Merck & Co Case Analysis
1. Problem Statement –
Merck & Co ‘s stock market performance had trailed that of competitors in light of the concerns that company was not able to adapt to the changes in environment
where as competitors was using their aggressive marketing functional unit as their competitive edge. Company also failed to take advantage of its own market opportunities especially the outcome of aftermarket studies of drugs they launched .Company was very late in adapting to marketing trends like DTC (Direct to Customer) advertising where competitors took advantage of. Company also suffered from poor coordination between the focus/Franchise groups and functional units which affected the response time to the market needs.
2. Problem Analysis –
Merck & Co which was built on functional organization structure adopted a differentiation strategy by developing breakthrough drugs in new theraupeutic categories.
Company competed in the industry on the basis of innovation and by providing supreme products to the market. Marketing had little or less role in company’s success in the initial stages. Company operated in a simple and steady environment and was successful with the functional structure in the earlier stages.
In 1980s and 1990 Merck‘s pharmaceutical business required to operate in simple and unstable environment with the introduction of generic drugs, declination of product exclusivity periods duration, MCO regulations etc . Merck’s environment structure was not ready to adapt to the changes , company’s CEO, Roy tried to tackle the situation without changing the organization structure by scientific shortcuts, acquisition of MCO , entering into generic drug business etc , However with weak marketing wing and lack of horizontal coordination between functions , Merck couldn’t even make use of DTC advertising which was prominent during that time to succeed in the pharmacy industry, After market study of a drug or...
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