Assess the ways in which specialization might give a business, such as Pfizer, a competitive advantage when trading internationally. - Edexcel - A-Level Business - Question 2 - 2017 - Paper 1

The concentration of market power and specialization among few firms in the healthcare sector enables them to set high standards and create barriers to entry for other competitors. Pfizer, being a major player, benefits from economies of scale and recognition that smaller firms may lack.

By investing heavily in R&D, Pfizer can innovate and bring advanced drugs to market more quickly than competitors. This specialization in research allows them to take advantage of international markets where there is a high demand for innovative health products.

To maintain sufficient revenue to cover high R&D costs, Pfizer may need to access international markets, increasing their sales potential and diversifying their risk by not being reliant on a single market.

Since Pfizer does not directly compete in the same space as other companies like AstraZeneca, they can often set prices to maximize profit without being undercut by similar products, giving them a pricing advantage in international trade.

While specialization brings advantages, it can also make Pfizer vulnerable to shifts in market demand for specific products, affecting overall revenue. Thus, they must stay adaptable within their specialized focus.