Interesting post, Yendi! It’s a particularly unique industry because of all the constantly-evolving regulation and the common belief in the US that cigarettes will soon be a thing of the past. As a consumer, I wonder how responsive British-American and other tobacco companies will be in the future given that the 20 cigarette packet doesn’t seem to be evolving into anything new (except for the e-cigarette perhaps, but that’s not being produced by the big tobacco companies). I’d also be interested to see what parts of the supply chain that you described are most directly hurt by each additional regulation (e.g. the tobacco farmers, the factories, management, etc). And finally I wonder if these companies are in a prime position to start thinking of manufacturing and distributing Marijuana cigarettes now that those are gradually becoming legalized in many parts of the US and the world.
It’s a fascinating post on a fascinating company. I wonder what you would say is the most decisive reason Gilead is ahead of the old-school behemoth pharmaceutical companies for some diseases — is it the acquisitions, the R&D, the focus on the three segments you listed (HIV, liver and oncology), etc? Anyway, this really gets at the point of why a young Silicon Valley company like Gilead is surpassing some of the oldest players in this convoluted industry. It would also be cool to look at similarities between what Gilead did to the pharma industry and what Tesla did to the automotive industry, AirBnB to the hotel industry, Uber to taxis, etc. In many ways it almost looks like the classic Silicon Valley story, except this time it’s in a seemingly undisruptable industry!
I think this is the only section D post that looked at the business model vs operational model question of processes that happened so far in the past. In many ways, we’ve spent the latter part of the semester looking at more contemporary hi-tech operations management and this post implemented all of that on a fascinating 19th century operational problem. I’d wonder if you think that breaking Standard Oil up into its many successor companies — most of which, eventually became incredibly powerful — means that the Sherman act actually helped/forced SO to continue to innovate and adapt. I wonder what are the incentives to innovate further if you had already achieved a 90% market share. (But that might just be the Elizabeth Warren fan in me talking.)