Chapter 5 Creating Business Strategies

     In this chapter the book talks about strategic positioning.  Strategic positioning is how a company should reduce the effects of rivalry and thus will improve profitability. As I have mentioned in my previous blog posts the rivals of Merck are Pfizer, GlaxoSmithkline, and Novartis.  As you can see in this chart from Yahoo, Chart, many of the competitors are close in revenue and employees.  So, how does a company like Merck separate itself and increase profits. 

     The way that Merck is able to separate itself is developing a new drug that sweeps the market.  It is not rocket science in the pharmaceutical industry; each company is developing new drugs for allergies, cancer detection, common cold, joint pain, depression, etc..  Of course there is going to be overlap in this industry, but you have to remember once a company in the process of developing a drug, they request a patent on the product and no one else can make it for 20 years.  Merck's Singulair, which is an allergy drug was one of their top money makers and the patent just recently expired.  Now, they are developing a drug called, lambrolizumab.  This drug will help cancer cells be detected by the body's immune system, that are sometimes avoided. As you can see, if this drug gets far enough into clinical studies and is patented Merck could have its next winner in terms of profits and avoid the effects of its rivals. 

Source

Lambrolizumab