Eli Lilly and Company and Insulin Business
Eli Lilly, the global research-based pharmaceutical company which was found in 1876, now enters its 130th year of business. From a starting up company that was like dozens, maybe hundreds of other drug companies making and selling sugar-coated pills, fluid extracts, syrups and with hand work constituting the primary method of production to one of the major pharmaceutical company that dominated the industry in the world, Eli Lilly and Company has witnessed a momentous success. And one of the primary causes of Lilly's success was its dedication to energetically introducing improved methods of production and encouraging development of new products.
Given Lilly's great success and innovation orientation, In this case study, as we can see, Lilly has given ground to Novo-Nordisk in the battle for Insulin Global and domestic market share. At least, we can say Lilly has made a series of strategic mistakes that lead to substantial profit losses.
Despite Lilly's huge investment ($700 million) in the new genetically engineered human insulin--Humulin®, Lilly failed to market the new product right. The price was set too low: on realizing the mistake they set out to increase the price quicklymore that 30% in two years in US. However, this action wasn't possible in Europe's price controlled countries; clearly, the perceived value and future potential of the product had not been recognized or properly communicated prior to launch.
The global market for Insulin hasn't been extensively explored; looking back in history, Lilly should have done a much better job in promoting the new product than it did. And In order to expand the market, Lilly shouldn't just concentrate in North-American market; instead, a global vision of marketing strategy should have been developed. Unfortunately, till 1980 Lilly's Insulin product haven't successfully launched in Europe. From1980 to1995, Lilly's Market share in the world...