Merck & Co.

Merck & Co.

Deliverable 1

I.

The two most pressing trends we recognize with Merck are Medical Innovation and Patents. We consider medical innovation to be an opportunity and Patents to be a threat. The reason we see Medical Innovation (R&D) being an opportunity for Merck because they have technologies and businesses across the spectrum of health care. This enables Merck to be global with its business. This company is able to venture into health care needs in under developed and third world countries. We identified patents as a threat because they are suffering from patent expiries now to 2019 i.e. Singulair for asthma. This drug at one point produces $ 5 billion in annual revenue. Merck is doing its best to diversify and expand into diabetes, oncology, and infectious diseases to help boost revenue.

II.

Rivalry of Competing Firms

The Pharmaceutical market is dominated by a handful of firms with various competing drugs. Market share of the competing firms in this industry fluctuate with their patent expiration dates. In 2012 Johnson & Johnson and Novartis saw declines in their sales which repositioned the industry leaders. But two years later the tides have shifted and they are now the industry leader with their annual revenue rising by an average of 4.5%. In 2013 Merck and Pfizer saw the same decline in market share due to loss expiration of vital patents. Merck has recently had a cancer medication approved for sale in the US market which it believes will turn its deficit around. There is a common structure among the most successful competing firms in the pharmaceutical industry; they aren’t reliant on only large “blockbuster pharmaceuticals”. Merck has recently acquired Sigma-Aldrich, an American based lab testing material supplier who is diversifying