6
Humanitarian Argument
- UNAIDS estimated that in 1999 there were 34.3 million people worldwide living with HIV/AIDS, including 5.4 million newly infected that year.
- Of those infected, over 70% lived in Sub Saharan Africa.
- Complicated regimen
- Close medical supervision by HIV/AIDS specialists
- Severe side effects
- Did not work in all people
- Did not work indefinitely
Cost: $8,000 - 15,000 per year
Crixivan Cost: $4,500 per year ($12 per day)
Our Mission
The mission of Merck is to provide society with superior products and services – innovations and solutions that improve the quality of life and satisfy customer needs – to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.
Our Values
1. Our business is preserving and improving human life. All of our actions must be measured by our success in achieving this goal. We value above all our ability to serve everyone who can benefit from the appropriate use of our products and services, thereby providing lasting consumer satisfaction.
2. We are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. Our interactions with all segments of society must reflect the high standards we profess.
“Medicine is for the people, it is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”
"We cannot rest until the way has been found, with our help, to bring our finest achievements to everyone”
- George W. Merck
Merck needs to implement a new strategy which allows the company to maintain the mission statement, but also allows the company to gain profits.
Our Suggestion for Merck:
- Continue global strategy
- Emphasize comprehensiveness
- Modify to a more mechanistic structure
To do this successfully, all elements of Merck'will need to adapt.
Our Team's Strategic Recommendation
1
Conclusion
Overcoming Roadblocks
- Cooperation of outside organizations
- Funding
- Infrastructural differences in foreign countries
- Balancing profit and aid intentions
Two Clashing Strategies
- Donation vs. sell
- Humanitarian vs. profit
- Both have their respective advantages and disadvantages for Merck
A Comprehensive Program
- The donation of money or drugs only goes so far, we hope to improve the impact held by both through comprehensiveness
- Focus on the combination and synergy of outside efforts
- In the short term our efforts will be purely donated, yet in the long term, we hope to achieve profits
Merck
Conclusion
- Overcoming roadblocks
- As worldwide health problems spread and adapt, so must the effort to control them
Our Strategic Recommendation
Process
- We are a business, effieciency is a core competency, and we want to take advantage of this
- Widespread donation as with Mectizan is not feasible
- Will donate drug in first application to demonstrate program's abilities
- Combine both profit driven and humanitarian strategies
- Duty to shareholders, and duty to people
- Pharmacuetical companies have a unique opportunity to meet both demands
Created by: Executive Internal Strategy Team
Strategy
- global strategy
Profit-Driven argument
-We are a for-profit company
-We are not doing what is best for growth in our
shareholder's money
Structure
- more mechanistic
Skills
- core competencies
-Already spending money on one free drug for people, Where does it stop
-Affects our financial records negatively
Shared Values
- focus on both
ethics and profits
Key Ratios Affected
Earnings Per Share = Profit After Tax / Total number of equity shares issued
Style
- senior managements focus
Systems
- information systems
- communication systems
- HR system
Operating Cash Flow Ratio = Cash Flow from
Operations / Current Liabilities
Merck
Staff
- increase # of employees
- increase # of divisons
- demographics change
- Private-sector company
- George W. Merck: “Medicine is for the people, it is not for the profits.”
- Mission
Mectizan
- Discovery of treatment
- Face dilemma with potential expenses
- Treatment success
- Donation
Vision
1) Preserve and improve human life
2) High standards of eithics and integrity
Corporate Mission and Values Statement
Background
3) Scientific excellence for needs of consumers
4) Maintain financial position that invites investment
5) Competitively meet society's and customers' needs.
Past Strategy
Research of HIV/AIDS virus
- Origin of HIV virus
- Research Driven Company
- General Framework Tool
- Corporate Level Strategies
Research Driven Company
- 34.3 million people infected in 1999
Performance
Statistics gathered from 1999-2001
- Major Pharmaceutical company
- Apply what we know from the past
- R&D is huge part of the business
- Many complex diseases
- Can't become complacent since the environment is constantly changing
- 62,000 employees
- $40 billion in sales
- 12% contribution to R&D
The Silver Rule
“Do no harm.”
“If harm is avoidable, avoid it; if harm is unavoidable, minimize it.”
- Fr Robert Spitzer
Merck
The Golden Rule
“Do good”
“Optimize the good.”
“Do unto others as you would have others do unto you.”
- Fr Robert Spitzer
General Framework Tool
Merck's Objective: providing HIV/AIDS therapy to infected individuals
River Blindness
Strategy: establish a way to be profitable while providing the HIV/AIDS therapy to those infected.
- Parasite in Africa, Latin America and Yemen
Corporate Level Strategies
- Black fly transmission
- Microscopic worm capable of producing millions of offspring
- Symptoms of River Blindness