Inthis paper, the Turkish medicine sector will be analyzed according to number ofsellers, cost conditions, number of buyers, demand conditions, behavioralassumptions such as objective function,strategic variable, expaction of rivals’ reaction. After that, the Turkishmedicine sector’s market structure will be decided.Accordingto the statistics of the Report of Turkish Medicine Sector of 2017 given byQuintilesIMS Turkey, two million medicine had been sold. the most popularproducts of the sector were firstly, painkillers; and secondly, antibiotics. Inaddition to these, The Turkish Medicinesector had widened %17 comparing to 2015.
And these statistics in the report,Turkey will be the 14th medicine market in the world, if all the things go wellfor it.Firstof all, to analyze the number of sellers,In the market of the medicine inTurkey, there are some firms which dominates the sector and becoming pioneersof the market. To mention about these firms, for instance, Bilim ?laç, Abdi?brahim, Bayer, Novartis, Zentiva, Deva, Pzifer, GlaxoSmithKline, Santa Firma,Nobel ?laç, Eczac?ba??, Biyofarma, Ali Raif, Fako, Koçak Farma, ?.E Ulagay.
Asit can be seen, there are many firms (sellers) in the market. These firms, ofcourse, were the dominant ones. There are some other sellers in the sectorwhich operate in the medicine market.
There are no barriers to entry the sectorin Turkey. It is easy to entry market for a firm, because no single or fewfirms dominate the sector. The sellers in the medicine sector are price makers,rather than price takers. They have an authority to decide about the prices,they do not take the price as given by the market conditions.Secondly,cost conditions for the Turkish market of medicine, the suppliers have a biginfluence on it.
As more suppliers are used in the production process ofmedicine, the marginal cost will rise since diminishing returns exist in theshort-run. Hence, marginal cost will increase- to talk about cost conditions.Thirdly,in terms of number of buyers, the Turkish Medicine sector has lots of sellersfor their products. Almost all people use different medicines for their differenthealth problems.
It can not be imagined that a person does not use medicine inthe modern era. Since almost all people buy medicine, the market of medicine inTurkey does not lack of buyers, there is no scarcity of buyers. Hence, thereare many buyers in the market as there are many sellers, firms.Interms of demand conditions, the products, medicine, in the market are verysimilar, but not absolutely identical. Since medicines are produced in anaccordance with diseases which they will cure, each firm have an ability toproduce that spesific medicine. All medicines are used for curing diseases, ofcourse and the demand conditions in the market is based on similar products, insome areas they may differ in terms of which disease they cure etc.
Tomention about the behavioral assumptions of the Turkish medicine sector, thereare also some features which are necessary to have a clear idea about themarket. First of all, objective function of the sector is one of thesebehavioral assumptions. The objective function of the Turkish medicine marketis to stabilize short-run profit maximization. The firms in this sector set the goal of having profit-maximization inshort run rather than long run. There is no need to establish aims for the longrun in the medicine market since medicines are the products that are alwaysneeded. That’s why, the firms in the sector seek for profit maximization in theshort run.Consideringthe strategic variables, there exist some variables which matters for theentire medicine market. The amount of quantitiy is very high, although each medicineis produced for spesific diseases.
And firms are able to decide about the pricefor their products. For instance, the distribution of channels is one of thecrucial strategic device for it. The medicines produced in the Turkish sectoris divided among several mediums which make the medicine spread to thedifferent channels. For example, pharmacies are the main medium for selling themedicine. In addition to pharmacies, there are some firms which introduces their newly-produced medicines tothe doctors. The doctors can be aware of these newly-produced medicines and canmake a recipe for their patients to cure their diseases. Secondly, productdesign is also significant for this sector. The design of the medicineregarding their color, shape, size matter so much for the buyers.
For example,some firms may change their products in terms of shape and color each timeperiod of production. The design of the medicine may have psychologicalinfluence over people. And this situation affects selling amounts of theproduct. In terms of promotional efforts, it is lower for the medicine market.Because it is not a must to use promotional strategies to increase the numberof selling medicine, since medicine is a basic need for people in this modernera for health issues.Lastly,since there are lots of firms(sellers) in the medicine market for Turkey, thereaction of the rival firms is very low since one single firms is a small partof the whole market.
Each firms has their spesific product, and these productsare used by buyers to cure diseases. There is not a dominance of a single firmor few firms and this situation will cause to the fact that each single firm isnot dependent much on other, rival, firms’ reaction to its acts.Allin all, according to these features mentioned in this essay, the marketstructure of the medicine in Turkey is monopolisticcompetition. There are many sellers, and also, many buyers in the market,the sellers produce very similar products, and the amount of quantitiy is veryhigh.
Sellers are price-takers in the market. And since there are lots ofsellers in the market, one single firm is independent from other firms in termsof their reaction. When these assumptions are taken into consideration, it canbe said that monopolistic competition is the market structure of the TurkishMedicine Sector.