To What Extent Does a Mature and Cyclical Product Market Drive Corporate Restructuring? Use an Example to Discuss Whether Restructuring Transforms Market and Financial Performance.

of the acquiring corporation . . . , and the acquiring corporation must be in control of the other corporation immediately after the

While it was foreseen that the company would initially take financial setbacks because of the reorganization, it was not believed that the financial risks would be drastic. However, the impending report that Mr. Elesser has to present to the board will detail a net income that will be nearly 26 million dollars in the red for 2004 (see exhibit 2)3. The blunt force restructuring met resistance on numerous fronts. First of all, the various components of the company did not operate under the same uniformed leadership objectives. Each division was set up to look out for their own interests and markets. When the restructuring plan that focused on a more centralized management process, many of the things that worked for one division did not necessarily work for other divisions of the company. This left some divisions at a severe disadvantage. Another obstacle that worked against the restructuring was the employee unions in which the company had to deal. The unions were not on board with the various downsizing and restructuring methods. In addition, the company had to deal with a couple of different unions which posed a problem with negotiating tactics. Benefit costs were also a significant investment that did not hold up well under the auspice of restructuring.

At the time of this case study, 2002, Timken was involved in company-wide restructuring. They were consolidating current operational segments into global business units to reduce expenses. Their goal was more penetration in global markets due to reduced growth in the US based on the bearing industry’s cyclical nature. Analysts predicted 2-3% industry growth in the US, but 6.5% global growth through 2005. The slow US growth was directly tied to the automotive industry’s cyclical nature, which was declining in 2002. Global penetration would help to achieve economies of scale, whilst hedging the

The firm was facing the problem of differentiating itself from the competitors who were already adapting to the market and making more sales and profits in the overall industry. This made the firm to change its strategies in order to be able to adapt to the already changing market in the traditional departmental store business.

ii) What changes or restructuring is occurring and why? Refer to the situational analysis that you completed – is the company hiring or laying off?

During the late 1950s and early 1960s, several large corporations began acquiring other companies to diversify their operations. Diversification allowed them to offset their losses in a failing industry with profits from other unrelated, successful industries. Such phenomena caused

This paper will focus on the processes a pharmaceutical must take to bring a new medication to the market. It will answer the questions as to why companies should have patents on their medications and how a pharmaceutical company can recover the costs connected with failed drugs. It will look at one company that was both effective and unsuccessful in its endeavor to bring a new drug to market and explain what lead to their prosperity/disappointment.

The case study is Macy’s Department Store Repositioning. The key problem is that the traditional department stores sales and profits are declining. There are specialty stores, discount stores, and online stores that offer similar products at a fraction of the cost for the most part. However, in the declining market for the department store industry, Macy’s consolidated stores, established a national department store and continues to make a steady profit. It is usually the time to divest, sale,

Within the United States, pharmaceutical companies are protected from competition and have much power in negotiation, unlike countries with national health insurance systems who utilize delegated bodies to negotiate drug costs or reject product coverage due to disproportionately high costs (Kesselheim et al., 2016). There are two types of market protection for pharmaceutical companies: government-granted monopoly rights to their new small-molecule drug products. Pharmaceutical companies have a guaranteed period of five to seven years before the generic form can be sold, and the U.S. Patent and Trademark Office intellectual property right for patent-related exclusivity that can last up to 20 years or more (Kesselheim et al., 2016).

Large pharmaceutical companies spend millions of dollars and many years developing new and innovative medications. To protect their investment of time and money, they apply and are granted patents from the government, which gives the scientist and pharmaceutical companies a protected period of time that they can be assured that others will be prevented from selling their invention (Williams & Torrens, 2008). This protected period of time gives these companies a period of time that they can sell their new product at

Gilead Sciences is a biopharmaceutical company that develops treatments for life threatening diseases. The company’s main competitive advantage is the robust portfolio of intellectual property supporting the therapies it has developed. The competitive advantage created by its current patents create a virtuous cycle in which Gilead can re-invest earnings into futureinto future drug development, making Gilead a buy opportunity.

GSK is the 2nd largest pharmaceutical firm in the world, and the largest in the UK by sales and profits, it is responsible for 7% of the worlds pharmaceutical market, and has its stocks listed both in UK and US (O 'Rourke, 2002). The origin of the so called blockbuster model, is partly linked with Glaxo (as it was previously known). In the early 80’s, then Glaxo brought to light their first blockbuster drug, Zantac, which was an anti-ulcer drug, which was very similar to the a pre existing drug Tagamet (first ever blockbuster) sold by Smith Kline & French, their completion at the time (MONTALBAN and SAKINÇ, 2011). The introduction of this drug, brought about an increasing sales force in the US, the company soon became dependent on the drug, because it represented a large part of their profit. In 2002, 8 blockbusters of GSK contributed to $14.240 million sales revenue, taking up 53% of its total ethical sales (Froud et al 2006). However, due to the nature of the pharmaceutical industry, the patent began to expire, in other to avoid the patent cliff, Glaxo merged with Wellcome in 1995, which ensured a growing number of sales force, and with Beecham in 2000 (Froud et al., 2006) this merger, boosted the confidence of investors, by growing the business inorganically. For Big Pharma, this block buster model is very profitable, because with the high cost of R&D, the drugs are able to generate ample profit, to cover the sunk costs

In the cases analyzed, we might infer that during a period of economic difficulties companies had gone through deep discontinuity. As such, this determined the need for a turnaround to realign the companies’ strategies with the external and internal environment. These changes impacted the four companies analyzed previously.

The concept of product patent for pharmaceutical products is likely to make life saving medicine beyond the reach of the poor and deprived section of the society around the world.

This is an unusual type of corporate relationship. The first set of questions will reinforce your understanding of the relationship and provide evidence on the pros and cons of consolidation.