GROUP E

NAME
EHSAN KARIM

SHUBHAGATA
SARKER

MD. OMAR
MUSTAFIZ
I D
101 0347 030

101 0527 030

091 0487 630
ORIGIN OF THE COMPANY
William Warner & Co. was acquired in 1908 by Henry and Gustavus Pfeiffer.

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

For the next 30 years the company made many acquisitions and by 1939, had 21
marketing affiliates outside the United States and several international
manufacturing plants.

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

ACQUISITIONS & MERGERS
In 1952, the company, now known as Warner-Hudnut, acquired Chilcott Laboratories,
a pharmaceutical company founded in 1874.

In 1955, with sales at $100 million, Warner-Hudnut merged with the Lambert
Company to form the Warner-Lambert Pharmaceutical Company.

In 1962, American Chicle was acquired. The Halls cough tablets brand was acquired
in 1964. In 1970, Schick wet-shave products were acquired.

Also in 1970, WL merged with the pharmaceutical firm Parke, Davis, & Company
(Parke-Davis).

In 1990, WL had
three core business
segments: ethical
pharmaceuticals,
nonprescription
health care products
commonly referred
to as over-the-
counter (OTC), and
confectionery
products.
WARNER-LAMBERT BUSINESS SEGMENT
THE ETHICAL PHARMACEUTICAL INDUSTRY
The ethical pharmaceutical industry involved the production and marketing of medicines
that could be obtained only by prescription from a medical practitioner.

Seven markets (United States, Japan, Canada, Germany, United Kingdom, France, and
Italy) 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 and
ROI.

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

WLs ethical pharmaceutical line was marketed primarily under the Parke-Davis name. The
company 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 Lopid were more than $480 million.

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, significant
investments in consumer marketing and distribution were required. i.e. Glaxo.

There were two broad classes of OTC health care products: 1) drugs that were formerly
prescription 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 OTC
drugs very popular.

The OTC products was used differently in different countries; considering the example of
Vicks-Sinex, it was sold as a cold remedy in the British supermarkets but in Germany it is
only 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 Listerine mouth- wash with sales of $280
million.





The confectionery industry
consisted of four main segments:

Chocolate products (53%)

Non-chocolate products
such as chewing gum (23%)

Hard Candy (18%)

Breath Mints (6%)
THE CONFECTIONARY INDUSTRY


THE CHEWING GUM MARKET
The confectionery industry was highly concentrated on a global basis with the
chewing 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 lower
prices.

Wrigleys three main brands: Spearmint, Doublemint, and Juiceyfruit, were
ubiquitous around the world.

WL had begun seeking niche opportunities in other confectionery segments in
recent years. Sales was very high during 1990 because of the huge sales of Clorets,
Chiclets, Trident and Bubblicious chewing gums.
ORGANIZATIONAL STRUCTURE
WL was organized into four major divisions reporting to the president and COO. They
are : 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 care
and shaving products.

International Operations was responsible for the manufacture and marketing of WLs
pharmaceutical and consumer products outside the United States.


GERMAN MARKET
WLs operations in Germany, Austria and Switzerland
were managed from Gdecke, A.G., WLs German affiliate.
WL acquired Gdecke, a pharmaceutical firm founded in
1866.

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

Gdeckes business was primarily in ethical
pharmaceuticals.
BRAZILIAN MARKET
American Chicle entered the Brazilian market in the 1940s.

A strong pharmaceutical business based on Parke-Davis products was
also 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 a
confectionery product (a refreshing experience) rather than a cough
tablet. The affiliate had a small consumer health care business; Listerine
was one of the products sold.



THEME
In 1991, Warner-Lambert Company, a firm involved in three core businesses-ethical
pharmaceuticals, nonprescription health care products, and confectionery-has just
completed its most successful year ever.

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

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

The industry also faced serious problem when the Spiraling health care costs in the
major markets were putting more pressure on the drug companies to loosen down
the prices and there was significant risk associated with pharmaceutical R&D.
THEME (CONTD.)
Different pricing and taxation structures in different countries confused the EC
members in different countries.

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

There were different conflicts between the country managers as because they get
fewer 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 decision
making power was very low but the company did overcome with it by assigning
international operational staffs that played an advisory role between the Head
Quarters and the country affiliates.
MAIN ISSUE
What strategies the management of Warner
Lambert should take to reduce
communication gap and hiring employees
because of the changing configuration of
global markets and for increasing their
operating efficiencies?

STRENGTHS
Selling rare types of drugs

WLs largest selling drug was Lopid, a cholesterol reducing drug. In 1991, projected
sales for Lopid were more than $480 million. Dilantin, 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. The
leading brands were Trident (sales of $225 million and the worlds leading brand of
sugarless gum) and Clorets gums and breath mints ($130 million). Other major brands
were Adams brand Chiclets (candy coated chewing gum), Certs (breath mints), and
Bubblicious (chewing gum).

