Pepcid Analysis

Topics: Over-the-counter drug, GlaxoSmithKline, Prescription drug Pages: 13 (3815 words) Published: November 15, 2010
In March 1989 Merck joined with Johnson & Johnson, the world’s largest diversified healthcare company, to form the joint venture Johnson & Johnson/Merck Consumer Pharmaceuticals Company (JJM). JJM produces Pepcid which belongs to a class of drugs known as H2 – receptor antagonists. Pepcid is in a class of medications called H2 Blockers. It decreases the amount of acid made in the stomach. Prescription Pepcid has been prescribed in the treatment of peptic ulcers (along with a course of antibiotics), gastro esophageal reflux disease (GERD), esophagitis, and Zollinger-Ellison syndrome. Over the counter (OTC) Pepcid has been prescribed by doctors for the treatment and prevention of acid indigestion-related heartburn and sour stomach. A SWOT analysis of JJM will be used to examine what the company does well and what aspects may need some attention. JJM has many opportunities that are available to them in the future. We will examine a weighted average assessment of internal weaknesses and strengths exhibited by JJM. We will also see JJM’s response to external opportunities and threats within its environment. We will also examine Competitive profile matrix, Competitive advantage analysis, 5 porter’s forces, marketing mix the 5 Ps, key issues and recommendation for JJM's Pepcid AC.

Internal Factor Evaluation (IFE Matrix)

Internal Factor Evaluation
Matrix (IFE Matrix)
What are those factors in the internal environment which are critical to the future success of the organization? Does management have control over them? (The answer should be yes)Relative Importance of that factor in the firm's industry 0=Not Important;

1=Very Important or CriticalHow well has the firm, or its strategies, responded to the factor? 1 = poor response
2 = average response
3 = above average response
4 = superior response < 2.50 = the firm and its strategies are not capitalizing on opportunities or avoiding threats. > 2.50 = the firm, and/or its strategies, is/are responding well to threats and opportunities in its industry. STRENGTHS

The joint venture between Johnson & Johnson and Merck0.2541 Research and development expertise0.0230.06
Recognizable brand name0.130.3
Consumer marketing and sales expertise0.240.8
Global span0.0140.04
Product differentiation0.341.2
Strong retail distribution channel0.0530.15
Lack of experience switching from prescription drug to OTC0.0210.02 Lack of experience of corporation between the two companies' representatives0.0120.02 Brand recognition struggle in its category0.0310.03

Lack of experience in a joint venture0.0120.02
Total1 3.64
3.64 > 2.5

JJM exhibited internal weaknesses and strengths within its environment rated above weighted score of 3.64 on a scale of 1 to 4.
The joint venture between Johnson & Johnson and Merck
Joint venture saves each other time, money and reduces business risk. In 1989 Merck joined with Johnson & Johnson in a venture to develop over-the-counter (OTC) versions of Merck's prescription medications, initially for the U.S. market, later expanded to Europe and Canada. The new entity will build upon the success of the European joint venture that will be well-positioned to benefit from the local North America and the changing European market for non-prescription. Research and development expertise

JJM united with Merck thus optimizing Merck’s research and development expertise. This marriage between the two companies potentially increases JJM’s prospects for future growth and success. Recognizable brand name

"Pepcid AC" is the brand name of "famotadine" (the generic name). Pepcid has a unique catchy trademark that is well recognized among consumers. It is a competitive histamine H2-receptor antagonist that is used to treat gastrointestinal disorders such as gastric or duodenal ulcer, gastroesophageal reflux...
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