...and production, has lain at the core of the firm’s international successes. In this regard, it notes that Toyota learned from early failures, pertaining to export vehicles, and adjusted its strategy in longitude so as to make the most of export opportunities across the international economy. Noting that the pooling of research & development (R&D) resources which exists in Japan is highly relevant to success in this regard, the essay proposes that Toyota’s all-encompassing strategy of localism is responsible for its international success. Concluding, the essay does note that two areas of weakness, pertaining to quality control and emergent market penetration, still plague Toyota’s internationalization ventures. Thus, while the firm is highly successful in this regard, potent internal difficulties problematize its continued success. Toyota’s First Attempts at Internationalization To begin, understanding Toyota’s significant contemporary global posture requires an understanding of the firm’s humble roots. Indeed, in the pre-World War II era, Toyota was a very small automobile manufacturing firm with middling success in the country’s domestic market. Indeed, it is only through the American War Department’s industrial training program that Toyota ultimately succeeded, in the early post-war period, as it pertained to gaining significant market share within the country. Upon achieving a high degree of success in this regard, Toyota attempted to consolidate the gains which it...
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...Introduction Drug development from initial discovery of a promising target to the final medication, is characterized by a high degree of scientific, regulatory and economic risk. Colossal amounts of time, effort, and money are invested in the research and development process to bring a new medicine to the market. In fact, it takes an average of 10 to 15 years to bring a drug from discovery to approval, and for every 5,000-10,000 compounds investigated; only one is approved and marketed. Figure 1: Current time-scale of drug approval processes. Studies have estimated that the cost of bringing a single new drug to market is in excess of US $800million., Other health economists estimate that the current cost of drug development is now between US$1.3 billion to $1.7 billion., However, an updated cost per NCE (New chemical entity) has been recently calculated taking annual inflation, toughening regulatory demands and the decline in success rates into account. It has been proposed that the earlier cost estimate of drug development of $802M has risen to the astronomical level of $3.9Bn after adjustment. In addition, it is important to note that this does not represent the entire cost as the expenditure for marketing is omitted from these figures. However, the costs have been questioned as it is claimed it is in the best interests of drug companies to overstate costs since they often lobby governments to loosen price regulations and increase patent protection. The surging...
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...Characteristics page 4 a) Structure b) Costs c) Demand d) Competition- The Rise of the Generics e) Market Failure, Government Intervention and Price 4) Performance page 7 5) Impact of the Global Economic Downturn page 9 6) Summary page 10 7) Conclusion page 11 Bibliography page 12 8) 1. Introduction This paper briefly examines the current state of the pharmaceutical industry, as well as the economic characteristics, performance, and the impact of the global recession. The industry is made up of several enterprises engaging in the research, development, manufacture and marketing of medicines, vaccines, medical devices, and nutritional products for humans and animals. Though, this multi-billion dollar industry includes large ethical drug multi-nationals (often referred to as Big Pharma), mid-sized specialty pharmaceutical companies, manufacturers of generics, small biotechnology and biopharmaceutical firms, and service companies, 1 for the purpose of this paper, the emphasis will be mainly on drug makers. 2. History/Overview of the Industry The pharmaceutical industry of today is a far cry from its humble beginnings in the nineteenth century of physicians mainly prescribing plant extracts to being technology intensive, dominated by a few large companies with significant research and development (R&D) budgets, and significant government oversight. Over the past five years...
