Main Powerpoint Slide of WL

8/12/2019 Main Powerpoint Slide of WL

1/37


2/37

GROUP E

NAME

EHSAN KARIM

SHUBHAGATASARKER

MD. OMARMUSTAFIZ

I D

101 0347 030

101 0527 030

091 0487 630


3/37


4/37

ORIGIN OF THE COMPANY

William Warner & Co. was acquired in 1908 by Henry and Gus tavus Pfeiffer.

WLs origins can be traced to 1856 when William Warner opened a drugstore inPhiladelphia.

For the next 30 years the company made many acquisitions and by 1939, had 21

marketing affiliates outside the United States and several internationalmanufacturing plants.

The largest acquisition was Richard Hudnut Company,a cosmetics business, whichwas eventually sold in 1979.


5/37


6/37

In 1990, WL hadthree core businesssegments: ethicalpharmaceut icals,

nonprescr ipt ion

heal th care products

commonly referred

to as over-the-

coun ter (OTC), and

confect ionery

products .

WARNER-LAMBERT BUSINESS SEGMENT


7/37

THE ETHICAL PHARMACEUTICAL INDUSTRY

The ethical pharmaceutical industry involved the production and marketing of medicinesthat could be obtained only by prescription from a medical practitioner.

Seven markets (United States, Japan, Canada, Germany, United Kingdom, France, andItaly) accounted for about 75 percent of the world market, with the largest single market,the United States, accounting for about 30 percent of the total.

Between 1986 and 1989, the industry ranked first in the United States on both ROS andROI.

The company had a rapid growth during the year of 1987.

WLs ethical pharmaceutical line was marketed primarily under theParke-Davis name. Thecompany ranked 17th among the worlds leading drug firms by turnover.

WLs largest selling drug was Lopid, a cholesterol-reducing drug.In 1991, projected sales

for Lop id were more than $480 million.


8/37

OTC INDUSTRY-AN OVERVIEW With OTC products, the consumer made the buying decision, although often based on

physician or pharmacist advice. To compete successfully with OTC products,significantinvestments in consumer marketing and distribution were required. i.e. Glaxo.

There were two broad classes of OTC health care products: 1) drugs that were formerlyprescription drugs and 2) health care products developed for the nonprescription market,such as toothpaste, mouthwash, and skin care products.

In the developing nations, shortages of more expensive prescription products made OTCdrugs very popular.

The OTC products was used differently in different countries; considering the example ofVicks-Sinex, it was sold as a cold remedy in the British supermarkets but in Germany it isonly available at the pharmacies.

WLs OTC sales increased 11 percent in 1990 to $1.5 billion. The largest product lines were

Halls cough tablets with sales of $320 million and Lister ine mouthwash with sales of $280million.


9/37

The confectionery industryconsisted of four main segments:

Chocolate products (53%)

Non-chocolate products

such as chewing gum(23%)

Hard Candy (18%)

Breath Mints (6%)

THE CONFECTIONARY INDUSTRY


10/37

THE CHEWING GUM MARKET

The confectionery industry was highly concentrated on a global basis with thechewing gum segment the most concentrated.

the largest chewing gum company in 1991 was William Wrigley Jr. Co. (Wrigley) with$1.1 billion in annual sales in more than 100 countries by selling stick gums in lowerprices.

Wrigleys three main brands: Spearmint, Doublemint, and Juiceyfruit, were

ubiquitous around the world.

WL had begun seeking niche opportunities in other confectionery segments inrecent years. Sales was very high during 1990 because of the huge sales of Clorets,Chiclets, Trident and Bubblicious chewing gums.


11/37

ORGANIZATIONAL STRUCTURE

WL was organized into four major divisions reporting to the president and COO. Theyare : Parke-Davis Group, American Chicle Group, Consumer Health Products Group,and International Operations. All four groups had their headquarters in Morris Plains,

New Jersey.

Parke-Davis was responsible for U.S. pharmaceutical regulatory affairs.

The American Chicle Group was responsible for the U.S. confectionery business.

The Consumer Health Products Group was responsible for U.S. consumer health careand shaving products.

International Operations was responsible for the manufacture and marketing of WLs

pharmaceutical and consumer products outside the United States.


12/37

GERMAN MARKET

WLs operations in Germany, Austria and Switzerlandwere managed from Gdecke, A.G., WLs German affiliate.WL acquired Gdecke, a pharmaceutical firm founded in1866.

In 1991, Gdecke had about 1,400 employees, with 230working in pharmaceutical R&D.

Gdeckesbusiness was primarily in ethical

pharmaceuticals.


13/37

BRAZILIAN MARKET

American Chicle entered the Brazilian market in the 1940s.

A strong pharmaceutical business based on Parke-Davis products wasalso established in Brazil.

