This research examines Novartis AG, a multinational enterprise (MNE) headquartered in Switzerland. The focus of the examination is on the global operations of the company. The examination includes an economic, political, and legal assessment of the company's home country in relation to the risks and opportunities associated with an expansion of the company's participation in the Swiss economy.
Novartis AG: Organizational Assessment
Novartis AG is one of the world's largest pharmaceutical companies. Global sales for Novartis exceeded US$22 billion in the latest fiscal year report issued by the company for 2000 (Hoover's Online, 2001a).
Novartis operates in 140 countries. The largest concentrations of company operations, however, are in 17 countries. Other than its home country Switzerland, the remaining 16 countries are Argentina, Austria, Canada, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Mexico, Poland, Spain, Sweden, United Kingdom, and United States (Hoover's Online, 2001d).
Novartis has an expansion strategy that emphasizes both internal growth and the acquisition of competing firms for merger with Novartis. The trend toward mergers in the global pharmaceutical industry is significant. Larger companies are better able to reduce costs. The stronger position of larger firms also enables them to deal more effectively with managed-care organizations. Larger companies also generate the resources required to expand research and development budgets. Research and development is especially important in the global pharmaceutical industry. Equally important is the increasing necessity for global coverage in the launching of new drug products. Because (in the global environment) new drug products must be introduced simultaneously or nearly so in all markets, the costs of introducing these products is so great that only giant pharmaceutical companies have the resources to support such efforts (Lang...