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...Examining A Business Failure LDR/531 June 25, 2011 Dr. Catherine Garcia Examining a Business Failure This paper is about the company Kodak that recently filed for the bankruptcy. Kodak, once a very profitable organization is on the verge of another failure, like Enron, Tyco, etc. This paper will cover how the incorrect management decision lead to its failure. It will compare and contrast leadership, management, and organizational structure that contributed to this failure. History of Kodak and timeline George Eastman started Kodak in 1878. In 1888 Eastman presented a first simple camera to the world. He made the complex and complicated process of photography easy and simple enough to use by everyone. "you press the button, we do the rest," Eastman demonstrated his marketing ingenuity (History of Kodak, n.d.) . The success of Kodak continued and in 1895 Kodak introduced the first pocket camera. Later Eastman formed his companies guiding principle: volume production at affordable cost, global presence, creative marketing, satisfied customers with best customer service, and growth through uninterrupted research and development. Furthermore, he stressed on how important it is to value brand name and the quality it stands for. Eastman firmly believed in product quality and never compromised under any circumstances (Kodak, 2006). Introducing color photography, Kodak continued its growth and success by investing in R&D and by 1963 become standard in photography...
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...Explain the factors behind Shimano’s success in the bicycle parts market During the history of the company Shimano overcame its challenges by adjusting its strategy to changes in the market while at the same time establishing its core strength - strong focus on technology to create innovative and quality products - establishing a direct line to customers and iterating on its product based on their demands - transferring technology between different product lines and fields to to increase the return on investment and to produce high value added products Great Depression The technology focus with the aim to produce high quality and thus high value added products was already established in the first crisis Shimano faced, the Great Depression of the 1930s. Despite struggling the company focused on improving its production process. While the aim was to produce high quality freewheels, this should in particular reduce the failure rate, allowing the company to establish its high quality sales strategy. Instead of giving discounts the company offered to replace defective product with two working products. This showed great confidence in its product while in fact the actual cost were limited by the actual failure rate that could be improved below the level of a discount. Assuming a failure rate of 20% the replacement costs were an extra 20% (or assuming that competitors also replace defective parts and have a similar rate just 10%). This strategy worked, because while bicycles...
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...International Series in Quantitative Marketing Min Ding Jehoshua Eliashberg Stefan Stremersch Editors Innovation and Marketing in the Pharmaceutical Industry Emerging Practices, Research, and Policies Chapter 3 Portfolio Management in New Drug Development Min Ding, Songting Dong, Jehoshua Eliashberg, and Arun Gopalakrishnan Abstract The pharmaceutical industry leads all industries in terms of R&D spend. Portfolio management in new drug development is extremely challenging due to long drug development cycles and high probabilities of failure. In 2010, a pharmaceutical company like GlaxoSmithKline (GSK) spent over USD 6 billion in R&D expenditure and managed a total of 147 R&D projects across 13 therapeutic areas in different stages of development. There are a lot of challenges in deciding on how to allocate resources to these projects in order to achieve the maximum returns. For example, how to evaluate the value and risk of each project, how to choose new projects for both short-term cash flow and long-term development, how to decide which projects to prioritize and which projects to remove from the portfolio, how to design drug development unit and incentive schemes to maximize the likelihood of success, and so forth. This chapter reviews both practice and the state-of-the-art research and summarizes the latest insights from both industry and academia. For a manager, it provides a guide to the tools they need in portfolio management in the new drug development...
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...factors on product and business processes innovation. For the analysis of important relations and conclusions, beside theoretical literature, we use the results of several studies. Key Words: product innovations, business processes innovation, industry maturity, customer needs, demand, technological opportunity, investment attractiveness, company size, export orientation INTRODUCTION Innovations are one of the main sources of a competitive advantage and they are essential for a company growth. Fast technology development, combined with the globalisation and fast changes in customer demand, implies that a competitive advantage of a company can be only temporary. Companies put great effort in beating the competition and improvement in the market game by introducing innovations. On the macro level, innovations have a vital influence on economic development of a country. Thus, it is not a surprise that innovations are more and more present in research, business and governmental circles both in developed and developing countries that wish to grow fast and become developed. Innovations differ among themselves. If we simply categorize companies as innovative or non-innovative, we risk to...
