Specification and Design Dissertation Example | Topics and Well Written Essays - 1500 words

Specification and Design - Dissertation Example For instance crime scenes where a person had been shot, when the medics arrive, they had to wait for the police before they could save the individual, therefore the sponsors found the need for a communication system where the information from an emergency scene would reach all the people involved in the emergency simultaneously. The aim of the project, therefore, is to create a communication system where information that originated from a scene of emergency would reach all the people involved at the same time, therefore, hasten the pace of response. In this project, the solution that would enable the integration of all the people involved in response in one call would be the use of Voice over Internet Protocol (VoIP). In designing the VoIP, a software will be designed that will enable a victim of an emergency to communicate with several departments that are responsible for responding to a certain emergency. The software will be designed in such a way that for instance when it is a fi re emergency, the relevant personnel will be notified which will be different from the case of a crime scene. This will be enabled by the programming which when a person chooses the type of an emergency, the software will direct the calls to the specific departments that are responsible to respond to the emergency. There will be no major modifications, however, due to the sophistication of crime and to avoid tampering of the software by criminals, the security protocol of the software will be improved to match the best practices in the communication sector. Literature survey With the current paces in technology where there is the increasing number of service that is available over a wire and wireless connections, the technology is changing from narrowband such as telephones over wires to the wideband where the services that previously used the narrowband would migrate and use the wideband. According to Bonometti article, â€Å"competitive business advantages in the era of unified s uper convergence† digital convergence will expand by entailing the following. Improved evenness in information flow between the cable and cable-less communication technologies, which will be the outcome of changes in cable-less technology, standards and protocol. Real dependence between gadgets, platforms and the multimedia types that they support. The third thing that digital convergence will entail is the intelligence functions such as the semantic web and other machine-based interactions and embedded applications that enable content searches in rich media (Bonometti, 2009, p 248-257). A study by William and Russell on Huawei, which is a technology firm, based in China where it has always been believed that the country is the greatest copier of technologies that have been developed by other countries. In this study, they found out that despite Huawei being a global leader in the provision of Softswitch platform that is used in VoIP, it has been involved in developing of tech nologies in the next generation networks (NGN) that provide for the multimedia solution across different platforms such as mobile phones, landlines, and television sets. The article â€Å"Customized Executive Learning: a Business Model for the Twenty-First Century† by Jamie Anderson and Gert-Jan.

Black hawk down

Black hawk down Analysis It can be argued that Black Hawk Down is accurate in the sense of numbers and statistics. Yes, two Black Hawk helicopters were shot down 19 Americans were killed, 84 wounded, and an estimated 2000 Somalis were killed and even more wounded.Yes the street fighting was realistic, and yes, they were in Mogadishu that day to capture two top lieutenants in Aidids government, and therefore from a military point of view, was a successful mission.But the film fails to retell the complexities of why the Americans are there in the first place. It is more a tool of American Hollywood propaganda than an accurate account of the Battle of Mogadishu. In Black Hawk Down the American soldiers are shown in an overly heroic way. No doubt these men were very brave struggling to survive with the odds so greatly against them. But the way they are portrayed and glorified is the patriotic nonsense one can expect from Hollywood. These soldiers are depicts without faults, and they can do no wrong. They are the ideal family men who constantly look after one another. Any facts that may contradict this, like their contribution to the Somali death toll before the battle (6-10,000 casualties in the summer of 1993 alone, two-thirds women and children) is conveniently left out. Their only shortcoming is the disastrous way the mission was handled but there is no blame put on them for that in the movie.  Ã‚  Ã‚  Ã‚   The Battle of Mogadishu was clearly not a battle of â€Å"good versus bad as most things in life are. But the seeing the way the Somalis are portrayed as evil, barbaric and mindless people, it is clear that the movie would certainly like us to think that this was the case. The American soldiers are established as the saviours of the Somalis, and it is these soldiers who are wrongfully attacked. By using dramatic camera shots, and clichà ©d Hollywood lines like â€Å"Nobody asks to be a hero, it just sometimes turns out that way† help to drive home the themes of brotherhood and comradeship. By graphically showing the wounds and casualties of the American soldiers, the movie evokes sympathy and removes the blame for the catastrophe from the soldiers. They are portrayed as heroic and patriotic, but this portrayal is misleading. The film begins with scenes of starving Somalis on the brink of death or already dead; the screen is tinted blue to heighten the feeling of sadness. They all live in dilapidated huts, and the whole situation seems desperate children taking care of their dying parents. A sort â€Å"history† of American involvement is displayed on the screen: â€Å"Years of warfare among rival clans causes famine on a biblical scale† â€Å"Behind a force of 20,000 U.S. Marines, food is delivered and order is restored.† no mention of the USs past involvement in selling arms to the dictators, or helping to stir up clan violence. The audience only knows what they are being told the US troops are the good guys saving the day, not at all having anything to do with causing these atrocities. And after the audience is full of sorrow for the Somalis, a bright image of US military vehicle bringing food and supplies to Somalia. We are relieved that the Somalis are receiving the help they need, and we are subconsciously relieved that the blue tint is gone. So from the beginning of the movie we are made to see that the US military is the saviour and we as the audience are therefore indebted to them. We also now have sympathy for the soldiers it is this sympathy that dominates the rest of the film. Because the storyline of Black Hawk Down is just one big battle scene there are no subplots to entertain a wider audience, the themes of comradeship are over emphasized (mostly in a clichà ©d way) to make it more appealing. The tagline of the film is â€Å"leave no man behind† this is repeated about four times in the film, to the point where we can predict when it is coming. Similarly, we are flooded with messages of dedication and solidarity. Lines like â€Å"I think I was trained to make a difference† and â€Å"Its what you do right now that makes the difference.