To understand many kinds of risks or the opportunities that are present in the external environment can be helpful in finding out the trends for the betterment of the company operation and reach to the goals or objectives for the future scopes.
The following research of the project is based on the company Merck & Co., Inc. which is an American pharmaceutical company famous for their services and their production and the services for the population all over the world. The following portion of the project will include the overview of the company. In that portion will be comprising the management process of the company, the main purpose for the foundation as well as the revenue of the company, the following project will be conducted to understand the evaluation of the company’s external environment which shall be helpful in finding out the potential risks and the opportunities present in the global platform of the pharmaceutical industry.155
Merck &Co., Inc. is one of the most renowned pharmaceutical companies in the United States. For over 130 years the company has been running their business in the pharmaceutical industry by investing in life saving medicines and vaccines (Merck.com. 2022). During the time of crisis with the most challenges of life taking diseases, the company devotes themselves in saving lives and making improvements in the better living process. The company is successfully demonstrating the procedures and also making a proper commitment to the entire population as well as the patients related to good health. It is also contributing their best in increasing the access to the healthcare sector by following the policies and procedures of the same. In recent times, during the crisis of Ebola or HIV they served millions of people with the help of their effective medicines and vaccines.
In the year 1891, George Merck established the company at the age of 23 with the intention of distribution of chemicals in the neighborhood areas. As time passed, they came up with various kinds of medicines for the population and the animals as well (Merck.com. 2022). Starting with the cure for diabetes to cure for poultry diseases, they served millions of people across the world with their vaccines and medicines with the aim of saving lives.
Headquarter of the company is established in the United states with their entire process and the production and supply chain operation as well. All the employees from the different layers of the management such as: supply chain dept., production dept or the marketing and sales, there are over 53k employees currently working for the company and its production by following the main goals and objectives of the company. As for the revenue of the company, according to the recent study of the stock exchange of the year 2021, the company has earned over $47.4 billion to $47.9 million which shows the huge profit in the year 202. The sales growth of the company was expected to meet the percentage of 14% which also has been achieved by the company itself (Finance.yahoo.com. 2022). So it can be easily observed that the company has been able to earn profitability by serving millions of lives from all over the world. In the year 2021 the company was successful in achieving the increase in the sale by 2% in the sales which almost increased the revenue by 30% as well.
Revenue and Employees Count
In the entire pharmaceutical industry of the United States, the company Merck & co., Inc. is a very strong company in the industry. The senior management has a lot of potential in operating the entire process of the company (Merck.com. 2022). They provide proper training and development for the employees in order to avoid the risks and also produce the quality in order to serve the population.
The company Merck & co., Ltd. operates their process as a healthcare company which falls under the healthcare industry. They have segmented their operations into sections like pharmaceutical section and animal health care. This multinational company is known for serving the entire population with the medicines, vaccines, health products for the animals as well as therapies related to biology.
For the external analysis of the company environment, the tool PESTEL is one of the most efficient ones which can be helpful for the determination of the threats and the opportunities present in the industry (Perera, 2017)). By the help of the PESTEL analysis, the factors such as political, economic, social, technological, environmental and legal can be evaluated for the betterment in the understanding of risks and opportunities.
The political factors play a huge role as one of the most important external factors for the company. For the drug manufacturers it is important to abide by all the rules and legislations related to the healthcare industry. These political factors are helpful in determining the profitability for the long term basis (Merck.com. 2022). Also the employee laws, wages legislations help in the employee management in order to keep the proper pace of the operation. Apart from those, the antitrust laws, bureaucracy and interference of the political issues in the drug manufacturing have the major influence for the production and the sales of the company.
Being a multinational company, the primary aim of the company is to make maximum profit from the international market as well as from the domestic market. The economic factors like unemployment rate, inflation rate or the interest rate are the major influence on the profitability of the company from the economic aspect. The economic factors of the industry help in achieving the competitive advantages in the global marketplace. Also being a multinational manufacturer, the exchange state and the currency stability of the host country are taken into consideration for the profit in the global market. The infrastructure and its quality is also dependable on this.
For any kind of company, the social factors are the primary factors which help in segregating the target market. Based on demography, class, culture or education level, segregation can be made. It is necessary to understand that the society and the population also make a deep impact on the organizational culture which ultimately helps in the production of the company (Borscheva et al. 2020). For the drug manufacturer, the condition of the society, the attitude and the concern helps in developing a strong target base where they can be able to make maximum sales of the life saving drugs to make the population steady and earn a maximum number of revenue as well.
Senior Management and Operations
In recent times, the rapid changes in technology can be beneficial for any kind of company to ensure the proper utilization of the same and gain a huge competitive advantage from the global marketplace (Merck.com. 2022). For the drug manufacturers, the recent changes in the technology and the automation can be helpful in increasing the pace of the production. However, this adaptation of the technology can be a threat for the company Merck & co., Ltd. if the competitors are making huge developments by using the technology.
