Merck Swot Analysis Stakeholder Evaluation free essay sample

Merck and Company, Inc. : SWOT Analysis and Stakeholder Evaluation Merck and Company, Inc. , a. k. a. Merck, is a leading worldwide pharmaceutical company that engages in manufacturing and marketing medicines, animal products, vaccines, and consumer health products. As most companies, Merck desires to continue their success as one of the top health care innovators in the world. Conducting a SWOT analysis can give them insight into internal strengths and weaknesses as well as external opportunities and threats. By way of the analysis, the company can obtain a clearer understanding of where it needs to improve and grow, and anticipate future threats to react effectively. Further, this valuable information is used by managers within the organization to satisfy needs of stakeholders as well as provide investors with sound information to help make informed decisions regarding their willingness to invest in the company. Ranking as the second largest healthcare company in the world, after the merger with Schering-Plough, Merck has set the standard for what it means to be an industry leader. We will write a custom essay sample on Merck Swot Analysis Stakeholder Evaluation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Deriving from their company website, their vision is to â€Å"make a difference in the lives of people globally through†¦innovative medicines, vaccines, and consumer health and animal products† (â€Å"The New Merck,† 2010). Merck’s mission is to create distinctive products and services that will save and improve lives and satisfy customer needs. They seek to gain recognition as possessing an exceptional working environment, and offer investors a superior rate of return (â€Å"The New Merck,† 2010). Finally, they stand for â€Å"excellence in science and healthcare innovation, with an emphasis on addressing unmet medical needs; focus[ing] on patients and anticipating customers’ needs; and commitment to expand access to [their] medicines and vaccines, and to improve global health† (â€Å"The New Merck,† 2010). A SWOT analysis is a useful tool to stay committed to the vision and mission prescribed above. This analysis evaluates an organizations strengths, weaknesses, opportunities, and threats as it pertains to a specific objective. Strengths and weaknesses are typically internal factors which are more easily fixed, whereas opportunities and threats are external factors that cannot always be anticipated (Robbins Judge, 2011, p. 183). Conducting a SWOT analysis on Merck will shed light on its position within the pharmaceutical manufacturing industry. After the merger with Schering-Plough in November 2009, Merck became the second largest drug manufacturing company in the world generating $45,987. 00 million in revenue for December 31, 2010 fiscal year, according to Business Company database. The merger also expands Merck’s product portfolio, including areas of research and development in which Merck is lacking (â€Å"Merck and Schering-Plough mega-merger will create a company greater than the sum of its parts,† 2009). Gains in sales growth will occur with its new product launches such as Cozaar and Hyzaar for cardiovascular treatment, Dulera for respiratory therapy, and Simponi as an immunology drug. In addition, Merck’s already active product line such as Januvia for diabetes, Gardasil for the human papillomavirus, and Isentress for HIV will also add to Merck’s long-term sales growth (Hoover’s Inc. 2011). According to Hoover’s Inc. in-depth analysis of Merck Co. Inc. , â€Å"The acquisition of Schering enables Merck to potentially achieve $3. 5 billion in annual cost-saving synergies by 2011† (Hoover’s Inc. , 2011). Merck has also decided to expand its market outreach to India, and hope to encompass other countrie s such as China, South Korea, Russia, Brazil, Mexico, and Turkey. By expanding to global emerging markets, Merck can expect to obtain a growth in pharmaceutical sales over the next few years (â€Å"Closing the Gap,† 2010). With an immense competitive environment success is not without its drawbacks. Merck was forced to pull their blockbuster arthritis medication, Vioxx, off the market because of its high risk to stroke or heart attack after continued use. Merck spent millions of dollars on the marketing campaign for Vioxx, which paid off in its $2. 5 billion worldwide sale, all of which is at a loss to the company now (Gorman Kher, 2004). In 2012, Merck stands to lose patents on popular asthma medication, Singulair, which accounts for 10% of the combined sales of Merck and Schering-Plough (Hoover’s Inc. 2011). Finally, competition over generic products will hurt sales for Merck’s brand named products (Hoover’s Inc. , 2011). Competition with pharmaceutical company Pfizer will create looming threats toward Merck. Pfizer recently merged with Wyeth making them largest pharmaceutical company. This merger allowed Pfizer to gain a new product line and increase sales (Marino, 2009). Merck will need to be more vigilant in creating new products; however, they also must worry about the FDA approval on new products. Finally, government regulation on product pricing can affect Merck ecause it forces them reduce prices (Hoover’s Inc. , 2011). To better meet the needs of stakeholders, the company must understand its pros and cons, and conducting the SWOT analysis sheds light on those pros and cons. Stakeholders are entitled to know what is going on within the business because choices that the business makes effects stakeholders and vice versa. For example, suppliers of an organization share a common interest in the growth and prosperity of the organization their supplying to because they stand to gain or lose business from them. Therefore, it is the responsibility of the organization to meet the needs of the suppliers by making sound business decisions to increase the growth of the organization. Merck identifies five stakeholders for which it needs to satisfy, who are customers, employees, shareholders, community and society, and suppliers. According to â€Å"Code of Conduct,† 2011, customers include patients, consumers, health care professionals, health