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Topic 3. Sources and Determinants of competitiveness 3. In the following industry, by using the five forces framework, what threats and opportunities might a firm have? 4. Based on the description, how will a pharmaceutical company get a sustainable competitive advantage? The pharmaceutical industry consists of firms that develop, patent, and distribute drugs. Although this industry does not have significant production economies, it does have important economies in research and development. Product differentiation exists as well because firms often sell branded products. Firms compete in research and development. However, competition is significantly reduced once a product is developed and patented. Recently, the increased availability of generic, non-branded drugs has impacted the profitability of some drug lines. Once an effective drug is developed, few if any, alternatives to that drug usually are available. Drugs are manufactured from commodity chemicals that are available from numerous suppliers. Major customers include doctors and patients. Recently, increased costs have led the federal government and insurance companies to pressure drug companies to reduce their prices