THE UPJOHN COMPANY: A STRATEGIC ANALYSIS
This research analyzes the strategic situation at the Upjohn Company in mid-1995. The Upjohn Company is headquartered in Kalamazoo, Michigan. The company (1) manufactures pharmaceutical and agricultural products, and (2) provides health care services in both the United States and in foreign markets (Rho 1278). In mid-1995, the firm employs approximately 16,900 persons (down approximately 20 percent from five years earlier), and has approximately 46,620 stockholders. About 16 percent of the firm's outstanding common stock is closely held (down from approximately 30 percent five years earlier). The individuals primarily involved in the closely held shares are members of the Upjohn family.
In mid-1995, Upjohn, along with Merck and Lilly, is a leader in pharmaceutical research in the United States (Rho 1278). Research and development expenditures consume 18.2 percent of Upjohn's revenues (up approximately 30 percent from five years earlier).
Management Problem Identification
The pharmaceutical industry in the United States in mid-1995 generally is financially healthy (Rho 1250). Profitability projections for the companies competing within the industry, however, are mixed. The Upjohn Company, while profitable, is not experiencing profitability growth over the preceding year, and the company is beset with on-going legal liability actions lodged by consumers (Rho 1278).
Upjohn has traditionally sought and generally has been successful in attaining high product quality (Coghlan 4). Some of the company's products, however, have encountered problems with both the medical communities and governmental regulatory bodies in both the United States and some foreign countries ("Upjohn Halts" C4). The firm's problem in the areas of product quality and consumer liability, however, have been relatively minor in comparison to those experienced by some of its competitors (Jones 2-3). ...