ations, including use in water treatment, manufacturing of paper, oil field drilling, food processing, skin care, wound management, biodecontamination as well as pharmaceuticals. It is possible that Merck hoped to take advantage of some economies of symbiotic relationships through its 1980s acquisitions.
Along with acquisitions, the company also divested several interests, including its interest in Torii and Company and its subsidiaries in South Africa and Lebanon. These two nations were characterized by highly unstable environments in the late 1980s when the divestments took place, and it is likely that Merck felt it could no longer adequately protect either its employees or its investments in these countries. The company continues to operate plants throughout the world, including in Europe, Asia, Central America and Australia.
Within the pharmaceutical industry, Merck competes with Glaxo Pharmaceuticals (a British-based company) and Burroughs. Both of these companies are also quite large, and both have international operations. The international manufacture and distribution system that Merck has acquired through its merger and acquisition strategy is a way for it to effectively compete against other global giants in the pharmaceuticals industry.
The industry as a whole is characterized by a large research and development investment that is often not returned in profits on any one drug. Companies can spend large amounts of money researching and bringing a product to the testing stage, only to have it not approved by government agencies in one of the larger markets. The American market and the Federal Drug Administration (FDA) enforce particularly rigorous product testing standards, with the result that the product development cycle can be significant for new products, and of the many products that may have research done on them, only a few are ever marketed in the United States, which is the most lucrative of the nation...