care organizations, government agencies, wholesalers, and distributors. The wants and needs of customers are generally quality products and services, and to be treated with the integrity by having the customers best interest at heart. Information regarding products and services should be clear and informative, and by no means ambiguous. Merck maintains that â€Å"Information furnished to our customers about our products and services, including the availability and delivery, must be useful, accurate, supported by scientific evidence where relevant and presented honestly, fairly and by proper means† (â€Å"Code of Conduct,† 2011, p. 7). Merck believes in fair competition and tries to keep prices of products and services at a competitive rate. They do not believe distorting the image of their competitor products (â€Å"Code of Conduct,† 2011, p. 8). Although Merck follows a specific code of conduct, it is impossible to please every customer. The drug Vioxx had to be pulled off the market because of unforeseen side effects. Merck should have disclosed every side effect clearly to its customers as prescribed by their code of conduct; however, it did not happen in reality. Anyone who took the drug for more than 18 months had doubled the risk of stroke or heart attack. In an effort to correct their mistake, Merck pulled the drug off the market (Gormon Kher, 2004). An employees needs are fair compensation, a safe work environment, and fair treatment. Merck believes that compensation is based on the employees’ merit, experience, and other work-related criteria. They seek to gain a diverse workforce recruiting those from a variety of different backgrounds. By complying with safety and health regulations, and keeping their businesses up to code, Merck provides a safe working environment for employees. When accidents occur, they follow through with appropriate channels alleviate the situation. Merck follows an open communication policy among employees to encourage them to speak freely and voice opinions. They respect the rights of colleagues and realize employees will disagree. They wish to promote an environment open communication; however, each employee must be willing to â€Å"agree to disagree† (â€Å"Code of Conduct,† 2011, p. 16). Shareholders invest money into organizations in hopes of more valuable returns. Shareholders also have the power to make decisions within the company. Balancing the needs of shareholders and the company can be difficult. Merck makes decisions in the best interest of the company, and avoids conflicts of interest; however, shareholders are not always satisfied. For example, Merck’s decision to pull Vioxx off the market had a significant impact on shareholder investments, and also led to lawsuits against Merck further forcing them to make payouts to investors (Holland, 2009). Merck is focused on helping organizations that benefit society. Through the Merck Company Foundation, Merck â€Å"donates products and other in-kind services to qualified organizations and programs that address the needs of society†¦Ã¢â‚¬  (â€Å"Code of Conduct,† 2011, p. 27). They also believe it is their responsibility to protect the environment in any country they are in. In an effort to handle their products in the most environmentally responsible way, Merck provides their consumers with information to educate them on proper disposal methods and rules and regulations that must be abided (â€Å"Code of Conduct,† 2011, p. 28). In addition, they advocate for the welfare of animals, and plan studies that limit the amount of research conducted on animals wherever possible (â€Å"Code of Conduct,† 2011, p. 29). As a mutual fund manager, the decision on whether to invest in Merck Co. , Inc. is a difficult decision. Weighing the pros and cons from the SWOT analysis can help make decisions easier. Merck has benefited people throughout the world with products that have saved lives. Ongoing research and development will create newer medicines and vaccines that will continue to help people in years to come. They have experienced drawbacks through patent losses, and have come across litigation issues that negatively affected Merck; however, it did not ruin their reputation as one of leading pharmaceutical marketing and manufacturing companies in the world. Their values are incorporated in every aspect of business such meeting the needs of their customers, employees, shareholders, and community. Merging with the Pfizer Plough strengthened their hold in the pharmaceutical industry by adding a new product portfolio that will add to areas of research and development in which Merck is lacking. In addition, Pfizer Plough’s products add to Merck’s sales and increases profits each year. The potential for Merck to grow within the pharmaceutical industry is high; therefore, investing would be a good business decision. Why not be a part of a company who has a corporate responsibility of â€Å"Helping the World Be Well? † References Closing the gap. (2010). Country Monitor, 18(44), 5. Retrieved from EBSCOhost. Gormon, C. , Kher. U. (2004). A Painful Mistake. Time Inernational (Canada Edition), 164(15), 30. Retrieved from EBSCOhost. Holland, J. (2009, December 3). Court hears arguments in Mercks Vioxx appeal. Buffalo Law Journal. p. 11. Retrieved from EBSCOhost.. Hoover’s Inc. (2011, August 17). Merck Co. , Inc. Hoover’s Company Records – In – Depth Records. Retrieved August 19, 2011 from Hoover’s Academic database. Marino, J. (2009). Big Pharma’s Mid-Market Influence. Mergers Acquisitions Report, 22(18), 12. Retrieved from EBSCOhost. Merck. (2011). The new merck. Retrieved from http://www. merck. com/about/home. html Merck. 2011). Code of conduct: Our values and standards. Retrieved from http://www. merck. com/about/code_of_conduct. pdf Merck and Company, Inc. Company Profile. d. n. DC305661. Retrieved August 19, 2011 from Business Company database. Merck and Schering-Plough mega-merger will create a company greater than the sum of its parts. (2009). PharmaWatch: Monthly Review, 8(4), 25-27. Retreived from EBSCOhost. Robbins, S. P. , Judge, T. A. (2011). Organizational Behavior (14th ed. ). Upper Saddle River, NJ: Prentice Hall, 176-199.