† These kinds of lines are without a doubt used to emphasize the honour and comradeship between the soldiers, it rather detracts the human interaction of these characters by reducing them to clichà ©d statements of emotion or motivation. The line â€Å"make a difference† is both overused and ambiguous what do the soldiers hope to make a difference in? This constant repetition of such dialogu e is a demonstration of the filmmakers wish to portray the American soldiers as good and moral men. Also this simplicity and predictability of these lines could be intended for us to make an easy definition between good and evil, and hero and villain. The American soldiers all have their specific identities, and their portrayal is made extremely personal compared to that of the Somalis. We have the â€Å"bad boy† the â€Å"underdog† and the â€Å"rookie† to name a few, and just to make sure we know who is who, the soldiers have their names written on their helmets (which was not done in reality). We see that these soldiers are people like us they watch television, play chess and do things any one of us would do. Most of all they are devoted family men. One soldier, after being severed I half, in his last words says: â€Å"Tell my girls Ill be okay.† And another one on his deathbed â€Å"Tell my parents that I fought well today, that I fought hard† even in death he is seeking his familys approval. This use of the soldiers having families makes our experience of these characters a much more personal one.   The Americans only shoot militia, not one innocent man, women or child is shot. However, we all know that this cannot be the case as in most urban conflicts; civilians are almost the highest casualties. Soldiers from that day have been quoted as saying â€Å"we fired on crowds and eventually at anyone and anything they saw. With these family members in mind, the horrific and graphic way in which the American casualties are displayed only reinforces our sympathy for the plight that the soldiers are in most of the gore and blood in the movie belongs to Americans, not Somalis a severed thumb attached only by a thread, a white detached arm that is picked up off the ground, a stomach pierced by a missile, a soldier severed in half, are all examples of American casualties. Thus the Americans are portrayed as the â€Å"good guys†, while the Somalis as the â€Å"bad guys† who inflict these casualties. With the â€Å"good guy† established, it seems natural have the opposite the â€Å"bad guy†. Enter the Somalis. Dressed all in black with shadowed sinister faces, accompanied by dark techno music they are the epitome of evil. We are unable to differentiate between one Somali and the next, and there are no names given to them. Their actions seem to be motivated by nothing more than the thirst for the blood of white men, Americans in particular. Even before the fighting starts, in the market place scenes, the camera does not focus on one Somali. They have no personalities, and their everyday lives are trivialized. The Somalis are therefore on the periphery of a movie set in Somalia. Even the extras do not resemble Somalis, but rather any black people. Another point is that the militia become indistinguishable from the citizens of Mogadishu. Even though the military officials in the movie say that those holding weapons are part of the militia. There is another scene when a general says:â€Å"The whole city is gonna come down on them.†At this point the distinction between citizenry and the militia is lost we know believe that the entire city is engaged in the conflict, which we therefore assume are all sided with Aidid. But there were reports that many of the Somalis were not part of Aidids militia but rather people who thought their homes were under attack and were therefore protecting their homes. The Somalis are depicted as a pack of rabid animals snarling at fallen soldiers, shooting at a corpse and fast moving hands grabbing at the fallen helicopter all convey an unexplained sense of hostility. Somalis appear like packs of animals with the use of aerial camera angles showing swarming bodies. There is nothing of Somali culture in the movie, and they are not given a voice. The Americans â€Å"affectionately† refer to the Somalis as â€Å"skinnies†.   We are told that thousands of Somalis were killed, but every time a Somali is shot, it is clean, and he (or she) conveniently falls away from the camera. There is no blood or gore like the American injuries. There are no innocent women or children killed, and in this way Black Hawk Down does not let us see the full scope of the devastation of the thousands of Somali deaths. This only allows for the interpretation of the Somalis as the â€Å"bad guys†. The US government had been involved in the making of Black Hawk Down since it first started being written, and the creators had the full co-operation and approval of the military because of the pro-American bias of the movie. The producer Jerry Bruckheimer has been quoted as saying to the Army vice chief of staff: â€Å"General, Im going to make a movie that you and your Army will be proud of.† The creators were allowed full use of military equipment and training, as well as dozens of actual soldiers for extras. But, the military, to ensure precision, monitored the filming daily.   Special task teams were set up to provide the moviemakers with specific military advice. Helicopters and Humvees were also loaned to them.It seems appropriate that a film endorsed by the US military, will have the views of the US military. And not surprisingly has had an overwhelmingly positive response from the military; Former Vice President Dick Cheney and Former Defense Secretary Donald Rumsfe ld and were among those pleased at the screening of the movie, and Army Secretary Thomas White gave the film a thumbs up

An Investigation to Show the Effect of Temperature on Daphnia :: Papers

An Investigation to Show the Effect of Temperature on Daphnia Plan: I will submerge some daphnia contained in a test tube in water of differing temperatures and measure their subsequent heart rates. Hypothesis I think that the heart rate of the daphnia will increase up until around 40ËÅ ¡C at which point most of the daphnia's enzymes will have denatured and rate of metabolism will have stopped or decreased sufficiently to have stopped the daphnia's heart rate. Apparatus list Test tube Beaker Different temperatures of water Daphnia Pipette Stop clock Microscope Slide Safety Follow usual lab safety rules. There are no major safety considerations in this experiment as the daphnia aren't harmful and water above 40ËÅ ¡C will not be used. Method To determine if temperature does have an effect on the daphnia, I intend to carry out the following experiment. The experiment will involve measuring the cardiac activity of the daphnia at different temperatures, ranging from very cold (approx. 5 degrees Celsius) to quite warm (approx. 40 degrees Celsius). ÂÂ · A selection of similar sized/age Daphnia will be taken. ÂÂ · A variety of different temperatures of water will be set up, these temperatures will be kept constant whilst the daphnia are submersed in them. The temperatures will be set up by using ice to cool tap water down to lower temperatures and boiling water to heat it up. The temperature will be measured to within 0.1ÂÂ °C on a mercury thermometer to ensure accuracy. The temperatures will range from 10ÂÂ °C to approximately 40ÂÂ °C and it will be done at 5ÂÂ °C intervals. ÂÂ · The daphnia will be submersed in the water and left to equilibrate for 3 minutes, after this time one of the Daphnia will be removed and put onto a microscope slide, this will then be quickly put under the microscope. -1- ÂÂ · Under the microscope, the Daphnia will be observed for 20 seconds, this heart rate will be counted and recorded, this can the be

Nanotechnology Uses to Enhance Computer Performance Essay

