When you think of a tangible resource, you think of something you can reach out and touch such as cash, employees, product, and real estate. The two that stick out to me are cash and employees. Merck is had a cash flow of $5.8 billion dollars in 2011 and $2.8 billion in 2012, after paying $1.3 billion in pensions and $960 million in legal settlements. With that kind of cash and Merck in the process of buying back close to $16 billion dollars back in stock, the company has an advantage over the many other pharmaceutical companies. Merck is able to spend more money on research and development, as well as enhancing the current product line.
The next advantage that Merck has is its employees, for any company to succeed you need employees to be willing to innovate, work hard, and enjoy what they do. So, how does Merck and its 86, 000 employees maintain a competitive advantage over its competitors; to me the answer is autonomy. Autonomy, is how much freedom one has at their job and usually with more autonomy employees get a greater sense of responsibility. One way that Merck's accomplishes this is employees in certain fields can get a $500k-$1 million grant to do research without someone blinking an eye. Another way is summer hours. I know that might seem crazy, but for a company to give you shorter hours on a Friday to spend with your family is huge in employees eyes. Merck, also has bonuses at the end of each year and they depends on your ranking in the company and revenue earned that year. Who doesn't love a check for thousands of dollars each year for doing good work? Lastly, to keep Merck's employees staying with Merck is that they offer restricted stock units in which they see earnings after three years.
These are just two of the ways that Merck keeps their employees in-house and maintain a competitive advantage over its competitors.
Sources
Cash Flow
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