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.

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

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

Communication gap between employees is another big problem of WLs.

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

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

Problematic international structure is also a major weakness of WLs.
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 to 2,600 and 1991
R&D spending for pharmaceuticals was expected to be close to $350 million, an increase of
12 percent over 1990.

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

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 Listerine mouthwash with sales of $280
million.

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.






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.

MANAGEMENT PERSPECTIVE
Strategic move made by Warner Lambert for both price control and
maintain 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 foreign
countries.

Warner Lambert is keeping the employees happy with proper
compensation.

WL is investing for new product development.


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

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

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

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

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

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

The management of Warner-Lambert company should improve their global integration.
IMPLEMENTATION
IMPLEMENTATION 01

THE MANAGEMENT GROUP IN THE HUMAN RESOURCE DEPARTMENT OF WARNER-LAMBERT
COMPANY 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 by
lucrative 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 and
also in the foreign countries.

WHEN TO IMPLEMENT IT?
This should be implemented whenever a new research center is built by Warner-Lambert Company.


IMPLEMENTATION
IMPLEMENTATION 02

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

HOW TO IMPLEMENT IT?
This should be implemented by focusing more on the existing business and overlook the new
businesses.

WHO TO IMPLEMENT IT?
This should be implemented by the top management or by the marketing department of Warner-
Lambert Company.

WHERE TO IMPLEMENT IT?
This should be implemented especially at all foreign affiliates as each place has its own unique
features.

WHEN TO IMPLEMENT IT?
This should be implemented whenever Warner-Lambert Company decides to do business
internationally in foreign lands.


IMPLEMENTATION
IMPLEMENTATION 03

THE MANAGEMENT GROUP IN THE MARKETING DEPARTMENT OF WARNER-LAMBERT
COMPANY SHOULD FOLLOW A CONSISTENT MX OF MARKET PENETRATION AROUND THE
WORLD.

HOW TO IMPLEMENT IT?
This should be implemented by doing an extensive research of foreign countries about
purchasing and consuming their products.

WHO TO IMPLEMENT IT?
This should be implemented by the top management or by the marketing department of Warner-
Lambert Company.

WHERE TO IMPLEMENT IT?
This should be implemented at each and every foreign country where Warner-Lambert has its
affiliates.

WHEN TO IMPLEMENT IT?
This should be implemented whenever Warner-Lambert Company plans to do their business
internationally in foreign countries.


IMPLEMENTATION
IMPLEMENTATION 04

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

HOW TO IMPLEMENT IT?
This should be implemented by coming up with the most suited recruitment procedure followed by
lucrative 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 each and every foreign country which has affiliates of Warner-Lambert
Company.

WHEN TO IMPLEMENT IT?
This should be implemented as soon as possible and whenever they decide to invade a new country for
doing business.

IMPLEMENTATION
IMPLEMENTATION 05

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

HOW TO IMPLEMENT IT?
This should be implemented by allowing lower level managers and front line managers to take
decisions by exercising empowerment abilities.

WHO TO IMPLEMENT IT?
This should be implemented by the top management of Warner-Lambert Company.

WHERE TO IMPLEMENT IT?
This should be implemented at each and every offices, head quarters, research centers and
affiliates of Warner-Lambert Company.

WHEN TO IMPLEMENT IT?
This should be implemented as soon as possible for the betterment of Warner-Lambert Company
itself.

IMPLEMENTATION
IMPLEMENTATION 06

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

HOW TO IMPLEMENT IT?
This should be implemented by coming up with strict rules and regulations and continuous
monitoring of the affiliates.

WHO TO IMPLEMENT IT?
This should be implemented by the top management of Warner-Lambert Company.

WHERE TO IMPLEMENT IT?
This should be implemented at each and every affiliates of Warner-Lambert Company, both local
and international.

WHEN TO IMPLEMENT IT?
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
IMPLEMENDATION 07

THE MANAGEMENT OF WARNER-LAMBERT COMPANY SHOULD IMPROVE THEIR GLOBAL
INTEGRATION.

HOW TO IMPLEMENT IT?
This should be implemented by having regular interactions and meetings between the top management
and the country officials, where they can discuss about the present scenario and also decides on the
future goals and objectives to achieve.

WHO TO IMPLEMENT IT?
This should be done either by the top management or by the marketing department of Warner-Lambert
Company.

WHERE TO IMPLEMENT IT?
This should be implemented at each and every foreign country where Warner-Lambert Company has its
affiliates. All the affiliates of one foreign country should be able to gather themselves together for
regular communication process.

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