- Political and legal environment
The political and legal environment is a very important variable as one of the critical factors determining the efficiency in business operations. On the Likert Scale, it can be rated at 4.5. Government policy plays a very important role in the regulation of the pharmaceutical industry in NZ. Some drug prices may be lowered by the government, forcing the companies to cut costs (Bart, 2008). Additionally, politics may influence the supply of various drugs through cartels. Various laws have also be put in place to regulate the pharmaceutical industry. For example, the relationship between physicians and pharmaceutical companies is limited in NZ to prevent exploitive kickbacks.
- Economic Environment
The economic environment is a very important variable as a factor that determines the success of a business. It can be ranked at a 4.5 score on the Likert Scale. The economic environment refers to all economic factors that influence the buying habits of individuals in NZ. When NZ has a good and wealthy economy, then a pharmaceutical company is likely to thrive because the consumers can afford to buy drugs even at high prices. Additionally, a good economic environment means that residents can afford medical covers, which improves business for pharmaceutical companies (Deakins, 2015). The strength of the economic environment also determines the availability of loans for medical research. Pharmaceutical companies need huge lump sums of money as capital, which is only available in good economic environments.
- Trade Environment
The trading environment is an important variable to consider as one of the influencers of demand and supply forces. On the Likert Scale, it can be rated at 3. The trading environment is an interrelated system with many elements. Some of those elements include the availability of market information, trading tools, and various trading laws that have been put in place. For a pharmaceutical company to thrive in NZ, the trading environment needs to be encouraging. A culture of honesty between a willing buyer and a willing seller also contributes to a company’s success by giving it more trading freedom (Davis, 2004). Pharmaceutical agents also need a positive trading environment to offer support to pharmaceutical companies.
- Infrastructure Environment
The infrastructure environment is an important variable as one of the supporting factors for pharmaceutical companies’ success. On the Likert Scale, it is rated at 3. Infrastructure connection in NZ plays a huge role in facilitating the operations of a pharmaceutical company. Infrastructure refers to the availability of transport means and other amenities such as electricity, internet, sewage, and water systems (Watson, 2006). All these are basic physical systems that every business needs to thrive, and pharmaceutical companies are not different. They enable business operations to run smoothly by ensuring that communication takes place during production and that the products reach markets in different regions.
Long Term Assessment
- According to Statistics New Zealand studies in 2018, the health sector has a great potential to grow and compete in the world markets. Currently, the sector is doing very well. There is a publicly funded health system that has evidence of best practice. Most citizens are also happy with health services, a sign that the sector will have grown into a world class health system in the long term.