Although the core concepts of nanotechnology were introduced in the early 1950’s, nanotechnology was not properly introduced to the world until 1974. That was the year a Japanese scientist, named Tanigushi, coined the word â€Å"nanotechnology†. Nanotechnology refers to the constructing and engineering of systems at the atomic level. â€Å"Nanotechnology will be the major technology in development of every machine in coming years. † (Wifinotes, n. d. ) Nanotechnology will greatly improve the functionality and performance of computers. Body  In everyday terms, â€Å"Nanotechnology is based on manipulations of individual atoms and molecules to build complex atomic structures. † (Tarasov, 2009, pg. 1) Working at the atomic level is a very new technology. The size of a nanometer is one-billionth of a meter. For comparison purposes, â€Å"A very fine human hair is about 10,000 nanometers wide, which is the smallest dimension we can see with the naked eye. † (Cook, 2005) Before research could begin, researchers had to first invent a machine that could work with such small particles. Their goal was to manipulate atoms and molecules into a particular configuration – a configuration capable of performing functions similar to a microprocessor. The technology prior to nanotechnology started out rather primitive. It was a major advance in technology when vacuum tubes were invented. They came into existence about the same time Thomas Edison invented the light bulb. Vacuum tubes were first used in computers in 1946 until 1958. By then, vacuum tubes could not be made any smaller, so technology gave us transistors. Transistors were used in computers from 1959 to 1964. One transistor took the place of 40 vacuum tubes. When the limits of the transistor were reached, computer builders used integrated circuits from 1965 to 1970. In 1971, the microprocessor came into computer use. Faster and smaller than anything so far, the microprocessor led to the invention of personal computers. Now that the advancement of microprocessors has nearly reached its limits, it is now time for the next generation of processor, which some researchers say will be engineered on the nanometer scale. But, how will they manipulate particles on such a minute scale? Before manipulating atoms into the desired position, researchers had to see them first. Researchers had to invent a microscope that would allow them to see atoms. In 1981, IBM researchers invented the Scanning Probe Microscope (SPM). (University of Wisconsin, 2008) This microscope allowed researchers to â€Å"see† atoms. As it turns out, in 1989, researchers found they could actually manipulate atoms into the desired position with the SPM. †¦researchers have been able to manipulate and stabilize atomic-size structures in such a way that they can persistently maintain the qualities needed to be classified as viable, though still strictly experimental, computational devices. † (Goth, 2012) Atoms are constantly moving, so catching one to move around was very difficult. The atoms needed to be cooled down to near absolute zero, to -450 degrees Fahrenheit, the temperature where most atoms hardly move. The Scanning Probe Microscope (Nanooze, 2005) After cooling the atoms, researchers were able to use the SPM to move individual atoms to a specific location. One at a time, they moved the atoms into position to spell â€Å"IBM†. It took them nearly an entire day to do it. See image below: Atoms arranged to spell IBM (Nanooze, 2005) Since the first manipulation of atoms had been demonstrated, researchers have continued to move atoms into complicated configurations, as shown in the figure below. Depiction of a nanotechnology produced gear set (Wifinotes, n. d. ) After all the groundwork had been laid, computer researchers turned their attention to using nanotechnology in the computer world. Their first target was the microchip. Current microchip technology limits have nearly been reached and the researchers went to work shrinking the size of the processors . â€Å"†¦ etching [lithography] techniques can only take features so far – anything below 22nm is just not feasible. † (European Nanotechnology Gateway, n. d. ) Right now, the newest chipsets using lithographic etching are being produced with 65nm features. Intel has realized a 10-15% improvement in drive current, which means greater performance, through the use of nanotechnology. Meanwhile, at IBM, to aid the shrinking of the processors, â€Å"researchers have developed transistors from carbon nanotubes. †( European Nanotechnology Gateway, n. d. ) Carbon nanotubes show great improvements compared to conventional silicon transistors. â€Å"The carbon nanotubes are long, thin strands of carbon molecules. In the lab, they delivered more than double the amount of electrical current compared to the top-performing transistors currently on the market. †( European Nanotechnology Gateway, n. . ) â€Å"A single strand of carbon atoms (red)†¦contained in a multi-walled carbon nanotube. † (American Institute of Physics, 2003) Lithographic etching is being replaced with a new process called â€Å"block co-polymer lithography†, or BCP. Scientists have found a process to create nano-scale patterns that is expected to be used in the manufacture of microprocessors. Using the new process, silicon wafer features have been developed between five and 20 nanometers thick – much smaller than the current 65 nanometers. In the figure below, you can see an image of a nano-scale microprocessor created by the BCP process: (Nanotechnology, 2011) According to Nanotechnology – Future Technology: †¦with the use [of] nanotechnology, it could be possible to transform desktop computers into computers that are the size of a watch but with more operating capacity and they will also last longer than current computers†¦Computers with the capabilities of current workstations will be the size of a grain of sand and will be able to operate for decades with the equivalent of a single wristwatch battery. This technology advancement will make computers more abundant, cheaper to manufacture, faster, and smaller. (Nanotechnology – Future Technology, 2012) When a processor’s feature size is reduced, it uses less electricity and produces less heat, thereby becoming more efficient and economical to operate. Being more efficient and economical also means faster, more reliable overall performance of the computer. Conclusion Nanotechnology will provide the world with advancements in electronics along with many other fields, such as biology, chemistry and medicine. In the future, nanotechnology will play a major role in the discovery of new components, such as nano-sized microprocessors, and will enhance many other existing technologies. â€Å"Nanotechnology will be the major technology in [the]development of every machine in coming years. † (Wifinotes, n. d. ) Nanotechnology will greatly improve the functionality and performance of computers.

Mba Spring2011 Merck Sample Group Project

DELAWARE STATE UNIVERSITY (MBA – Spring 2011) Strategic Management Case Study Executive Summary:3 Current Vision4 Current Mission4 Values5 Current Strategies:6 Developed Vision7 Developed Mission7 Reason for new mission8 SWOT Analysis9 External opportunities:9 External Threats:10 Financial and Operating Performance Analysis11 Close Competitors11 Ratio Analysis11 Key Industry Ratios14 Operating Profit margin14 Net Profit margin14 Current Ratio14 Return on Assets15 Debt/Equity Ratio15 Inventory Turnover Ratio15 Revenue Growth16 Market Share16 Internal Strengths16Internal Weakness20 External Factor Evaluation Matrix21 Competitive Profile Matrix23 Internal Factor Evaluation24 Space Matrix27 SWOT Matrix29 Grand Strategy Matrix31 Recommended Strategies31 Recommended strategy No. 1:31 Recommended strategy No. 2:32 Projected Financial Statements33 Projected Ratios34 Company worth Analysis34 Annual Objectives:35 Strategic Review and Evaluation Procedures:35 Bibliography:36 Executive Su mmary: Merck & Co. is a research driven pharmaceutical company involved in manufacturing of pharmaceuticals and drugs.Merck's products are not limited to preventive and therapeutic vaccines. Merck merged with Schering-Plough in November of 2009 for $41billion. Merck is based in Whitehouse Station, New Jersey and has more than 110000 employees. The company has a annual revenue of $45billion during the year ending December 2010. The increase in revenues was mainly due to the incremental sales resulting from the inclusion of the post-merger results of Schering-Plough products. The operating profit of the company was $1,653. 