business

Hello, everyone. Today we're going to talk about the capability and capacity of pharmaceutical business and how these can be differentiated from other type of businesses in such unique industry. My name is Radi Haloub. I'm an associate professor and program leader for biotech and pharmaceutical management at UCL Global Business School for Health.

The aim of this session today is how do you define resources in pharmaceuticals and biotech companies, and how these capabilities can be dynamic. How to measure these? What are the main drivers for dynamic capabilities? The reason why this subject is important is because the capabilities and the resources within the pharmaceutical company can define the extent to which these companies can expand in different markets for different types of diseases. The main drivers to evaluate the dynamic capabilities are also important to define why companies can react quicker than others and create competitive advantage.

Strategic capabilities are defined based on two main points regarding the resources and competencies. Resources, in simple terms is, what do we have? Means assets. What assets do we have? How many manufacturing facilities have we got? Are we expanding or are we localized in certain areas? What are the researchers available and employed by the pharmaceutical company to come up with new innovative products? Then you will look at the competencies, which are how we are using these resources. How we are using these assets? Actually, what do we do with these? The relationship between resources and competencies can yield different types of strategic capabilities in terms of physical capabilities, financial capabilities, human capabilities, technological capabilities, reputational capabilities, and organizational capabilities. Bear in mind that the resources can be defined also in terms of tangible and intangible assets, where tangible assets like physical, financial, human resources. The intangible assets are reputational intellectual capital, and that's just patents, which is really important in pharmaceutical companies and brand names. These are resources will add to the cost of the organizations as cost of assets. But the competencies are the skills and abilities by which the organization resources are used effectively through its activities and processes. That relationship is very important to create a long-term survival and competitive advantage.