Eli Lilly and Company Case Analysis

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Eli Lilly and Company Case Analysis The case under analysis, Eli Lilly & Company, will be covering the positives and negatives with regards to the business situation and strategy of Eli Lilly. One of the major pharmaceutical and health care companies in its industry, Lilly focused its efforts on the areas of "drug research, development, and marketed to the following areas: neuroscience, endocrinology, oncology, cardiovascular disease, and women's health." Having made a strong comeback in the 1990's due to its remarkably successful antidepressant Prozac, was now facing a potential loss in profits with its patent soon to expire. The problem was not only the soon to expire patent on Prozac, but the fact that Prozac accounted for as much as 30% of total revenue was the reality Eli Lilly now faced. (Pearce & Robinson, 34-1) Summary of Key Strategic Issues In choosing to narrow its focus on its core pharma business in the 1990s, Lilly appears to have either deliberately or inadvertently made a choice to funnel their efforts into the category of neuroscience with the patented products Prozac and Zyprexa, Lilly's top sellers. Its imbalanced portfolio and lagging international sales was the consequence of its dependence on just a few key products. This type of a strategy with a focus on neuroscience was not well suited to the more cost conscious international regions whose focus was treatment of disease. Other factors that played against them were the regulations in non-US developed countries on pricing and payment programs for pharmaceutical drugs through national health insurance programs. Due to this fact, Lilly wouldn't have earned as high of a profit margin on its blockbuster drugs, Prozac and Zyprexa, in Europe and Japan as ... ... middle of paper ... ...exa products, the company faces numerous market challenges related to changing demographics, intensifying competition, industry consolidation, regulatory pressures and healthcare industry cost constraints. It is recommended that Lilly diversify its product portfolio, cautiously begin acquiring small firms, and work to change its organizational culture to encourage flexibility and organization-wide learning. References Gadiesh, Orit & Buchanan, Robin "The Leadership Testing Ground: Mergers May be the Truest Test of Great Leaders," Journal of Business Strategy, 23(2), pp. 12-17. Greenberg, Jerald Managing Behavior in Organizations (Upper Saddle River, NJ: Prentice Hall, 1996), pp. 132-133. Pearce II, John A., & Robinson, Jr., Richard B. (2005). Strategic Management: Formulation, Implementation & Control (9th ed.). The McGraw-Hill Companies, Inc., New York.
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