0 million during FY2010, a decrease of 90% over 2009.The net profit was $859 million in FY2010, an increase of 93% over 2009. Merck’s products include preventive and therapeutic vaccines sold by prescription to treat human disorders and to also treat animal health. The company manages many products in different segments. Human health pharmaceutical produc ts consist of prescription therapeutic and preventive agents for the treatment of human disorders. Merck distributes its human health pharmaceutical products to retailers, government, drug companies, health and wellness organizations, and others.Merck's vaccine products are primarily managed and administered at physician offices. These products include preventive vaccines. The US Centers for Disease Control and Prevention Vaccines for Children program is a major customer for some of these vaccines. Merck also manages a clinical pipeline that has products in many different disease domains not limited to diabetes, heart strokes, hyper-tension, inflammatory problems, neurology related diseases, osteoporosis, respiratory, female health and many other prominent and new domains.This pipeline is managed in phases followed by a few ready for registration. Majority of these are subject to FDA approval before commercial manufacturing commences. Merck also manages vaccines for animal health an d this is a growing segment where there is more need for research for prevention of many diseases in animals. In addition to the above many different segments, Merck also manages a portfolio of regular consumer healthcare and manufactures many OTC products, foot and sun care products not just in the USA but also in Canada. Current VisionWe make a difference in the lives of people globally through our innovative medicines, vaccines, and consumer health and animal products. We aspire to be the best healthcare company in the world and are dedicated to providing leading innovations and solutions for tomorrow. (1) Current Mission To provide innovative, distinctive products and services that save and improve lives and satisfy customer needs, to be recognized as a great place to work, and to provide investors with a superior rate of return. (1) | Mission Component| Accomplished? | 1| Customers| No| | Products or Services| Yes| 3| Markets| No| 4| Technology| No| 5| Concern for survival, gro wth and profitability| No| 6| Philosophy| No| 7| Self-Concept| No| 8| Concern for public image| Yes| 9| Concern for employees| Yes| Values Our business is preserving and improving human life. We also work to improve animal health. All of our actions must be measured by our success in achieving these goals. We value, above all, our ability to serve everyone who can benefit from the appropriate use of our products and services, thereby providing lasting consumer satisfaction.We are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. We are dedicated to the highest level of scientific excellence and commit our research to improving human and animal health and the quality of life. We strive to identify the most critical needs of consumers and cust omers, and we devote our resources to meeting those needs.We expect profits, but only from work that satisfies customer needs and benefits humanity. This depends on maintaining a financial position that invites investment in leading-edge research and that makes it possible to effectively deliver the results of that research. Our ability to excel depends on the integrity, knowledge, imagination, skill, diversity and teamwork of our employees. To this end, we strive to create an environment of mutual respect, encouragement and teamwork. We also strive to reward commitment and performance and be responsive to the needs of our employees and their families. 1) Current Strategies: * The Access Strategy aims at increasing access to medicines, vaccines, and healthcare in the emerging and developed countries. * To ensure safety and quality of products, Merck introduced a ‘Anti-counterfeiting’ strategy to prevent counterfeits across the world. Merck has setup an advanced laborato ry to implement this strategy.* To restore confidence as a quality producer of global vaccines, Merck continues to implement vaccine supply manufacturing strategy. * Merck continues to implement its global diversity strategy. * Merck’s research strategy is designed to mprove productivity and the probability of success and this is monitored by a Research Strategy Review Committee. * The most popular MRL strategy i. e. Merck Research Laboratory strategy is designed to manage the pipeline that uses the expertise to treat many unsolved diseases and health issues. MRL scientists are passionate about resolving and meeting unmet medical needs. * Merck established External Basic Research (EBR) and an EBR strategy are formulated to expand the scope and size of Merck’s early pipeline through partnerships with external partners. * Merck follows a responsible pricing policy thru its worldwide tiered pricing strategy. To foster health literacy in Switzerland, Merck follows the Swis s e-health strategy and as part of this strategy, they work with universities around the world. * Merck formed a Global Labor Relations Strategy to include global labor guidelines and principles and monitoring tools worldwide.* Merck energy management strategy serves as a useful framework in measuring current performance resulting in Merck receiving the Energy Star sustained excellence award. * Merck’s corporate strategy is â€Å"Plan to win†. * Merck has a supply strategy that combines the skills of internal and external manufacturers. (1) Developed Vision Our vision is to be an outstanding and most trusted company in the world’s healthcare and pharmaceutical industry. † Developed Mission We are passionately committed to providing creative, comprehensive and effective health solutions (2) that will improve the health, wellness and quality of life of our customers (1), consumers and partners around the globe for today, tomorrow and forever thru our continu ed superior performance, intelligent and creative employees (9), innovative and qualitative safe products, sustainable and profitable partnerships and by building increased shareholder returns thru this process.We will focus on increasing healthcare access (6) in the local and emerging markets (3) and will strive to use modern environment friendly technology(4) for our scientific innovation to improve productivity and to reduce costs to make our products more affordable. We will serve the society and the eligible people (8) with programs that will provide free and cost effective health solutions. We will collaborate with global research companies to lead and contribute to the resolution of global health issues (7) and we will position ourselves as the best in the industry with sustainable prosperity(5). Mission Component| Accomplished ? | 1| Customers| Yes| 2| Products or Services| Yes| 3| Markets| Yes| 4| Technology| Yes| 5| Concern for survival, growth and profitability| Yes| 6| P hilosophy| Yes| 7| Self-Concept| Yes| 8| Concern for public image| Yes| 9| Concern for employees| Yes| Reason for new mission The current mission is not exciting and does not emphasize on all the key components of an effective mission. The new mission emphasizes on health solutions as a whole versus products and services only. The new mission is targeted towards the wellbeing of the end consumer and not just to save the life.The focus is specifically mentioned to be in all markets including the emerging markets. Modern environment friendly technology will be used to develop safe products that are not counterproductive to the wellbeing of the end consumer. The needy people will be served with effective solutions and the new mission passionately suggests sustainable prosperity while engaging creative and intelligent people building profitable shareholder returns thru the whole process. SWOT Analysis External opportunities: O1 – The recent agreement with Schering-Plough opens mo re avenues for potential growth in the fields of respiratory and infectious disease herapeutic segments. (1) O2 – Possible Cost savings of $3. 