Blockbuster Business Model

The Blockbuster business model refers to a model that involves spending significant capital on research and development in the hope of finding projects that that might turn to be a successful blockbuster and generate huge returns. Precisely, the economic activities of the project are project based (Hunger, Wheelen, Hoffman & Bamford, 2015). When using the model, the revenue generated is higher that the company will use it to pay development costs many times. The revenue realized is usually greater than the cost of the project.

The healthcare organization that might use this business model is Pfizer Company. Pfizer is among the top-ranked pharmaceutical companies in the world (Dogramatzis, 2010). The model is ideal for this company because it involves research and development whereby the company spends a considerable amount of capital on finding blockbuster drugs. For instance, in the pharmaceutical industry, companies expect an average drug to generate a 5% return on investment but successful blockbuster drugs yields approximately 10-20 times the amount generated by average drugs (Dogramatzis, 2010). Therefore, the pharmaceutical company such as Pfizer will use this model because the costs, risks, and rewards are high.

Dogramatzis, D. (2010). Healthcare Biotechnology: A Practical Guide. CRC Press.

Hunger, J. D., Wheelen, T. L., Hoffman, A. N., & Bamford, C. E. (2015).  Strategic Management and Business Policy (14th ed.). Upper Saddle River, NJ: Pearson Education


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