PRICE WATERHOUSE: Pharma 2020: Challenging business models Which path will you take? (I) Modelo Federal

The federated model provides a framework for creating integrated packages of products and services, and thus diversifying beyond a company’s core offering. It also combines the benefits of nimbleness and size. It would enable each player to build a specific area of expertise, establish a competitive advantage as a result of that expertise and sell its products, knowledge or skills, leaving activities that are better performed by others to its partners within the federation.
More importantly still, the federated model might encourage greater cross-fertilisation and deliver bigger improvements in performance, without forfeiting any flexibility. The stronger members of the network could help the weaker ones to improve – since federations have an incentive to perform well as a whole – but they could also replace any participant that persistently underperforms.


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