The Brazil affiliate had about 1,300 employees and virtually all were

involved in the confectionery business.

The largest brand in Brazil was Halls, which was marketed as aconfectionery product (a refreshing experience) rather than a coughtablet. The affiliate had a small consumer health care business; Lister inewas one of the products sold.


14/37


15/37

THEME

In 1991, Warner-Lambert Company, a firm involved in three core businesses-ethicalpharmaceuticals, nonprescription health care products, and confectionery-has justcompleted its most successful year ever.

When WL started the business then they hardly had any revenues but themanagement team did overcome with it by setting up 10 manufacturing plant in theUSA and 70 international plants in 43 countries.

Considering the Pharmaceutical industry, significant challenges were faced in thedrug development where the cost and time to develop new drugs had grownsubstantially.

The industry also faced serious problem when the Spiraling health care costs in themajor markets were putting more pressure on the drug companies to loosen down

the prices and there was significant risk associated with pharmaceutical R&D.


16/37

THEME (CONTD.)

Different pricing and taxation structuresin different countries confused the ECmembers in different countries.

The confectionary industry was faced with major challenge producing gums andmints with the threat of new entrants.

There were different conflicts between the country managers as because they getfewer resources for their operations and most of them has to operate diverse

business which might be a risk for the company growth.

There was this less interaction between the country managers and their decisionmaking power was very low but the company did overcome with it by assigninginternational operational staffs that played an advisory role between the HeadQuarters and the country affiliates.


17/37


18/37

MAIN ISSUE

What strategies the management of Warner

Lambert shou ld take to reduce

commun icat ion gap and h ir ing emp loyees

because of the changing con f igu rat ion o f

global markets and for increasing their

operat ing eff ic ienc ies?


19/37


20/37

STRENGTHS

Selling rare types of drugs

WLs largest selling drug was Lopid,a cholesterol reducing drug. In 1991, projectedsales for Lopidwere more than $480 million. Dilant in, an antiepileptic drug, had sales of$145 million and was a worldwide leader in its category.

Increasing the product line of Confectionary business with the demand of

time.

Sales of WL confectionery products increased five percent to $1.1 billion in 1990. Theleading brands were Trident (sales of $225 million and the worlds leading brand ofsugarless gum) and Clorets gums and breath mints ($130 million). Other major brandswere Adams brand Chic lets (candy coated chewing gum), Certs (breath mints), and

Bubbl ic ious(chewing gum).


21/37

STRENGTHS (CONTD.)

Centralized decision making process give the Warner Lambert the

ability to keep the span of control all over the business area in the

similar way.

In house raw materials sourcing is another biggest strength of WLs.

Setting up the qualified person in the right place to maintain the

better quality.


22/37

WEAKNESSES

Difficult for country managers to handle all sides of the local section of thecompany.

The country managers managed a full functional organization (marketing, finance,human resources, etc.) and were responsible for all WL products marketed in theircountry.

Communication gap between employees is another big problem of WLs.

There was very little interaction between the senior U.S. pharmaceutical, OTC, andconfectionery managers and their international counterparts.

Unsatisfactory promotional strategies is creating problem in the path of prosperity ofWLs.

Problematic international structure is also a major weakness of WLs.


23/37

OPPORTUNITIES

More focus in R & D can help to get in the untapped market for WLs.

Over the past five years, the number of scientists had increased 60 percent to2,600 and 1991R&D spending for pharmaceuticals was expected to be close to$350 million,an increase of12 percent over 1990.

Worldwide increasing uses of nonprescription health care products give WLs a scope toincrease their products line.

WLs OTC sales increased 11 percent in 1990 to $1.5 billion. The largest product lines wereHalls cough tablets with sales of $320 million and Listerine mouthwash with sales of $280million.

Opening a Confectionary section in Germany will help WLs to increase their profit share.

Using global strategies for product development will help them to take the fame of the

company in a better position.


24/37

THREATS

Difference in Drug consumption based on national culture is the

major threat for the company.

Highly competitive OTC market is very much price sensitive.

New market entrants are also creating threat for WLs.

Inconsistence mix of market penetration is also a threat for WLs.


25/37


26/37

MANAGEMENT PERSPECTIVE

Strategic move made by Warner Lambert for both price control andmaintain R & D.

Government health care systems paid for a majority of the consumer cost of drugs

and the prices of drugs were fixed in negotiations between the drug companies and

the government.

Choosing local employees for adjusting with the culture in foreigncountries.

Warner Lambert is keeping the employees happy with propercompensation.

WL is investing for new product development.


27/37


28/37

RECOMMENDATIONS

The management group in the human resource department of Warner-Lambert company shouldrecruit better and more qualified employees in their R&D sector.

The management of Warner-Lambert company should stop divesting into more businesses anyfurther.

