Merck was established in 1891 to improve human and animal health through the development of innovative products. Merck currently has two reportable segments, the Pharmaceutical Segment and the Vaccines and Infectious Diseases Segment. Merck sells products through several channels including wholesalers, retailers, hospitals, clinics, government and managed health services providers. In the 1980’s the Merck was very successful in producing 10 major new drugs and had a very healthy pipeline.
In later years, Merck has entered into joint ventures with many other pharmaceutical companies in order to expand its pipeline. In the last several years Merck has experienced a decline in revue do to several of their exclusive drugs going off-patent. Merck is currently the eighth largest pharmaceutical firm in the world. In 2009, Merck plans to further expand through a merger with Schering-Plough.
This will make Merck the second largest pharmaceutical company in the world. Mission Statement Analysis The mission of Merck is to provide society with superior products and services by developing innovation and solutions that improve the quality of life and satisfy customer needs, and to provide employees with meaningful work and advancement opportunities, and investors with a superior rate of return. ” Merck’s mission statement touches on many of the key factors that a mission statement should embody. The mission statement mentions providing society with superior products. In the pharmaceutical industry, Merck’s customers are anyone in society that may benefit from one of its products.
The Essay on Examples On Mission Statement
It is my position that a firm’s mission statement must clearly state their objectives and what principles their firm stands on. The following three mission statement are examples of poorly written, if not thinly disguised objectives which could only hurt their image and/or make it unnecessarily difficult to get support, VC (venture capitol) funds, etc. Analyses: Company # 1: The recruiter ...
The mission statement focuses on the people their business may affect including customers, investors and employees. Although Merck is a well known company, the mission statement does not describe the nature of the business in which they operate. As the statement mentions their business os to improve the quality of life, this could describe many businesses and products. The statement also neglects to mention the focus and market segments in which they compete. Internal Assessment Strengths Diversified Business Segments – Merck has business segments in Pharmaceuticals, Vaccines, Animal Health and Consumer Health. This allows Merck to diversify its revenue streams.
The consumer health division allows Merck to compete outside the prescription drug market. Merck continually works o diversify its portfolio through internal and external ventures. In 2008, Merck focused on new Bio Ventures Division, which uses a unique technology platform for new and follow-on biologics. (Merck 2008 10K) * Strong Research and Development – Merck spent an average of $4. B on research and development over the last three years.
Their research and development efforts not only work to create new products that will help better their customers’ living, but also work to find additional uses for existing drugs which will extend the patent life and preserve existing revenue streams. * Increased presence in emerging markets through the merger with Schering-Plough. As Merck is seeing a decline in domestic revenue, due to the expiration of patents, such as Flosamax in 2006, they are concentrating more on growth opportunities in emerging markets. Increased pipeline in vaccines and biologics through the merger with Schering-Plough.
As two of Merck’s most profitable drugs are coming off patent in the next four years, accounting for 35% of forecasted revenue, by merging with Schering-Plough, Merck’s revenue from expiring patents is reduced to 21%. * Distribution Channels – Merck has well established distribution channels in which the company’s professional representatives communicate the effectiveness and value of their products.
The Business plan on 63570 Competitor Business Market Give
Table of Contents Purpose Statement 1 Executive Summary 2 Business Information 3 Personal Financial Statement 3 Business Description 3 Business History 4 Personnel and Organization 5 Marketing Information 6 Market Analysis 6 Market Research 6 Competitors 7 Market Segments 8 Target Market 8 Marketing Mix Strategy 9 Products/Services 9 Promotions 9 Distribution 9 Pricing 10 Suppliers 10 Marketing ...
They market and sell though a variety of channels including drug wholesalers, hospitals, physician distributers and government entities. Weaknesses * Research and Development – although Merck spends in upward of $4B on research and development annually, the pharmaceutical business is heavily reliant on the success of a costly R & D department. In the last several years, Merck’s individual R &D department has not been able to keep pace with declining revenues from existing products. It is only through Mergers and Acquisitions that Merck has supplemented this income.
Large Balance, $1. 4B in goodwill on Merck’s Balance Sheet – the goodwill on Merck’s balance sheet is primarily attributable to past acquisitions. * Almost $4B in long-term debt on the balance sheet * Patent Expiration – in the next four years, the two highest sales producing pharmaceutical products will go off patent. Patents on Merck’s Cozaar and Singulair will expire in February 2010 and August 2012, respectively, exposing about $8. 2 billion worth of sales to generic competition. This equates to about 35% of Merck’s forecasted revenue in 2012 [and 29% of 2009 revenues]. Competitive Pricing –
Merck is sometimes forced to lower prices of products, either ones that have gone off patent to maintain market share in the product, as well as for products that are still on patent in order to compete with rival products for the same treatment that are marketed by competitors The Internal Factor Evaluation Matrix Based on the IFE Matrix, Merck registers a score of 2. 5 which is an average score. This indicates that Merck is steady in its control of the internal factors that affect its operations.
It also indicates that there is room for improvement in these areas and that a strategy should be formulated to maximize their strengths and minimize the company’s weaknesses. The factors that strongly hurt Merck’s rating are the expensive cost of research and development for the company, which is key to its success. Additionally the expiration of patents on strong revenue producing products makes it critical to replace that revenue in order to continue on pace. External Assessment Opportunities * Demographic: The aging of America can be an opportunity for Merck.
The Business plan on Augustine Medical Inc Product Price Market
Introduction (Background and Situation) Augustine Medical, Inc. was founded by Dr. Scott Augustine, an anesthesiologist from Minnesota, in 1987. The company was created to develop and market products for hospital operating rooms and postoperative recovery rooms. The company provides innovative solutions to combat postoperative conditions such as hypothermia. Medical research indicates that 60 to ...
