Tuesday, November 19, 2013

Strategic Options - Potential Generic Drug Game Changer

Relevance

Mylan Inc. is the #2 generic drug maker in the world known for its staple product the EpiPen - a perfect demonstration of how to be innovative in the generic space. Mylan is growing at a rapid rate with a couple of key M&A's in the past few years. Given this week's theme on strategic options, when I interned this summer at Mylan, I personally saw many strategic initiatives to align the company more as a health company in new areas rather than just as a generics company. Some concerns raised in this week's readings were misidentification of adjacent markets and improperly integrating organizations through M&A.

http://www.bloomberg.com/news/2013-11-19/leaderless-teva-seen-beckoning-mylan-merger-real-m-a.html

This article was released yesterday and many concerns raised revolve around the correct strategic option for Teva (#1 largest generic drug producer) given its current state.

Significance

If Mylan does acquire Teva, it would THE key player in the generics drug market. Its manufacturing capacity and market ownership would be very hard to compete. In addition, the greater prescription of generic drugs by health providers as they try to minimize healthcare costs will further grow demand in the generic drug market.

Question
"The 7 steps to strategy making"involved stages where tests must be designed and applied to see if the strategic option is a good choice. In M&A situations, how would management go about "testing" the potential acquisition to see if the other company's culture and system matches up with the acquiring company?

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