STRATEGIC MANAGEMENT

BY GROUP 8
A011 DISHA DAVE
A018 RUCHA JAVKAR
A039 SUNIL PUNJABI
A043 MALIKA SAINI
A049 SAHIL SHETTY
ABOUT MERCK
 VISION
To make a difference in the lives of people globally through our innovative
medicines, vaccines, and animal health products. We are committed to being
the premier, research-intensive biopharmaceutical company and are
dedicated to providing leading innovations and solutions for today and the
future.

MISSION
To discover, develop and provide innovative products and services that save
and improve lives around the world.
 BARRIERS TO ENTER ARE HIGH BECAUSE OF
REGULATIONS AND HEAVY INVESTMENTS IN
R&D AND MARKETING
LOW

HIGH
BECAUSE OF MODERATE/LOW
MANY PLAYERS
AND TREND FOR FROM GENERICS
MERGERS AND AND
ACQUISITIONS IN BIOTECHNOLOGY
RECENT YEARS TO SYNTHETIC
PRODUCTS

LOW LOW TO MODERATE

MAINLY DEPENDS ON
ORGANIC CHEMICALS. AN END CONSUMERS ARE
INCREASE IN NO. OF NOT VERY PRICE
SUPPLIERS LEADS TO LOW SENSITIVE BUT
SWITCHING COST INSURANCE COMPANIES
AND MEDICAL
PRACTITIONERS ARE
PESTLE ANALYSIS
POLITICAL • BIENNAL PRICE REDUCTION
• REDUCED SPENDING ON PRESCRIPTION DRUGS

ECONOMIC • HEALTHCARE COST CONTAINMENT

• GOVERNMENT MANDATED PRICING
• EMERGENCE OF GENERIC COMPETITION
SOCIAL • MERCK FELLOWSHIP FOR GLOBAL HEALTH
• THE MERCK FOUNDATION
• MEDICAL OUTREACH PROGRAM
• US PATIENT ASSISTANCE PROGRAM

TECHNOLOGICAL • CYBER-ATTACKS
• NEW INNOVATIONS
• PRESENCE IN SOCIAL MEDIA

LEGAL • COMPANY & BRAND IMAGE

• DISCLOSURE OF SENSITIVE INFORMATION

ENVIRONMENTAL • WASTE MANAGEMENT

• ENERGY CONSUMPTION
• CLIMATE CHANGE
 IFE MATRIX
STRENGTHS WEIGHT RATING WEIGHTED SCORE
Strong Distribution network with a large number 0.1 4 0.4
of outlets
Low-cost structure 0.05 2 0.1
High volume of product approval by FDA 0.2 3 0.6
Diversified Product Portfolio 0.2 3 0.6
Sophisticated Online Search Tool 0.05 2 0.1
(mercksource.com)
IPhone application 0.05 2 0.1

WEAKNESSES WEIGHT RATING WEIGHTED SCORE

A high proportion of property in use by Merck is 0.1 1 0.1
on rent

Low amounts of spending on research and 0.2 3 0.6

development as compared to the competition
It has a high employee turnover rate 0.05 2 0.1

TOTAL 1 2.6
OPPORTUNITIES
EFE MATRIX
WEIGHT RATING WEIGHTED SCORE
Constant growth of pharmaceutical and Health 0.3 4 1.2
Care Industry by 10%

Household income is increasing and so is the 0.1 2 0.2

consumer spending
Interest rates are low, which provides an 0.1 2 0.2
investment opportunity for large projects

THREATS WEIGHT RATING WEIGHTED SCORE

More substitute products are now available 0.2 3 0.6

Competition within the industry is increasing 0.2 3 0.6

New entrants coming into the market 0.1 2 0.2

TOTAL 1 3.00
 IE MATRIX
HIGH
EXTERNAL FACTOR EVALUATION

3-3.99

MEDIUM
2-2.99

LOW
1-1.99

WEAK AVERAGE STRONG

1-1.99 2-2.99 3-3.99

INTERNAL FACTOR EVALUATION

 COMPETITIVE PROFILE MATRIX
MERCK GSK PFIZER

Critical Success Weight Rating Weighted Rating Weighted Rating Weighted

Factors Score Score score
Acquisition 0.1 3 0.3 1 0.1 4 0.4

Product 0.1 4 0.4 3 0.3 4 0.4

Diversification
Product Quality 0.2 2 0.4 2 0.4 4 0.8

Marketing 0.15 3 0.45 4 0.6 4 0.6

R&D 0.15 2 0.3 3 0.45 4 0.6

Patents 0.15 3 0.45 2 0.3 3 0.45

Transparency 0.1 3 0.3 3 0.3 3 0.3

Profit Margin 0.05 4 0.2 3 0.15 2 0.1

TOTAL 1 2.8 2.6 3.65

 BCG MATRIX

MARKET GROWTH RATE RELATIVE MARKET SHARE

•KEYTRUDA •NOXAFIL
•JANUVIA •ISENTRESS
•JANUMET •ZOSTAVAX

•GARSASIL •NUVARING
•BRIDION •VIOXX
•ZEPETIER •SINGULAIR
•NASONEX
•VYTORIN
ANSOFF MATRIX

JANUVIA,JANUMET EBOLA ZAIRE DISEASE VACCINE

LYNPARZA, LENVIMA

KEYTRUDA Acquire Antelliq Group

(Antelliq)

