Running head: Merck & Co. In the News Week 5 In the News
David Livorsi
June 1, 2017
DeVry University
Professor Edward Pinero Merck & Co. In the News Strategic Marketing- Merck
Merck Pharmaceutical, a global healthcare company with 125-year of pharmaceutical
experience, from the discovery of vitamin B1, to the first measles vaccine, to cold remedies and
antacids, to the first statins to treat high cholesterol, Merck has committed to working to creating
a difference. Merck’s business model has been consistent in improving the overall restaurant
experiences to promote performance. The strategic alignment focuses on innovative and topquality high-tech products in the Healthcare, Life Science and Performance Materials business
sectors. The company’s goal is sustainable and profitable growth.
An Article FierceBiotech: Carroll, J. (2010). States “Merck - The world's biggest R&D
spenders”. Retrieved from http://www.fiercebiotech.com/special-report/merck-world-s-biggest-rd-spenders. According to Peter Kim, president of Merck Research Laboratories, recently told the
Korea Economic Daily that the company might actually boost R&D spending this year, pushing
as high as $8.5 billion in a record effort to get new products out into the marketplace. In 2009,
Merck recorded $5.6 billion in R&D costs in 2009.
The news article posted in The Wall Street Journal: (Loftus & Rockoff, 2013) Merck &
Co. is working on a plan to radically reshape its once-storied research-and-development unit that
would create international innovation hubs tapping into drug research outside of its labs.
(Silverman, 2016) The strategic move will affect the company by closing one facility,
eliminating about 360 jobs from three sites, and transferring other employees to a pair of new
facilities that are slated to open on opposite sides of the country. (Loftus, 2016 The Wall Street
Journal)
2 Merck & Co. In the News A spokeswoman for the drug maker, which is headquartered in New Jersey, confirmed
that the planned changes affect drug discovery, preclinical, and early development work. The
Merck spokeswoman explained that the changes, reflect a need to focus more resources on
tapping products being developed elsewhere. (Loftus, 2016).
The Industry Life Cycle
Merck’s strategic plan to reorganize its R&D units to tap into new products being
develops help the products along the industry life cycle stages. To help the product to
development long-term, Merck had to consider the importance of the industry life cycle to
determine the business-level strategy and its relative emphasis on functional area strategies and
value-creating activities. The industry life cycle refers to the stages of introduction, growth,
maturity, and decline that occur over the life of an industry. According to Merck.com The
Industry Life Cycle is as follows: Introduction Stage: Research
o Data internal and external, structured and unstructed
Growth & Maturity: Development & Commerical
o Models and Stimulations (data)
Medical
o Workflows (Best practice) The industry Life Cycle is important in helping understand the company’s operation and
application of the various strategic measures. First, the turnaround strategies are useful in
improving the performance of the company. The turnaround strategies involve the reversing of
performance decline towards the overall profitability of the firms. (Dess, 2012) R&D setbacks
have made it harder for Merck to weather patent expirations for top-selling drugs such as the
allergy and asthma medication Singular. With the performance decline Merck, would lose
3 Merck & Co. In the News competitive advantage, the reshaping of Merck R&D unit has prompted the company to rethink
its inward-looking approach to drug R&D. (Loftus & Rockoff, 2013)
In April, Merck brought in a new R&D chief, Roger Perlmutter, who has cut and
reorganized personnel and narrowed the scope of projects while shifting resources to more
promising opportunities such as an experimental cancer drug tied to the immune system.
The external analysis Merck’s R&D main findings was the for market segments or customer
groups. As well as extremely high R&D costs, the uncertainty of new drug, and patent
expirations and disputes with competitors. On the other hand, the internal analysis focuses on
reducing the costs and increasing the efficiency in the company. The Merck spokeswoman said
the company is making the changes to allow it to have “earlier access to emerging external
science and technology to augment our leading discovery and development capabilities.” (Loftus,
2016)
In conclusion, Merck’s reorganization approach should improve its growth and
development potentials. By focusing on the Industry Life Cycle Stages and the turnaround
strategies involve in the reversing of performance decline should help Merck reshape better than
expected. References
4 Merck & Co. In the News Dess, G. G. (2012). Strategic management: Text and cases. New York: McGraw-Hill/Irwin.
Carroll, J. (n.d.). Merck - The world's biggest R&D spenders. Retrieved February 1, 2017, from
http://www.fiercebiotech.com/special-report/merck-world-s-biggest-r-d-spenders
Loftus, P. Rockoff, J. (2013, December 27). Merck Cutting Drug Research Jobs at Three EastCoast Sites. Retrieved February 3, 2017, from
http://www.wsj.com/articles/SB10001424052702304753504579284651836908502?
mg=id-wsj
Loftus, P. (2016, July 12). Merck Cutting Drug Research Jobs at Three East-Coast Sites.
Retrieved February 1, 2017, from http://www.wsj.com/articles/merck-co-cutting-drugresearch-jobs-at-3-east-coast-sites-in-latest-shake-up-1468348275
Merck & Co. Inc's. (n.d.). Retrieved February 3, 2017, from
http://csimarket.com/stocks/compet_glance.php?code=MRK.
Silverman, E. (2016, July 30). Merck to cut 360 R&D jobs, close one facility, and expand
elsewhere. Retrieved February 3, 2017, from
https://www.statnews.com/pharmalot/2016/07/12/merck-jobs-layoffs/ 5

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