For the drug manufacturers or overall healthcare industry, it is necessary to ensure that the laws and legislations have been followed for the betterment in the manufacturing. It can be observed that air and water pollution levels are high in the healthcare industry which might cause a threat to the company in future. By the help of strategic planning the companies should perform the process of decreasing the rate of pollution of air, land or water. The waste management also should be taken care of, by maintaining all kinds of rules and legislations proposed by the government.
Legal factors are somewhat similar to the political factors that have been previously discussed. These legal factors are highly influenced by the political factors of a specific country or a region where the company has their business or manufacturing station (Merck.com. 2022). It is important for the company Merck & co., Ltd. to ensure the proper application of the legislation and laws before entering a new region for the expansion. In this way, the competitive advantages can easily be gained from the global market. Laws like employment or health can be helpful in using the resources for the organization and its production in the healthcare industry.
Among all the other external factors that are present in the external environment of the company, technology plays a vital role in the production of the company. It can be observed that rapid changes in the technology are actually helping the healthcare sector in the process and the operation. The pharmaceutical companies like Merck & Co., Ltd, are getting huge support with the presence of the manufacturer for the medicines and vaccines or the other healthcare support. The introduction of automation and robotics has made it easier for the companies to make the maximum production from the production house (Arden et al., 2021). Also latest technologies are helpful in the supply chain management as well which is beneficial in the maximum sales of the company.
By the help of the technology, the drug manufacturer gains a huge profit as well as opportunities from the marketplace. This adaptation can be helpful with the factors such as mitigating the risks related to healthcare.
The main vision and mission of the company is to make improvements in their operation as well as devote their work for better innovation and excellence with the help of science. By the help of this vision and mission statement, the company has made their strategies for the better innovation and application of modern science (Merck.com. 2022). Based on this strategy, the company has the target to provide millions of patients with the medicine and cure. Also they will be able to get a hold on the shareholder. Through strategic planning, they are aware to ensure the use of new technology in the process for better manufacturing with the least error.
Conclusion
After the entire discussion of the pharmaceutical company Merck & co it can be concluded that the company has been able to hold their position for over 130 years because of their services and their production in the healthcare industry. By saving over billions of people, they have been able to earn the trust from the population which helped them in the expansion as well. To understand the external environment of the company, the strategic analysis tool has been used which clearly shows how political or legal factors can be a threat to the company if it is not properly practiced. However the constant demand from the marketplace and the technological implementation in the operation can really be an opportunity for the company to gain more trust and achieve the vision and objectives of the company by the help of strategic planning.
References
Merck.com. 2022. Merck | Home. [online] Available at: <https://www.merck.com/> [Accessed 28 January 2022].
Merck & Co., Inc. (MRK). Finance.yahoo.com. (2022). Retrieved 28 January 2022, from
https://finance.yahoo.com/quote/MRK/.
Policies & positions – Merck.com. Merck.com. (2022). Retrieved 28 January 2022, from
https://www.merck.com/company-overview/policies-and-positions/.
Report on Risks and Opportunities | Merck Annual Report 2019. Merckgroup.com. (2022). Retrieved 28 January 2022, from
https://www.merckgroup.com/en/annualreport/2019/combined-management-report/report-on-risks-and-opportunities.html.
Perera, R. (2017). The PESTLE analysis. Nerdynaut.
Borscheva, N. L., Fedorova, Y. V., Glukhova, M. I., & Islamova, G. I. (2020). Impact of innovative activity of organizations on the development of pharmaceutical industry: a case study. Entrepreneurship and Sustainability Issues, 7(4), 3001.
Arden, N. S., Fisher, A. C., Tyner, K., Lawrence, X. Y., Lee, S. L., & Kopcha, M. (2021). Industry 4.0 for pharmaceutical manufacturing: Preparing for the smart factories of the future. International Journal of Pharmaceutics, 602, 120554.
Merck Executing on Strategy to Position Company for Long-Term Sustainable Growth – Merck.com. Merck.com. (2022). Retrieved 28 January 2022, from https://www.merck.com/news/merck-executing-on-strategy-to-position-company-for-long-term-sustainable-growth/.
Mission, Strategy & Values – Company | Merck Global. Merckgroup.com. (2022). Retrieved 28 January 2022, from https://www.merckgroup.com/kr-en/company/who-we-are/mission-strategy-and-values.html.
Culture & values – Merck.com. Merck.com. (2022). Retrieved 28 January 2022, from https://www.merck.com/company-overview/culture-and-values/.
History – Merck.com. Merck.com. (2022). Retrieved 28 January 2022, from https://www.merck.com/company-overview/history/.
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