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...tools that the Fed can use to manipulate the money supply and interest rates: open market operations, which affect the quantity of reserves and the monetary base; changes in discount lending, which affect the monetary base; and changes in reserve requirements, which affect the money multiplier. Because the Fed’s use of these policy tools has such an important impact on interest rates and economic activity, it is important to understand how the Fed wields them in practice and how relatively useful each tool is. In recent years, the Federal Reserve has increased its focus on the federal funds rate (the interest rate on overnight loans of reserves from one bank to another) as the primary indicator of the stance of monetary policy. Since February 1994, the Fed announces a federal funds rate target at each FOMC meeting, an announcement that is watched closely by market participants because it affects interest rates throughout the economy. Thus, to fully understand how the Fed’s tools are used in the conduct of monetary policy, we must understand not only their effect on the money supply, but their direct effects on the federal funds rate as well. The chapter thus begins with a supply-and-demand analysis of the market for reserves to explain how the Fed’s settings for the three tools of monetary policy determine the federal funds rate. We then go on to look in more detail at each of the three tools—open market operations, discount rate policy, and reserve requirements—to see how they are...
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...Acquisition of a competitor in China * Rank the above four business and the two decisions covered in class (manufacturing capacity for existing product and new product R&D) from least risky to most risky. Answers: 1) Risk assessment for manufacturing capacity for a new product Exogenous Risk * Competitor introduces similar product before you * New product is not well accepted by customers * Similar but more cost effective products available in market. * Endogenous Risk * Lack of experience to manufacture new product * Whether marketing team is capable of selling the new product and make profits * Technical Difficulty in large scale manufacturing of the product 2) R&D project to develop second-generation product Exogenous risk * Cost, Availability & compatibility of suitable raw materials * Other companies doing similar R&D but more cost effective * First generation of the drug is still preferred. Endogenous Risk * Technical failures * Budget to steep for R&D * Ability to market and sell new product * New product vs existing or similar product competition * 3) Expansion of sales and marketing capability to enter Russia. Exogenous Risk * Product acceptability * Similar products and their market share and sales. * Political Stability in Russia * Availability and cost of Raw Material Endogenous Risks: * Ability to employ a good marketing and sales team...
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...a priority for the engineers. At each stage of development, the goal of making the technology the absolute best it can be causes the venture’s costs to spiral up and require unreasonable adoption rates in order to pan out financially. 2. Iridium’s business organization is flawed in that the goal of developing the absolute best technology possible is never adequately weighted against the costs incurred and management seems to fall asleep is carefully monitoring competing technologies or consumer demand and willingness to spend. Ultimately, Iridium’s falls prey to the classic problem of recognizing a market but failing to accurately and completely size and price the market before moving on to the R&D and product development stage. Iridium’s main benefit is its ability to function anywhere on earth – a noble and impressive feat, but one with a clearly limited market, especially given the advances in cell coverage during the years of development prior to Iridium’s release. Factoring...
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...C. M E R L E C R A W F O R D STRATEGIES FOR NEW PRODUCT DEVELOPMENT Guidelines for a critical company problem C. Merle Crawford is a faculty m e m b e r at the University o f Michigan. In spite o f much evidence o f its success, many managers hesitate to establish a policy for new product development. Their indecision often arises f r o m two reasons: they fear that a defined strategy may discourage innovation and they are uncertain how to formulate a new product strategy. The author o f this article discredits the f o r m e r notion and, in reply to the latter, proposes the guidelines f o r developing such a statement. As new products are essential to the continued success o f most firms, the strategy must exist and must be operant i f the firm is to avoid wasted time, effort, and money as well as employee confusion and discouragement. For longer than most of us care to remember, Dan Gerber has been proclaiming that babies are his business, his only business. With some nostalgic regret I read recently that he has altered his strategy: he now permits limited diversification b e y o n d products for babies. A leading toiletries manufacturer has an equally tenacious, though unpublicized, commitment to only those new, nonfood, packaged goods that do not compete itemto-item with Procter and Gamble. Richard Rifenburgh, president of Mohawk Data Sciences, manufacturers of peripheral computer equipment, was cited recently in Fortune as a man who, at the present time, would...
