A framework to incorporate risk management in developing e-business alliances in the (para)pharmaceutical industry

Lately, large international production companies have made their appearance in the Greek (para)pharmaceutical industry. These companies, using economies of scale, may offer same quality products at lower prices. This forthcoming threat forced local production companies to seek defensive strategies in order to avoid great losses. These defensive strategies have been identified as electronic alliances between all these companies threatened by the advent of international big firms. However, electronic alliances cannot be easily formed and failing to efficiently establish an electronic alliance may lead to even greater problems than those which the alliance is supposed to solve. The paper describes the para-pharmaceutical supply chain and offers a research on the threats and opportunities that may affect the proposed e-alliance model. The main result is the list of the aforementioned risks that should be taken into account during the development of an electronic alliance In addition, in order to mitigate the harmful effects that hidden threats could cause, a framework for the development of such alliances is proposed. This framework serves as a starting point to develop electronic alliances and authors strongly believe that when partners do not adopt the considerations presented in the paper, alliances may have a slim chance to succeed. The Greek para-pharmaceutical industry was selected as a case study since, despite potential opportunities, no major penetration of e-business has been observed in that sector.