Merck Case Study
Merck & Co.
Executive Summary
Case Study Goal The goal of this case study is to examine the current operations of Merck & Co. Inc. and determine areas of potential concern, evaluate the effectiveness of the current business model, and propose a plan of action to grow Merck & Co. Inc. to be the largest pharmaceutical company in the world.
Methods of Analysis This case study will strive to identify areas of concern and opportunity, offer solutions, and make projections based upon historic data related to Merck and its competitors. The information utilized will be derived from sales figures, patents, balance sheets, cash flow statements, and income statements. Historical information including any past issues with drug recalls, lawsuits, management miscalculations, executive vision, or other issues will be examined. Proposed upgrades, solutions, and corporate direction will be offered; and a plan to fuse the existing business plan with a revised, more current business plan will be paramount.
Key Findings Willingness to innovate. The willingness to innovate in order to offset an empty drug pipeline proves Merck has moved beyond the stigma of being a traditional pharmaceutical company that uses an in-house research strategy. Dr. Turner, Merck’s Chief Strategy Officer, correctly identified the challenges facing Merck in a highly competitive field and gathered a diverse strategy team ranging from MBA apprentices to experienced executives (Rothaermel, 2013, p. c228). Dr. Turner explained the vast challenges facing Merck and the entire pharmaceutical sector, but then proposed a brilliant plan to grow by expanding on the 1% of world’s biomedical research performed by Merck and incorporating knowledge from all sources including universities, research institutions, and various other companies around the world (Rothaermel, 2013, p. c228). This decision by Merck was historic because it signified the end of utilizing only research performed in-house; but it
Executive Summary
Case Study Goal The goal of this case study is to examine the current operations of Merck & Co. Inc. and determine areas of potential concern, evaluate the effectiveness of the current business model, and propose a plan of action to grow Merck & Co. Inc. to be the largest pharmaceutical company in the world.
Methods of Analysis This case study will strive to identify areas of concern and opportunity, offer solutions, and make projections based upon historic data related to Merck and its competitors. The information utilized will be derived from sales figures, patents, balance sheets, cash flow statements, and income statements. Historical information including any past issues with drug recalls, lawsuits, management miscalculations, executive vision, or other issues will be examined. Proposed upgrades, solutions, and corporate direction will be offered; and a plan to fuse the existing business plan with a revised, more current business plan will be paramount.
Key Findings Willingness to innovate. The willingness to innovate in order to offset an empty drug pipeline proves Merck has moved beyond the stigma of being a traditional pharmaceutical company that uses an in-house research strategy. Dr. Turner, Merck’s Chief Strategy Officer, correctly identified the challenges facing Merck in a highly competitive field and gathered a diverse strategy team ranging from MBA apprentices to experienced executives (Rothaermel, 2013, p. c228). Dr. Turner explained the vast challenges facing Merck and the entire pharmaceutical sector, but then proposed a brilliant plan to grow by expanding on the 1% of world’s biomedical research performed by Merck and incorporating knowledge from all sources including universities, research institutions, and various other companies around the world (Rothaermel, 2013, p. c228). This decision by Merck was historic because it signified the end of utilizing only research performed in-house; but it
References: Chesbrough, H. (2003). The era of open innovation. MIT Sloan Management Review, 44(3), 35-41. doi: 224970683. Hsu, H. C. (2010). Using MSN money to perform financial ratio analysis. Journal of College Teaching and Learning, 7(9), 25-35. doi: 751262328. Merck Annual Report 2012: The road to tomorrow. Darmstadt: Merck KGaA, Group Communications. Retrieved November 13, 2013, from www.merckgroup.com/annualreport2012 Merck & co., inc Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation (1st ed.). Hoboken, New Jersey: John Wiley & Sons. Rothaermel, F. (2013). Strategic management: Concepts and cases. (1 ed., pp. 105-C233). New York, NY: McGraw-Hill/Irwin. U.S. Securities and Exchange Commission (2013). Retrieved from http://www.sec.gov/cgi-bin/viewer?action=view&cik=310158&accession_number=0001193125-12-084319&xbrl_type=v Exhibit A: Consolidated Income Statement.