5 Billon from internal restructuring efforts beyond 2011. (1) O3 – There is a lot of potential for growth in the Diabetes and Oncology markets and Merck has made its entry into this market thru the product Januvia. O4 – Merck can add core strength to its portfolio by expanding research and innovation in the biological markets thru partners, acquisitions and joint ventures. O5 – Rapidly expanding market share in emerging markets proves to be a high potential opportunity for Merck.Emerging Markets in the Pharma Industry will take 50% Growth Credit by 2013. (2) O6- Increased opportunity for new Generic Drug products. Healthcare reform suggests cost savings and insurance industries emphasize usage of generic drugs and the expiring patents on a lot of drugs opens up opportunity for Merck to pioneer the generic drug mark et leveraging its world-class research capabilities. The total market share of the patents that will expire over 2010-2015 is 17% with a market share of $142billion. (17) O7- Pfizer’s animal health business returned a profit of $2. billion which is second to Merck and with the cancelled joint venture of Merck and Sanofi-Aventis, Merck should further pursue their concept with Novartis who are No. 5 in animal health business. This will strengthen their No. 1 position in the light of Pfizer's growing sales and the merger between J;amp;J and Eli Lilly Co in this segment. (3) External Threats: T1 – At least five of the patents are expiring in the next two years and competition is ready to introduce generic products backed by healthcare reform and this can pose a serious threat to Merck’s products and profitability.T2 – The consumer is not the one that usually makes the choice of using a particular drug. Mostly, drugs are prescribed by physicians, who sometimes lack the necessary information about relative prices. (4) T3 – The recent housing market problem, the oil prices problem and the global recession has a cascading effect on the job market and many people are unemployed losing their health insurance and forced to not being able to use medical or pharmaceutical products.If there is no sales in the pharmaceutical products, Merck can suffer financial losses and reduced returns to shareholders. T4 – The HealthCare Reform enacted in 2010 caused unanticipated losses for Merck and the effects of this Act will continue into future. These new provisions will decrease revenue and increase costs. (5) * 2010 – Costs incurred due to increased Medicaid rebates. With respect to the effect of the law on the pharmaceutical industry, the law increased the mandated Medicaid rebate from 15. 1% to 23. 1%. 2011 – An annual health care reform fee on all branded prescription drug manufacturers and importers and the requirement th at drug manufacturers pay a 50% discount on Medicare Part D utilization incurred by beneficiaries when they are in the Medicare Part D coverage also known as the ‘Donut hole’.T5 – Although not included in the health care reform law, Congress has also considered, and may consider again, proposals to increase the government’s role in pharmaceutical pricing in the Medicare program. (5) T6 –    Congress may again consider proposals to allow, under certain conditions, the importation of medicines from other countries. 5) T7 – Merck is experiencing delay in manufacturing some of its vaccines and this delay can cause a competitor to launch a product that can be manufactured quickly. Financial and Operating Performance Analysis Close Competitors Pfizer Inc. Eli Lilly and Company Ratio Analysis | 2006| 2007| 2008| 2009| 2010| Margins (% of Sales)| | | | | | Revenue| 100. 00%| 100. 00%| 100. 00%| 100. 00%| 100. 00%| COGS| 26. 50%| 25. 40%| 23. 40%| 3 2. 90%| 40. 00%| Gross Margin| 73. 50%| 74. 60%| 76. 60%| 67. 10%| 60. 00%| SG;amp;A| 36. 10%| 31. 20%| 30. 90%| 31. 10%| 28. 80%| R;amp;D| 21. 10%| 20. 20%| 20. 10%| 21. 30%| 23. 90%|Other| 0. 60%| 1. 40%| 4. 30%| 6. 00%| 2. 10%| Operating Margin| 15. 70%| 21. 90%| 21. 20%| 8. 70%| 5. 20%| Net Int Inc ;amp; Other| 12. 40%| -7. 40%| 20. 50%| 47. 00%| -1. 60%| EBT Margin| 27. 50%| 13. 90%| 41. 10%| 55. 80%| 3. 60%| Profitability| | | | | | Tax Rate| 28. 70%| 2. 80%| 20. 40%| 14. 80%| 40. 60%| Net Margin| 19. 59%| 13. 54%| 32. 74%| 47. 03%| 1. 87%| Asset Turnover| 0. 51| 0. 52| 0. 5| 0. 34| 0. 42| (Average)| | | | | | Return on Assets| 9. 92%| 7. 05%| 16. 34%| 16. 20%| 0. 79%| Financial Leverage (Average)| 2. 54| 2. 66| 2. 52| 1. 9| 1. 95| Return on Equity| 25. 00%| 18. 33%| 42. 27%| 33. 15%| 1. 1%| Growth| | | | | | Revenue Growth| | | | | | Year over Year| 2. 80%| 6. 90%| -1. 40%| 15. 00%| 67. 70%| 3-Year Average| 0. 20%| 1. 80%| 2. 70%| 6. 60%| 23. 90%| 5-Year Average| -13. 90%| -1 4. 10%| 1. 20%| 3. 60%| 15. 90%| 10-Year Average| 1. 30%| 0. 20%| -1. 20%| -1. 80%| 1. 30%| Operating Income| | | | | | Year over Year| -36. 00%| 49. 30%| -4. 50%| -52. 80%| -0. 70%| 3-Year Average| -24. 90%| -7. 20%| -3. 00%| -12. 30%| -23. 50%| 5-Year Average| -18. 30%| -11. 40%| -9. 60%| -18. 50%| -15. 60%| 10-Year Average| -3. 40%| -0. 70%| -2. 30%| -10. 90%| -12. 60%| EPS| | | | | | Year over Year| -3. 30%| -26. 60%| 144. 0%| 55. 20%| -95. 00%| 3-Year Average| -11. 40%| -17. 00%| 20. 10%| 40. 70%| -42. 70%| 5-Year Average| -8. 40%| -13. 90%| 4. 50%| 16. 70%| -33. 20%| 10-Year Average| 2. 60%| -2. 30%| 5. 40%| 8. 70%| -20. 90%| Cash Flow Ratios| | | | | | Operating Cash Flow Growth-YOY| -11. 10%| 3. 50%| -6. 10%| -48. 40%| 219. 00%| Free Cash Flow Growth-YOY| -6. 80%| 3. 50%| -11. 90%| -63. 40%| 373. 40%| Cap Ex as a % of Sales| 4. 30%| 4. 20%| 5. 40%| 5. 30%| 3. 60%| Free Cash Flow/Sales| 25. 56%| 24. 75%| 22. 11%| 7. 04%| 19. 88%| Free Cash Flow/Net Income| 1. 3| 1. 83| 0. 68| 0. 15| 10. 64| Liquidity/Financial Health| | | | | |Current Ratio| 1. 2| 1. 23| 1. 35| 1. 8| 1. 86| Quick Ratio| 0. 95| 0. 97| 0. 65| 1. 03| 1. 25| Financial Leverage| 2. 54| 2. 66| 2. 52| 1. 9| 1. 95| Debt/Equity| 0. 32| 0. 22| 0. 21| 0. 27| 0. 28| Efficiency| | | | | | Days Sales Outstanding| 50. 3| 52. 4| 56. 7| 69. 1| 55. 4| Days Inventory| 104. 2| 108. 5| 136. 1| 209. 2| 138. 1| Payables Period| 29. 4| 33. 3| 40. 6| 57. 8| 45. 1| Cash Conversion Cycle| 125. 1| 127. 6| 152. 3| 220. 5| 148. 4| Receivables Turnover| 7. 3| 7| 6. 4| 5. 3| 6. 6| Inventory Turnover| 3. 5| 3. 4| 2. 7| 1. 7| 2. 6| Fixed Asset Turnover| 1. 6| 1. 9| 2| 1. 8| 2. 6| Asset Turnover| 0. 5| 0. 5| 0. | 0. 3| 0. 4| Reference – (6) Key Industry Ratios Operating Profit margin 2010| MERCK| PFIZER| Eli Lilly and Company | Operating Profit margin| 5. 2| 20. 3| 28. 3| Merck had Operating Profit margin of 5. 2 OPM%. Merck Operating profit margin is low when compared to competitors; this indicates that there is scope for improving the cost structure. Net Profit margin 2010| MERCK| PFIZER| Eli Lilly and Company | Net Profit margin| 1. 87| 12. 18| 21. 97| Merck had a Net Profit margin i. e. , 1. 87 NPM%. Merck NPM is lower than its competitors. A net profit margin indicates that there is scope for improving the capital structure.Huge percentage drop when compared to 2009 (47%). Current Ratio 2010| MERCK| PFIZER| Eli Lilly and Company | Current Ratio| 1. 86| 2. 11| 2. 09| Current Ratio: Merck has Current Ratio of 1. 8, which shows that Merck may meet short-term obligations. Current Ratio 2. 0 is considered good to meet short-term financial obligations. Return on Assets 2010| MERCK| PFIZER| Eli Lilly and Company | Return on Assets| 0. 79| 4. 05| 17. 34| Return on Assets (ROA): Merck has ROA of 0. 79%, which indicates its assets are NOT at optimum their utilization. Debt/Equity Ratio 2010| MERCK| PFIZER| Eli Lilly and Company |Debt/Equity Ratio| 0. 28| 0. 44| 0. 55| Debt/equity ratio (D/E ratio ): Merck had D/E ratio of . 27, which is good. Inventory Turnover Ratio 2010| MERCK| PFIZER| Eli Lilly and Company | Inventory Turnover Ratio| 2. 6| 1. 6| 1. 6| Inventory Turnover Ratio: Merck has a 2. 6 times turnover ratio, which is good when compare to competitors. It also suggests that loss of sales as it will not have sufficient stock in hand. Revenue Growth 2010| MERCK| PFIZER| Eli Lilly and Company | Revenue Growth| 67. 7| 35. 6| 5. 