Porter's Five Forces Compared to Eli LillyThreat of New EntrantsThe threat of new entrants is relatively high. Companies that form alliances are potential rivals. Although previously such a company was not considered a threat, after merging with a research and development company or forming an alliance with another pharmaceutical company, it would become a rival to Eli Lilly. The threat is mitigated, however, by the significant research and development costs required to successfully enter the sector. Eli Lilly's focus on a relatively narrow sedative and antidepressant market weakens the threat of new entrants, but other products that account for a smaller share of the company's sales, such as insulin and others, are exposed to a strong threat from new entrants. The need to obtain certificates and licenses also weakens the threat of new entrants. The above leads to the conclusion that the threat of new entrants is medium. Bargaining Power of Buyers It tends to be high in the pharmaceutical sector because major sales are made using aggregate sales. Institutions that purchase drugs in large quantities take into account the discounts that drug producers are willing to give and are therefore able to influence prices. As long as Eli Lilly has competitors offering similar products, it will be evident that the bargaining power of buyers will be high for the industry. Buyers with lower purchasing volumes do not influence pricing policy, but these buyers are more numerous than wholesale buyers. It is also important that people who buy drugs for themselves are usually covered by health insurance and therefore are not interested in lowering prices. However, the sales volumes to these buyers are not significant. Bargaining power of suppliersIt is relatively weak. There is a demand for prescription drugs over the next 25 years. The number of people aged 45 to 64 will increase by 41% by 2015. Considering the increase in the elderly population and life expectancy rates worldwide as well as the level of use of pharmaceutical products by aging people, growth in the sector should remain on an upward trend. .- The pharmaceutical industry is relatively immune to the effects of economic cycles. Demand for the industry's products remains constant regardless of the economic cycle, because market demand is a function of the overall health of the population. However, the globalization of the pharmaceutical industry increases the risk associated with foreign investments and exchange rates. Companies in this sector seek to minimize risk by using hedging practices such as forward foreign exchange contracts, borrowing from foreign markets and currency swaps...