Erlangga Eka N.13/360604/PEK/19102Henryawan Aditya Pradipto13/360607/PEK/19105Hizbullah Hadikusumandari13/360608/PEK/19106I Gede Nandya13/360609/PEK/19107CIBA-GEIGY MERGER WITH SANDOZCorporate Strategy Case 17.2

Merger History Timeline

Merger History Ciba-Geigy

Merger History Sandoz

Merger HistoryWorlds 2th-largest drug-maker after Glaxo WellcomeHad 4,4% international market shareFocus on healthcare agribusiness, and nutritionWorlds 14th-largest drug-maker in 1996Had 2,1% international market shareHeld 55% shares of NovartisWorlds 9th-largest drug-maker in 1996Had 2,3% international market shareHeld 45% shares of Novartis

Merger Strategic ReasonsCreate More Powerful Bargaining Power

What were the individual strengths and weaknesses of Sandoz and Ciba-Geigy?

High research capabilities and modern marketing systemHigh economic of scale and scope of economic on manufacturing facility.Strong position on agriculture and petrochemicalBrand name harmed due to the legal case of CIBAs Clioquinol in JapanDiscovery of unethical way on chemical Galecron testing

What were the individual strengths and weaknesses of Sandoz and Ciba-Geigy?

Best known for its nutrition product such as Gerber baby foods, Ovaltine, and Wasa crispbreadsHigh research investment in genetic fieldStrong performance in emerging marketsThough had invested heavily in gene research, but newly developed products were still years awayResponsible for a notorious chemical disaster in Rhine River

How would the merger help each company?Merger give more possibility to innovate in research and development, such as biotechnology.

More efficient marketing and broader distribution products.

How would the merger help each company?Leaner organizational structure make organizational efficiency and find competent employees

Merger make Financial strength

How would the merger help each company?Lower cost of financing, increased liquidity

Combine product lines and make more sales

What was the expected future strategic focus of Novartis, and why?Focused diversification

Innovative pharmaceuticalsDifferentiated genericsPreventing infectious diseaseEye careSelf-care products

What was the expected future strategic focus of Novartis, and why?Getting drugs to patients faster

Broad use of computer modeling and simulationEconomics of innovation

What was the expected future strategic focus of Novartis, and why?Extending lead in innovationScience-based innovation is at the heart of Novartis. Follow a distinct research and clinical approach to build an industry-leading pipeline of differentiated medicines and treatments with the goal of delivering real-world benefits to patients and healthcare providers.Accelerating growthpursuing long-term growth by maximizing product launches and leveraging its robust portfolio. Expanding in established and emerging markets and adapting our commercial model to the rapidly changing healthcare environment.

What was the expected future strategic focus of Novartis, and why?Driving productivityNovartis is driving productivity by simplifying its processes, accelerating cross-divisional collaboration, and improving global procurement and supply chain management. We are using rigorous resource allocation to improve cash management and profitability.

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