7| Revenue growth: Merck Sales growth rate is 67%, Revenue growth is very good when compared to competitors.New products Isentress and Januvia  sales boosted revenue. Market Share Market share: – Total Pharmacy industry share is $836 billion and Merck has $46 billion, stands one of the largest company in 2010 – 5. 5 % of Global Market. Internal Strengths S1 – Merck maintains strong financial health despite the $8. 5 billion debt needed for the acquisition. Analysts are predicting that the combined company will generate a $12 billion cash flow in 2011 which should help repay the debt quickly. (7) S2 – Majority of the blockbuster products introduced recently showed very strong sales.Especially, Januvia (diabetes), Isentress (HIV), and Gardasil. (7) S3 – Merck has strong earnings when compared to the industry. | Stock| Industry| S;amp;P 500 | Stock's 5Yr Average*| Price/Earnings| 122. 0| 17. 7| 16. 6| 40. 7| Price/Book| 1. 9| 2. 6| 2. 2| 4. 0| Price/Sales| 2. 3| 2. 6| 1. 4| 3. 5| Price/Cash Flow| 9. 8| 10. 1| 8. 5| 19. 9| Dividend Yield %| 4. 5| 3. 4| 1. 7| —| S4 – Merck’s latest acquisition of Schering results in a $6 billion pipeline of drugs with the potential of multiple blockbusters and very few patent losses are expected over the next couple of years.It is predicted that the combination of the two entities should generate $3 billion plus in annual cost savings before 2011. (8) S5 – Global market presence along with production facilities. Merck operates in 120 countries with 31 factories worldwide. (9) Merck follows a unique strategy of integrated markets as below. (10) S6 – Merck is well positioned in some Emerging Markets and is showing robust growth in China and is actively searching for a partner in India. Merck has developed a separate strategy for positioning itself as numero uno in emerging markets. 11) & (12) S7- A vast diversified product portfolio in Medicines, Vaccines, Biologics, Consumer Care and Animal Health. (12) S8 – It has various  patient assistance programs  in U. S. to help the people who are unable to afford the medical treatment in terms of medicine if household income is less than 400% of Federal Poverty Level. (13) S9 – The firm has robust in-house research capabilities that also make it a leader in designing new medical products. Internal Weakness W1 – EPS dropped from $0. 28 from $5. 7 mainly due which reflect a net unfavorable impact resulting from the amortization of purcha se accounting adjustments, in-process research and development (â€Å"IPR&D†) impairment charges, including a charge related to the vorapaxar clinical development program, restructuring and merger-related costs, as well as a legal reserve relating to Vioxx (the â€Å"Vioxx Liability Reserve†) discussed below, partially offset by the gain recognized on AstraZeneca’s exercise of its option to acquire certain assets. (5) W2 – Singulair is Merck’s largest volume selling pharmacy product with a annual sales of $3. billion as of 2010 and this is expiring in Aug 2012. (5) On top of this, FDA announced that a potential link exists between this product and suicidal behavior. (14) W3 – Few of Merck’s late-stage pipeline products did not get approved by FDA. Following drugs did not get FDA approvals anacetrapib for atherosclerosis, cholesterol drug Tredaptive, Rolofylline for heart disease and Telcagepant for migraines. W4 – The firm faced lawsuits on Vioxx product on increased chances of heart attack and Merck Agreement Provides for $4. 85 Billion Vioxx Settlement Payment. 15) W5 – Merck settled a lawsuit with J&J for $500 million over a dispute on two anti-inflammatory records. Merck also looses marketing rights in some areas. (16) W6 – Merck’s Current ratio is 1. 8, has a limited liquidity position as compared to its competitors. W7 – Merck has minimal presence in the Generic Drug Market. External Factor Evaluation Matrix | External Factor Evaluation Matrix (EFE)|   |   |   |   | Opportunities| Weight| Rating| Weighted Score| 1. | O1 – The recent agreement with Schering-Plough opens more avenues for potential growth in the fields of respiratory and infectious disease therapeutic segments | 0. 8| 4| 0. 32| 2. | O2 – Possible Cost savings of $3. 5 Billon from internal restructuring efforts beyond 2011. | 0. 10| 3| 0. 30| 3. | O3 – There is a lot of po tential for growth in the Diabetes and Oncology markets and Merck has made its entry into this market thru the product Januvia | 0. 05| 3| 0. 15| 4. | O4 – Merck can add core strength to its portfolio by expanding research and innovation in the biological markets thru partners, acquisitions and joint ventures| 0. 05| 1| 0. 05| 5. | O5 – Rapidly expanding market share in emerging markets proves to be a high potential opportunity for Merck.Emerging Markets in Pharma Industry to take 50% Growth Credit by 2013 | 0. 10| 3| 0. 30| 6. | O6- Increased opportunity for new Generic Drug products through more focus on quality R&D. Healthcare reform suggests cost savings and insurance industries emphasize usage of generic drugs and the expiring patents on a lot of drugs opens up opportunity for Merck to pioneer the generic drug market leveraging its world-class research capabilities. The total market share of the patents that will expire over 2010-2015 is 17% with a market shar e of $142billion. | 0. 15| 2| 0. 30| 7. | O7- Pfizer’s animal health business returned a profit of $2. billion which is second to Merck and with the cancelled joint venture of Merck and Sanofi-Aventis, Merck should further pursue their concept with Novartis who are No. 5 in animal health business. This will strengthen their No. 1 position in the light of Pfizer's growing sales and the merger between J;amp;J and Eli Lilly Co in this segment| 0. 02| 3| 0. 06| | | | | | | Threats| Weight| Rating| Weighted Score| 1. | T1 – At least five of the patents are expiring in the next two years and competition is ready to introduce generic products backed by healthcare reform and this can pose a serious threat to Merck’s products and profitability| 0. 5| 2| 0. 30| 2. | T2 – The consumer is not the one that usually makes the choice of using a particular drug. Mostly, drugs are prescribed by physicians, who sometimes lack the necessary information about relative prices. | 0. 05| 3| 0. 15| 3. | T3 – The recent housing market problem, the oil prices problem and the global recession has a cascading effect on the job market and many people are unemployed losing their health insurance and forced to not being able to use medical or pharmaceutical products. If there is no sales in the pharmaceutical products, Merck can suffer financial losses and reduced returns to shareholders. 0. 08| 3| 0. 24| 4. | T4 – The HealthCare Reform enacted in 2010 caused unanticipated losses for Merck and the effects of this Act will continue into future. These new provisions will decrease revenue and increase costs. | 0. 08| 2| 0. 16| 5. | T5 – Although not included in the health care reform law, Congress has also considered, and may consider again, proposals to increase the government’s role in pharmaceutical pricing in the Medicare program. | 0. 03| 3| 0. 09| 6. | T6 – Congress may again consider proposals to allow, under certain conditio ns, the importation of medicines from other countries. 0. 03| 3| 0. 09| 7. | T7 – Merck is experiencing delay in manufacturing some of its vaccines and this delay can cause a competitor to launch a product that can be manufactured quickly. | 0. 03| 2| 0. 06|   | TOTALS| 1. 00|   | 2. 57| Competitive Profile Matrix Competitive Profile Matrix (CPM)| | Merck| Pfizer| Eli Lilly and Company | Critical Success Factors| Weight | Rating| Score| Rating| Score| Rating| Score| Global Expansion| 0. 10| 3| 0. 30| 3| 0. 30| 4| 0. 40| Market Penetration| 0. 06| 4| 0. 24| 4| 0. 24| 2| 0. 12| Pipeline| 0. 15| 3| 0. 45| 4| 0. 60| 2| 0. 30| Patents| 0. 8| 4| 0. 72| 3| 0. 54| 2| 0. 36| R;amp;D| 0. 17| 3| 0. 51| 4| 0. 68| 2| 0. 34| Financial Profit| 0. 05| 2| 0. 10| 3| 0. 15| 4| 0. 20| Customer Loyalty| 0. 00| 3| 0. 00| 3| 0. 00| 2| 0. 00| Market Share| 0. 08| 4| 0. 32| 4| 0. 