As the baby boomer generation is reaching its retirement age, the population is shifting to a greater number of people in their sixties and older. Statistics show that the over 65 age group uses three times more drugs than the younger population. As Merck has had success in arthritis and cholesterol medicines already, there is going to be a greater demand for drugs that make living longer possible as well as more comfortable. * Viruses and Epidemics: As Merck’s sales from vaccines and infections increases, there are opportunities for Merck to capitalize on new epidemics.
The recent history of the H1N1 flu virus made the production of a new flu vaccine very profitable for some firms that had the capacity to produce it rapidly. * Advertising – the permitting of DTC (direct-to consumer) advertising is allowing pharmaceutical companies the opportunity to reach out directly to consumers and educate them on the available drugs and they may enhance their lives. Additionally it also discusses the side effects of the side effects of the drugs and how they may interact with existing drugs and conditions in one’s life.
Emerging Markets – Merck is focused on increasing its presence in emerging market. They have shifted their investments from mature market to emerging markets. In 2008, while their domestic sales declined 9%, foreign sales rose 10% (Merck 2008 10K).
* Mergers and Acquisitions – Merck and many other big pharma companies have trended towards acquiring other competitors in order to strengthen their pipelines and diversify their product base. Merck’s merger with Schering-Plough will increases its presences in the biologics field of vaccines.
Threats * Increased Government Regulation – Beginning in 2009, the FDA implemented a series of reforms that include stricter monitoring of drug adverse events, more funding for the agency, stronger ability to force product recalls, more scientific expertise within the agency, more transparency. While the tightened regulations and increased transparency will eventually improve the overall quality of pharmaceutical products, companies will have to adjust to the stricter standards and stronger enforcement Lawsuits.
The Essay on Products And Services For Consumers
Everyone is ignorant, only on different subjects. To learn is to acquire knowledge or skill. Learning also may involve a change in attitude. Learning is not just a change in attitude; it is a change in the way a man thinks, understands, or feels. Learning some things depends on other perceptions which have preceded these learning’s, and on the availability of time to sense and relate these new ...
The possibility of a lawsuit due to side-effects of the products Merck provides to consumers is a serious threat. The 2007 settlement of the Vioxx Lawsuit cost Merck $750 million in settlements to date. Additionally there are several other ongoing lawsuits which Merck is a currently undergoing. * generic drug Products – The threat of a less expensive substitute product is always a possibility in the pharmaceutical industry. Not only do company’s scramble to reproduce existing products once they go off patent, but other substitute generics are sometimes vailable to threat the same illnesses at a lower cost.
Other consumer supply channels: the aging of the population has also given rise to an increased need for cheaper drugs. The high cost of prescription drugs in the United States, has forced customers to look elsewhere, mainly Canada. * Economic Forces – with a recession beginning in 2008 and the high unemployment rates, there is a decline in US spending and customers who have insurance. This lack of insurance can cause potential customers to forgo medical treatments or uses cheaper generic substitutes. The External Factor Evaluation Matrix
The external factor evaluation matrix suggests that Merck does a slightly above average job at dealing with extern forces that impact their business. The key drivers of their external score are the changing demographics of the population which indicate a growing need for the products Merck provides. Additionally focuses on new markets and expanding globally should provide new revenue streams for Merck. In order to maintain and expand growth potential, mergers, joint ventures and collaborations with competitors are key strategies that Merck should capitalize on.
The results of the Competitive Profile Matrix (CPM) reveal the Merck excels in segment/ product diversity. Its consumer products division, vaccines and pharmaceuticals division offer differentiation in products and revenue streams. The CPM also reveals that Merck needs to focus its resources and strategy on improving global expansion and its pipeline to counteract expiring patents. Competitive Analysis: Porters Five Forces Rivalry among competing firms – The Pharmaceutical business is highly competitive and the high cost of Research and Development makes it difficult to compete in the industry.
The Essay on The Ideal Customer Product Drug Drugs
When asked to describe the ideal customer for my company, I thought it would be very simple. First, the customer would need my product badly. Second, they would have deep pockets. Finally, if the product was not as good as they expected, they wouldn't complain at all and still buy my company's product. As it turns out, that was just too simple. As I began to analyze the ideal customer for my ...
Merck competes with rivals on several of their main revenue producing drugs, for example, Merck’s Zocor, used to treat high cholesterol is in direct competition with Pfizer’s Lipitor. Merck is also faces direct competition from new products that competitors may develop that treat the same diseases better or have less side-effects. Potential entry of new competitors – As the cost of producing new pharmaceutical products is high, it is difficult to enter in the business.
The threat of new entrants merges from generic drug manufacturers entering into the same drug production as Merck after products are released from patent protection. Potential development of substitute products – Competition for existing drugs, even those protected by patents is fierce given that the number of compounds available to treat diseases increases annually. Additionally generics are rapidly being developed to replicate existing products when they come off patent. There is also a push from many generic drug producers to argue for products to be released from patent earlier than the initial patent expiration date.
This can have an adverse impact on projected revenues for Merck. Bargaining power of suppliers – Merck is subject to certain restrictions when dealing with suppliers. It needs to work only with suppliers that comply with current Good Manufacturing practices and other regulations. This restricts the available suppliers for Merck and gives their suppliers bargaining power. Bargaining power of consumers – Merck faces pressure from customers where there are alternate products or alternate channels to obtain certain drugs.