The management group in the marketing department of Warner-Lambert company shouldfollow a consistent mx of market penetration around the world.

The management group in the human resource department of Warner-Lambert company shouldhire appropriate and qualified country managers.

The management of Warner-Lambert company should follow a decentralized decision makingprocess.

The management of Warner-Lambert company should have more control over their affiliates.

The management of Warner-Lambert company should improve their global integration.


29/37


30/37

IMPLEMENTATIONIMPLEMENTATION01

THE MANAGEMENT GROUP IN THE HUMAN RESOURCE DEPARTMENT OF WARNER-LAMBERTCOMPANY SHOULD RECRUIT BETTER AND MORE QUALIFIED EMPLOYEES IN THEIR R&D SECTOR.

HOW TO IMPLEMENT IT?

This should be implemented by coming up with the most suited recruitment procedure followed bylucrative compensation packages and worthwhile training programs.

WHO TO IMPLEMENT IT?

This should be implemented by the human resource department or the top management of Warner-

Lambert Company.

WHERE TO IMPLEMENT IT?

This should be implemented at all the research centers of Warner-Lambert Company, both in USA andalso in the foreign countries.

WHEN TO IMPLEMENT IT?

This should be implemented whenever a new research center is built by Warner-Lambert Company.


31/37


THE MANAGEMENT OF WARNER-LAMBERT COMPANY SHOULD STOP DIVESTING INTO MOREBUSINESSES ANY FURTHER.


This should be implemented by focusing more on the existing business and overlook the newbusinesses.


This should be implemented by the top management or by the marketing department of Warner-

Lambert Company.


This should be implemented especially at all foreign affiliates as each place has its own uniquefeatures.


This should be implemented whenever Warner-Lambert Company decides to do businessinternationally in foreign lands.


32/37


THE MANAGEMENT GROUP IN THE MARKETING DEPARTMENT OF WARNER-LAMBERTCOMPANY SHOULD FOLLOW A CONSISTENT MX OF MARKET PENETRATION AROUND THEWORLD.


This should be implemented by doing an extensive research of foreign countries aboutpurchasing and consuming their products.


This should be implemented by the top management or by the marketing department of Warner-

Lambert Company.


This should be implemented at each and every foreign country where Warner-Lambert has itsaffiliates.


This should be implemented whenever Warner-Lambert Company plans to do their businessinternationally in foreign countries.


33/37


THE MANAGEMENT GROUP IN THE HUMAN RESOURCE DEPARTMENT OF WARNER-LAMBERTCOMPANY SHOULD HIRE APPROPRIATE AND QUALIFIED COUNTRY MANAGERS.


This should be implemented by coming up with the most suited recruitment procedure followed bylucrative compensation packages and worthwhile training programs.


This should be implemented by the human resource department or the top management of Warner-

Lambert Company.


This should be implemented at each and every foreign country which has affiliates of Warner-LambertCompany.


This should be implemented as soon as possible and whenever they decide to invade a new country fordoing business.


34/37


THE MANAGEMENT OF WARNER-LAMBERT COMPANY SHOULD FOLLOW A DECENTRALIZEDDECISION MAKING PROCESS.


This should be implemented by allowing lower level managers and front line managers to takedecisions by exercising empowerment abilities.


This should be implemented by the top management of Warner-Lambert Company.


This should be implemented at each and every offices, head quarters, research centers andaffiliates of Warner-Lambert Company.


This should be implemented as soon as possible for the betterment of Warner-Lambert Companyitself.

IMPLEMENTATION


35/37


THE MANAGEMENT OF WARNER-LAMBERT COMPANY SHOULD HAVE MORE CONTROL OVERTHEIR AFFILIATES.


This should be implemented by coming up with strict rules and regulations and continuousmonitoring of the affiliates.


This should be implemented by the top management of Warner-Lambert Company.


This should be implemented at each and every affiliates of Warner-Lambert Company, both localand international.


This should be implemented whenever Warner-Lambert Company decides to have a new affiliate,does not matter if the affiliation is done locally or internationally.

IMPLEMENTATION


36/37

IMPLEMENTATIONIMPLEMENDATION 07

THE MANAGEMENT OF WARNER-LAMBERT COMPANY SHOULD IMPROVE THEIR GLOBALINTEGRATION.


This should be implemented by having regular interactions and meetings between the top managementand the country officials, where they can discuss about the present scenario and also decides on thefuture goals and objectives to achieve.


This should be done either by the top management or by the marketing department of Warner-Lambert

Company.


This should be implemented at each and every foreign country where Warner-Lambert Company has itsaffiliates. All the affiliates of one foreign country should be able to gather themselves together forregular communication process.

WHEN TO IMPLEMENT IT?This should be implemented as soon as possible in order to help increase the efficiency of theaffiliates.


37/37

Documents

Main Powerpoint Slide of WL