32| 3| 0. 24| Product Quality| 0. 06| 1| 0. 06| 2| 0. 12| 2| 0. 12| Generic Drugs| 0. 15| 2| 0. 30| 3| 0. 45| 2| 0. 30 | Totals| 1. 00|   | 3. 00|   | 3. 40|   | 2. 38| * Global Expansion: Merck is in 121 countries Pfizer is in 150 countries Eli Lily is in 143 countries. * Pipeline: 94 in Pipeline for Pfizer, Lilly has 15 and 57 in Merck Pipeline excluding registration. Patents: Pfizer has 11 basic patent products and Lily has 8 basic patent products and Merck has 29 basic patent products. * Financial Profit : EPS – Lilly has EPS 4. 58 Merck has 0. 28 Pfizer has 1. 02. * Market Share : Merck has $45 billion and Pfizer has $67 and Lilly has $23 billion. * Product quality : Merck has two major lawsuits whereas Pfizer has one and Lilly has one. * Generic Drugs : Pfizer has 59 generic drugs which is more than what Merck has and what Lilly has Merck is still entering into different JVS with SUN and other pharma companies. Internal Factor Evaluation Internal Factor Evaluation Matrix (IFE)|   |   |   |   | Strengths| Weight| Rating| Weighted Score| 1. | S1 – Merck maintains stro ng financial health despite the $8. 5 billion debt needed for the acquisition. Analysts are predicting that the combined company will generate a $12billion cash flow in 2011 which should help repay the debt quickly. | 0. 05| 4| 0. 20| 2. | S2 – Majority of the blockbuster products introduced recently showed very strong sales. Especially, Januvia(diabetes), Isentress(HIV), and Gardasil. | 0. 08| 4| 0. 32| 3. | S3 – Merck has strong earnings when compared to the industry. | 0. 04| 3| 0. 12| 4. S4 Merck’s latest acquisition of Schering results in a $6 billion pipeline of drugs with the potential of multiple blockbusters and very few patent losses are expected over the next couple of years. It is predicted that the combination of the two entities should generate $3 billion plus in annual cost savings before 2011. | 0. 15| 4| 0. 60| 5. | S5 Global market presence along with production facilities. Merck operates in 120 countries with 31 factories worldwide. | 0. 06| 3 | 0. 18| 6. | S6 Merck is well positioned in some Emerging Markets and is showing robust growth in China and is actively searching for a partner in India.Merck has developed a separate strategy for positioning itself as numero uno in emerging markets. | 0. 15| 3| 0. 45| 7. | S7 A vast diversified product portfolio in Medicines, Vaccines, Biologics, Consumer Care and Animal Health. | 0. 05| 3| 0. 15| | | | | | | Weaknesses| Weight| Rating| Weighted Score| 1. | W1 EPS dropped from $0. 28 from $5. 67 mainly due which reflect a net unfavorable impact resulting from the amortization of purchase accounting adjustments| 0. 04| 2| 0. 08| 2. | W2 Singulair is Merck’s largest volume selling pharma product with a annual sales of $3. 2 billion as of 2010 and this is expiring in Aug 2012. 0. 10| 1| 0. 10| 3. | W3 Few of Merck’s late-stage pipeline products did not get approved by FDA. Following drugs did not get FDA approvals anacetrapib for atherosclerosis, cholesterol drug Tredap tive ,Rolofylline for heart disease ,Telcagepant for migraines| 0. 10| 1| 0. 10| 4. | W4 The firm faced lawsuits on Vioxx product on increased chances of heart attack and Merck Agreement Provides for $4. 85 Billion Vioxx Settlement Payment. | 0. 04| 2| 0. 08| 5. | W5 Merck settled a lawsuit with J;amp;J for $500 million over a dispute on two anti-inflammatory records. Merck also looses marketing rights in some areas. 0. 04| 2| 0. 08| 6. | W6 Merck Current ratio is 1. 8, has a limited liquidity position as compared to its competitors. | 0. 05| 2| 0. 10| 7. | W7 Merck has minimal presence in Generic Drug Market. | 0. 05| 1| 0. 05|   | TOTALS| 1. 00|   | 2. 61| Space Matrix Financial Position: * Return on Investment is Average when compare to Industry. * Leverage: Compared to the industry standard, leverage or debt equity ratio of Merck is more industry is whereas Merck is 0. 27. * Liquidity: Current Ratio is around 1. 8. Above 2. 0 is preferred to meeting Short-term obligations. * Working Capital: Working Capital is low. Cash Flow: Cash Flows for 2010 is very good which is around $9 billion. Industrial Position: * Growth Potential: Revenues are up by 67% and successful new product launches. And successful merger with Schering Plough * Financial Stability: After M;amp;A, company financially is in difficult position, but in long-term it will do better. * Ease of Entry into Market: As Merck already exists in multiple markets and different pharma domains, ease of entry into market is considered high for Merck * Resource Utilization: Merck has ROA of 0. 79%, which indicates its assets are NOT at optimum their utilization. Profit Potential: As free cash flows are high, profit potential is more. Competitive Position: * Market Share: Second in global position * Product Quality: Two products have litigations. * Customer Loyalty: Due to Voixx and other products side effects, customer loyalty became average. * Technological know-how: Getting new biotechnology and bio-p harma industry. * Control over Suppliers and Distributors: Merck has control on Suppliers and Distributors. Sustainability Position: * Rate of Inflation: Same as like other products * Technological Changes: Minimal * Price Elasticity of Demand: As more are patent products, the effect will be less. Competitive Pressure: Yes, there is lot of competition with pharma and other generic drug products. * Barriers to Entry into Market: Minimum Barriers. SWOT Matrix SO Strategies: * S5O5O6: Healthcare reform emphasizes a paradigm shift to generic drugs from branded drugs and 17% of the patented drugs are going to expire by 2015 and this is an opportunity of $142 billion and there are not a lot of market players in this segment yet. Merck can take advantage of this upcoming situation and start working on generic drugs in the pipeline to be released in the established and emerging markets.We believe Merck should be able to tap into at least $50billion by this strategy. * S4O4O1: Merck’s merger with Schering results in a $6billion of pipeline of drugs and not many patents are expiring in this set. This strategy will result in $3billion of savings before 2011. Merck should further expand their research and innovation thru joint ventures and innovations in the current, biogenetics and other potential domains and follow a market penetration strategy in current and emerging markets.Merck should further expand their research and innovation thru joint ventures and innovations in the current, biogenerics and other potential domains and follow a market penetration strategy in current and emerging markets. ST Strategies: * S6T4T1: Healthcare reform can cause major losses in the domestic market and many laws of healthcare are not yet in implementation and the result of this will continue thru 2014 and so, Merck should start expanding globally beyond its current footprint and should focus on generic drugs as a majority of the emerging markets prefer inexpensive drugs compared to branded expensive drugs.The savings here are double-edged as we minimize the effect of healthcare reform oriented costs and we expand globally and earn more before competition takes over. The potential savings by this strategy is estimated to be a minimum of $4billion in the next one year considering we have a good presence in many established and emerging markets. * S7T2: Merck should start implementing a pharmacy management program by working closely with physicians and customers to deliver a one-of-a-kind integrated specialty pharmacy in every national segment that is part of Merck's client advisory board.This pharmacy management program specifically targets specialty medications for a number of chronic conditions and helps them better understand their condition, medication side effects, and the importance of adherence. WO Strategies: * W2O6O5W7: Singuliar is a branded product of Merck the patent of which is going to expire in 2012 and Merck should equip itself by penetrating into the generic drugs market that will substitute Singuliar