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...Working Paper Series Fall of Lehman Brothers – reasons why the failure could not be stopped Arif Ahmed South Asian Management Technologies Foundation August, 2011 1 Contents Abstract ............................................................................................................................................ 3 Background....................................................................................................................................... 4 Genesis of the Problem .................................................................................................................... 5 The Abettors of Failure..................................................................................................................... 9 Controls that failed ......................................................................................................................... 12 Preventing another Lehman........................................................................................................... 16 Conclusion ...................................................................................................................................... 19 Reference ....................................................................................................................................... 22 2 Abstract Failure of Lehman Brothers marks an important point of modern economic history. In a matter of eight months a successful and...
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...he value is in the mentorship, skills, education and inspiration, and in many cases the value comes from being selected. It’s like a form of validation.” It works both ways, as mentors working with start-ups are given access to the frontline innovators in their industry sectors, knowledge that also helps in their roles. Purpose aims to help digital start-ups with funding, mentoring, access to legal and financial advice, new technologies and premises accelerators are still essential to the growth of entrepreneurial ecosystems not only because they provide a petri dish for innovation, but because they create jobs. In an article on AllThingsD today, Jed Christiansen contends that the fundamental value of seed accelerators lies in their ability to both drive economic growth and foster an entrepreneurial culture within local communities. Why important Startups, small businesses and accelerators are critical pistons in the engine of job creation; there are a few who would argue with that. However, research from the Kauffman Foundation puts into perspective just how important they are. It suggests that, between 1980 and 2005, all net job growth emanated from companies fewer than five-years-old. When it comes to how to best reverse an economic downturn, about the only thing you might find politicians agreeing on is the importance of supporting small businesses. For accelerators, it doesn’t matter whether or not all of their startups raise big rounds of venture capital, it...
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...The Indian pharmaceutical market is highly competitive and remains dominated by low priced, domestically-produced generics. In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low. By 2010 end, the domestic Pharma market in India is expected to be US$ 13.76 billion and this is likely to increase at a compound annual growth rate of 9.5-10 per cent till the year 2015. The success and failure of any project in this industry is largely dominated by R&D spending. R&D spending of the large firms is almost as high as 10 percent of the total earnings. The aim of our study is to find out what effect R&D spending has on the market capitalisation as well as on the share prices of the firms. The regression technique along with the Booz-Allan-Hamilton approach has been used in finding out this relation. The Indian Pharmaceutical Market- A review India has a huge population in excess of one billion people and a growing middle class with access to high quality healthcare. The Indian pharmaceutical market is highly competitive and remains dominated by low priced, domestically-produced generics. In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low. The pharmaceutical sector is currently experiencing double digit growth and this is expected to continue, driven by the vaccines market. Continued growth is also expected in the diagnostic...
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...about: Nucleon a biotechnology company (specialized R&D) One of over 200 firms Case Facts: Need one strong patent on the right molecule and that can ensure survival for years by allowing the company to attract capital Very difficult to patent the process technology used to obtain a biologically important molecule (hard to predict how the courts would rule) May also take several years to process an application and large risks with going ahead with development without the patent Nucleon has a strong patent position for CRP-1 molecule but not so certain about the rights to the other necessary proprietary components i.e. the genetic sequence Nucleon must pick the right projects the first time and cannot gamble with a big portfolio of projects Must also be in the loop about new scientific research which requires them to attract the best in-house scientist and maintain close contact with universities It’s imperative that Nucleon gets its products into the clinic before their competition does. Nucleon’s competition is not direct in that they are working directly on cell regulating proteins, but the projects that they are working on require similar technology and others are developing drugs for the same disease that the cell regulating factors are being developed. All Biotechnology firms started as specialized R&D laboratories Some vertically integrated into production or marketing Nucleon can’t afford to market its own product therefore they will link up with...
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