Case 4 Ludbeck V1

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Doing Business Globally
Case team write-up
Team: Alex Earl, Felipe Fonseca, Ishan Desai
Date: 27/01/2015

Lundbeck Korea (case question 4)
Should Andersen separate Lundbeck Korea from Lundbeck Asia? Why or why not?

Analyzing the Lundbeck case and considering the theoretical readings provided, one can conclude that Andersen should not separate Lundbeck Korea from Lundbeck Asia. Although the Korean pharmaceutical market has its own culture and aggressively grows, Lundbeck Korea is still a very small percentage of Lundbeck’s corporation revenues. The Asian division can also provide better support to the South Korean unit than the company headquarters if the organizational process and communication between them become better structured.
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According to the case, they have successfully adapted to the local market. This capability should be leveraged and potentially also used for other company projects, such as Japan. Anderson should keep the South Korean subsidiary responding to the Asian VP, but review the regional strategy and communication process. A subsidiary cannot completely escape company rules as the company definitely needs to be consistent worldwide, but local adaptation is also necessary. Consequently, the Asian VP and the Korean CEO will need to find a middle ground that contemplates Lundbeck’s strategic drivers and the successful Korean case.

Objective: Achieve full potential of Korean subsidiary if part of ludbeck Asia
Impacts on regional and worldwide organizational reporting norms

Exceeded plans
Strong growth of local market and unit

Limited size compared to company (50 employees, $22M in sales) and time (3 years)
Not profitable yet

Global Scenario:
Intense competition of both rival brands and generic competitors
Patent exclusivity is important. In South Korea when launched 
Sales success dependent on successful drug introduction and blockbuster drugs
Type of buyer affects market size and price
Anti-depressants represents 20% of CNS drugs and was $19B in 2005, but 1.5% growth.
Ad drugs new, $4B, growth of 15%+ in 2006.
Memantine is key for moderate and severe AD,
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