Merck Case Study
Introduction of the Company
Merck was established in 1891 to improve human and animal health through the development of innovative products. Merck currently has two reportable segments, the Pharmaceutical Segment and the Vaccines and Infectious Diseases Segment. Merck sells products through several channels including wholesalers, retailers, hospitals, clinics, government and managed health services providers. In the 1980’s the Merck was very successful in producing 10 major new drugs and had a very healthy pipeline. In later years, Merck has entered into joint ventures with many other pharmaceutical companies in order to expand its pipeline. In the last several years Merck has …show more content…
The factors that strongly hurt Merck’s rating are the expensive cost of research and development for the company, which is key to its success. Additionally the expiration of patents on strong revenue producing products makes it critical to replace that revenue in order to continue on pace.
* Demographic: The aging of America can be an opportunity for Merck. As the baby boomer generation is reaching its retirement age, the population is shifting to a greater number of people in their sixties and older. Statistics show that the over 65 age group uses three times more drugs than the younger population. As Merck has had success in arthritis and cholesterol medicines already, there is going to be a greater demand for drugs that make living longer possible as well as more comfortable. * Viruses and Epidemics: As Merck’s sales from vaccines and infections increases, there are opportunities for Merck to capitalize on new epidemics. The recent history of the H1N1 flu virus made the production of a new flu vaccine very profitable for some firms that had the capacity to produce it rapidly. * Advertising – the permitting of DTC (direct-to consumer) advertising is allowing pharmaceutical companies the opportunity to reach out directly to consumers and educate them on the available drugs and they may enhance their lives. Additionally it also discusses the side effects of