TOWS
MATRIX
OPPORTUNITIES
•Constant growth of pharmaceutical
and Health Care Industry by 10%
•Household income is increasing
and so is the consumer spending.
•Interest rates are low, which
provides an investment opportunity
for large projects.
THREATS
•More substitute products are now
available.
•Competition within the industry is
increasing
•New entrants coming into the
market.
STRENGTHS
•Merck has a Strong Distribution network with
a large number of outlets.
•It has a low-cost structure, which provides it
with an advantage over the competition.
•High volume of product approval by FDA
•Diversified Product Portfolio
•Sophisticated Online Search Tool
•IPhone application
S-O STRATEGIES
•Increase marketing to attract consumers to
spend  packages and benefits to employees
•Use its presence on social media for
marketing and to attract customer towards its
website
•. Utilize Combined capacity to stay ahead of
competition and exceed industry growth of
10%
S-T STRATEGIES
•Use a strong distribution network to reach out
to customers and fight off new entrants into
the market
•Focus on innovation to reduce the
competition.
WEAKNESSES
•A high proportion of property in use
by Merck is on rent, and rental
charges need to be paid.
•Low amounts of spending on
research and development as
compared to the competition.
•It has a high employee turnover rate
W-O STRATEGIES
•Increase payrolls, provide incentive
to reduce turnover
•Finance ownership of the property
through low interest rate to increase
the proportion of owned property to
rented property
W-T STRATEGIES
•Increase spending on research and
development to enable Merck to
better compete with competition
 DECISION STAGE
• Market expansion of Nuvaring other than US

• Market expansion of Zostavax in US

• Increased investments on star products like Keytruda

• Patent protection of the products and increased expenditure on R & D

• Increased focus on strategic alliances and competitors such as generics & substitutes

• Foolproof planning w.r.t to privacy risks and its effect on manufacturing operations

• Increased focus of digitalization and social media presence

 RECOMMENDATIONS
PROBLEM
Market expansion of Nuvaring outside US
Market expansion of Zostavax in US
Increased investments on products like
Keytruda
RECOMMENDATIONS
• Demands need to be created in countries like
CHINA and INDIA were there is potential
available for the marketing the device
• Patient awareness regarding family planning &
ease of use can also be advertised for the same
• Increased field force and Social media presence
can be used for creating awareness
• Brand could be promoted to CDC w.r.t efficacy &
quality to its competitors
• Could form a strategic alliance with GSK for Co-
marketing of shingles vaccine in US
• Being approved for multiple indication Keytruda
should be branded in markets all over the world
• Merck can promote itself as an out licensee in
markets of developing countries to increase its
reach
• Eg Strategic collaboration of Merck with Eisai as
monotherapy & Combination
PROBLEM
RECOMMENDATIONS
RECOMMENDATIONS
Patent protection & increased • Diversification of brands whose patent are expiring
investment on R&D • Settlement if any w.r.t patent infringement
• Anticipating the growth or decline of brand after
patent expiration
• To protect its patent rights, the Company may file
patent infringement lawsuits against generic
companies eg Januvia, Noxafil etc

Increased focus on strategic alliances
and competitors such as generics &
substitutes
• Eg Total alliance revenue for lynparza and Lenvima
was about 200 million dollars in 2018
• The Company should acquire and market products
through external alliances, such as licensing
arrangements and collaborations, by refining its
sales and marketing efforts to address changing
industry conditions

Foolproof planning w.r.t to privacy risks • The Company should implement variety of
and its effect on manufacturing measures to enhance and modernize its systems to
operations guard against cyber-attacks

• Should ensure these attacks won’t hamper

operations of company
PROBLEM
RECOMMENDATIONS
RECOMMENDATIONS

Increased focus of digitalization and • Company Social Media Policy should guide
social media presence employees on appropriate personal and
professional use of social media about the
Company

• The process should be in such a way that

information is protected and completely secured
 CONCLUSION
• The pharmaceutical company carries a fair share of hurdles for any company to handle

• Factors such high cost of research, regulated market, generic competition, advertising
expenses and highly concentrated market has its financial implications on the company

• Along with it constant internal changes such as merger and acquisitions, litigations etc. also
incurs cost which adds on to all the cost bore through the product life cycle of a molecule
which finally reached to the consumer
 REFERENCES
• https://s21.q4cdn.com/488056881/files/doc_financials/2018/
Q4/2018-Form-10-K-(without-Exhibits)_FINAL_022719.pdf
• https://www.merck.com/about/our-history/timeline/index.ht
ml
THANK YOU