and Merck should rapidly expand in emerging markets and focus on improving in existing markets to position itself better for the post patent expiration loss of sale. W3O4: FDA's denial of products in research and development can setback the product development lifecycle timeline during which competition can catch up and release their own branded or generic drug and so Merck should expand its research and innovation to adopt latest technologies for quicker innovation and also use joint ventures or partners or possible acquisitions to quickly supplement its lacunae in the research areas and thereby position itself for success. WT Strategies: * T1W2: More than six of Merck's patents are expiring in the near term.The additional capacity realized upon the cessation of Singuliar manufacturing should be used for high potential drugs which will face limited competition. The high potential drugs in the pipeline approved by FDA sho uld be made ready for use for the additional capacity. * W3T3: The current recession caused by multiple problems can hit Merck's profitability and the failure of FDA approvals can cause further sunk losses in the research and development area. Merck should look into outsourcing research and development to places where it is inexpensive for research.Grand Strategy Matrix The extensive analysis of Merck suggests the first quadrant of the Grand Strategy Matrix. Merck is in a good long term strategy and should continue to pursue its strategic plans and the recommended strategies. Recommended Strategies Recommended strategy No. 1: Healthcare reform emphasizes a paradigm shift to generic drugs from branded drugs in an effort to save money for the consumers and to eliminate undue profits for the healthcare or pharma industries. 7% of the patented drugs are going to expire by 2015 and this is an opportunity of $142 billion and there are not a lot of market players in this segment yet. Merck can take advantage of this upcoming situation and start working on generic drugs in the pipeline to be released in the established and emerging markets. We believe Merck should be able to tap into at least $50billion by this strategy over the next five years with an immediate return of $15billion in the upcoming fiscal year.More research and development can be leveraged by outsourcing research and development into areas where it’s more productive for the investment. A more detailed vision of this strategy in monetary terms is presented in the next section to give the audience a perspective of how this strategy is beneficial in making Merck the number one in the industry with sustainable prosperity laying the foundation to diversify into pharmacy management program in light of the healthcare reform. Recommended strategy No. 2:Merck should start implementing a pharmacy management program by working closely with physicians and customers to deliver a one-of-a-kind integrated spe cialty pharmacy in every national segment that is part of Merck's client advisory board. This pharmacy management program specifically targets specialty medications for a number of chronic conditions and helps them better understand their condition, medication side effects, and the importance of adherence. More research and development is suggested in areas that Merck can improve upon and the excess capacity that will be obtained after Singular should be used for pipeline products.This will position Merck as a differentiator in not just health but the health and wellness industry and will form a close nexus with physicians and customers while pursuing research in the most needed areas to improve life and wellbeing as visualized in the revised mission. Projected Financial Statements Projected Income Statement| | | | | 2010| 2011| | Revenue| 45,987. 00| 62832| Around $17 bln increase due to new strategies| COGS| 18,396. 00| 21991. 2| 35% of revenue| Gross Profit| 27,591. 00| 40840. 8| | | | | | Operating Expenses $Mil| | | | SG&A| 13,245. 00| 15708| 25% of sales | R&D| 10,991. 0| 13991| allocated $3 billion more| Other| 985| 985| | Pharmacy Management| | 200| | New Market Development expense| | 300| | Operating Income| 2,370. 00| 9656. 8| | Other Income and Expense $Mil| | | | Net Int Inc & Other| -717| -717| | Earnings Before Taxes| 1,653. 00| 8939. 8| | Income Taxes| 671| 3575. 92| 40% tax| Earnings After Taxes| 982| 5543. 88| | Acctg Changes| —| | | Disc Operations| —| | | Ext Items| -123| -123| | Net Income| 859| 5420. 88| | Diluted EPS, Cont Ops$| 0. 28| 0. 37| | Diluted EPS$| 0. 28| 0. 37| | Shares| 3,120. 00| 3208| | | | | | Project Balance Statement| | | |Assets $Mil| | | | | 2010| 2011| | Cash and Equiv| 10,900. 00| 11500| | Short-Term Investments| 1,301. 00| 1320| | Accts Rec| 7,344. 00| 11016| 50% increase| Inventory| 5,868. 00| 7335| 25% increase| Other Current Assets| 3,651. 00| 4250| | Total Current Assets| 29,064. 00| 354 21| | Net PP&E| 17,082. 00| 19555| | Intangibles| 51,834. 00| 52544| | Other Long-Term Assets| 7,801. 00| 8022| | Total Assets| 105,781. 00| 150963| | | | | | Liabilities and Stockholders' Equity $Mil| | | | | 2010| 2011| | Accts Payable| 2,308. 00| 2828| | Short-Term Debt| 2,400. 00| 2605| | Taxes Payable| 1,243. 0| 1300| | Accrued Liabilities| 8,514. 00| 8914| | Other Short-Term Liabilities| 1,176. 00| 1220| | Total Current Liabilities| 15,641. 00| 16867| | Long-Term Debt| 15,482. 00| 18282| | Other Long-Term Liabilities| 20,282. 00| 30455| | Total Liabilities| 51,405. 00| 55604| | Total Equity| 54,376. 00| 85359| | Total Liabilities ;amp; Equity| 105,781. 00| 150963| | Projected Ratios | 2010| 2011| Debt/Equity Ratio| 0. 28| 0. 65| Return on Assets| 0. 79| 3. 59| Net Profit margin| 1. 87| 8. 6| EPS| . 28| 1. 49| Company worth Analysis Net Worth Analysis |   | |   | Stockholders Equity| $66,754,000,000 |Net Income x 5| $4,295,000,000 | (Share Price/EPS) x Net Income| $104, 429,857,143 | Number of Shares Outstanding x Share Price| $104,948,066,926 | Method Average| $70,106,731,017 | Annual Objectives: * A projected increase in sales of $18bn is to be expected for 2011 and reduction of Singuliar sales will be $3bn resulting in $15bn. * An additional expense of $3bn for research and development is assumed for 2011 as part of recommendation 2. * A new category of expenses called â€Å"Pharmacy management expenses† will appear in statement for the amortization expenses of the start up of pharmacy management. A spike in interest of $200mn should be planned for due to the loan required for pharmacy management. * The pharmacy management program is expected to yield $2bn in profits in the first year. * New market development expenses should be planned for $300mn. * Merck should plan on generating equity to the tune of $30bn in the year 2011 to meet the expenses related to increased sales. Strategic Review and Evaluation Procedures: * At the end of the y ear, Merck should compare the stated objectives with the actual data.A re-evaluation of IFE and EFE should be implemented and should be checked for variance against the current IFE and EFE. * If no major variance is observed, the same strategies can be continued thru the following year. At the same time, if the result of these strategies position Merck in a better place, few more aggressive quadrant strategies should be evaluated and considered at that moment. * In the case of a situation where a wide variance is observed from the planned strategies, corrective actions are recommended after careful evaluation of factors from all relevant dimensions to check the main cause/s of the variance.A revised vision, mission and objectives may be needed at that moment in light of the new changes in external and internal factors. * We would also like to recommend usage of a balanced scorecard to evaluate the firm from multiple dimensions and ensure the overall progress of the firm follows the trajectory. * Key performance indicators should be evaluated from time to time internally against the plans or annual objectives and with industry standards for averages to identify any needed changes to the strategy.