Pharmaceutical Industries Have to Operate Term Paper

Pages: 75 (25695 words)  ·  Bibliography Sources: ≈ 69  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business


The data that was evaluated was a combination from book, journal articles, review papers and the Internet. The information reviewed pertained to a wide variety of situations and industries. There were some common trends observed in all the material. The commitment of the management and the involvement of the worker are critical no matter what the condition of the external and internal environment the company faces. Integrating the core function -- marketing and sale of products along with the goals and the objectives of the organization is the new route the organization has to now follow.

A distillation of the interviews will be provided in Chapter 2.


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Understanding the main driving factors for marketing a commodity in the market is very important. The ideals and concepts supporting the growth and prosperity of firms generate considerable interest and debates within the academic and the business community. The impact of social science, economic, strategy, public and government policies all are considered to play a significant role in the success or failure of an organization. In the modern market place, no fixed and definite strategy is identified as being the most effective. What may be appropriate for one company in the same industry may not exactly work for another company. The key components that result in the success or failure of an organization are the organizational goals and objectives. (Morgan, 1997) Without aims (for an organization) there is no logical reason for bringing people, money, and other resources together. The ideal utilization of material resources required; maximizing the performance and the productivity of the organization, while at the same time reducing cost, are the important guidelines. External and internal variables also play a very important role in the success of the organization. Contemporary management theories place great emphasis on these variables, consequently marketing strategies also uses many of these theories to understand and evaluate the market for the product and services of the organization.

TOPIC: Term Paper on Pharmaceutical Industries Have to Operate Assignment


The history of Sanofi-Synthelabo is filled with many mergers and acquisitions over the years. Over the year Sanofi has relied on external mergers and acquisitions for its growth in the market. (O'Sullivan, 2001) Sanofi was established in 1973. Pierre Guillaumat, chairperson of the Societe Nationale des Petroles d'Elf Aquitaine, in France appointed Rene Sautier to develop and create new channels of business for the company. Sautier selected Jean Francois Dehecq to help him with this project. The idea at the start of this new process was developing a commercial business that would be both global in nature and generate profits for the company.

There were different business segments that the two business planners Sautier and Dehecq investigated in the course of their selection many business that they thought might be profitable and innovated. The sector that they finally selected was one of personal care and healthcare. The official name of the company was "Omnium Financier Aquitaine pour L'Hygiene et la Sante" but the name Sanofi for the company was better used. Very soon, the company had portfolios that ranged from healthcare products, cosmetics and animal nutritional products. Sanofi, in a very short time, became very well established in the market and symbolized quality and reliable healthcare to its clients. The company selected for its logo inverted blue and green retorts. Labaz and Yves Rocher became the first two companies that merged into the Sanofi portfolios and their colors, blue and green respectively, became the colors of the new company. The retorts in the logo symbolizes that the main goals and mission of the company which is research and development. The main business strategy of the company was to develop pharmaceuticals and beauty products for the commercial market. The strategy that the company used was to develop a market base for its products and encourage the growth of the company in intensive research and development programs.

The history of the pharmaceutical division of the company can be traced to the initial acquiring of Labaz Group, the pharmaceutical subsidiary of the renowned "Belge de l'Azote" with sales of 370 million francs.

This company already had a global presence and was heavily invested in the research and development of two products: the antiarrhythmic Cordarone (amiodarine) and the anti-epileptic agent Depakine (sodium valproate.) The second division of the company was the beauty and personal care company of Yves Rocher. This company was very famous for its herbal and natural-based beauty products. It was also famous for the marketing plan of using mail order to sell its products in addition to the traditional methods of marketing. In 1979, ELF Aquitane, the nationally owned French petroleum-based organization that initially speared on the creation of Sanofi, spun the unit off as an independent division to manage and regulate its own growth while still under the main umbrella of ELF Aquitane. In 1988, Sanofi acquired the cosmetic portfolio of Nina Ricci; and, in 1993, the perfume portfolio of Yves St. Laurent. In the 1990s, Sanofi divested its animal nutritional products and veterinarian portfolios that it had acquired due to the series of acquisitions of smaller companies. It also began to separate the biotech operations from the research and development units of the pharmaceutical division and the biotech operation were also divested in due time. By the mid 1990s, the beauty and cosmetics divisions of the company were also incurring losses and were not performing as desired. Nina Ricci was the first to be sold in 1996; this was followed by the sale of other product lines and business units of the beauty portfolio.

Towards the latter part of the 1990s, many pharmaceutical companies all over the world were consolidating their portfolios and divesting units that were not a part of the core competencies of the organization. The formation of the European Union and the constant economic growth spurt in the mid-1990 created organizations that had divisions and business units that were not considered core competencies of the companies that they were a part of. Natural growth within an organization involves the investment of resources for extensive planning, development and the implementation a new project. This concept is called internal growth. An acquisition or merger can however, help an organization achieve growth quickly by acquiring trained personnel, systems, technology and expertise. In the 1990s, mergers and acquisitions also introduced deregulation and market-globalization. The shrinking of the procedural (process) life cycles from raw material to final product and to the customer has made competition even more aggressive.

In 1996, Ciba-Geigy and Sandoz merged to create Novartis. Industries in many European countries and the U.S. were deregulated and made independent from government control. ELF Aquitane was deregulated and now called TotalFinaElf. TotalFinaElf realized that it wished to identify itself as an energy-based company with a portfolio of energy generation, scouting and development. Sanofi, as a result, was not considered to be part of the core competencies of the new company. With this in mind, the company decided to divest this unit. L'Oreal was undergoing similar transformations in its business portfolio and chose to identify itself as beauty and pharmaceutical organization. Thus, the merger of the pharmaceutical divisions of Elf Aquitaine -- Sanofi with the L'Oreal division occurred in 1999. The new company formed was called Sanofi-Synthelabo. (Mirasol, 1999) Sanofi-Synthelabo is headquartered in Paris, France. It has also identified four core segments for itself in the pharmaceutical industry for drug research and manufacturing:

Cardiovascular drugs

Central nervous system


Internal medicine formulations

At present, Sanofi-Synthelabo has a portfolio of around 50 compounds in development programs. Around half of these are in phase II or III clinical trials.

At the time of the merger, Sanofi was the second largest drug company in France and Synthelabo was the third. Synthelabo was founded in 1970, from the merger of Laboratoires Dausse and Laboratoires Robert et Carriere. In 1973, L'Oreal bought a 53% interest in the company. In 1980, the company bought the drug firm Metabio-Jouillie. Other acquisitions followed throughout the 1980s. There were also several joint ventures established, including those with Mitsubishi Chemical Industries and Tanabe Seiyaku. In the early 1990s, the company acquired several smaller French companies; and later, in 1997, the Sanorania Pharma division from Pharmacia & Upjohn. This helped Synthelabo become a major player in the drug industry around the world.

The histories of the two companies were fairly similar both in age and in culture. Both companies, at the time of the merger, had strong portfolios with no overlap of product families. Most change is generally accompanied by problems. The adoption of new management methods, their implementation, changing past routines to suit the new methods of management is often a long and tedious process.

The management, during this stage, must practice what it preaches. It is obliged to do what it saya (and say what it does) to gain the confidence of both parties involved in the… [END OF PREVIEW] . . . READ MORE

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