Type: Business
Pages: 6 | Words: 1689
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Merck & Co., Inc. is among the best and largest pharmaceutical companies operating globally. The company’s headquarters is situated in Whitehouse Station, New Jersey (Merck | Company Structure Information from ICIS, n.d.). The firm began as a Germany’s Merck KGaA subsidiary. In 1891, it  was established in the US. During the First World War, Merck & Co. was confiscated by the US government and hence became an independent American company. Merck & Co., Inc. is the seventh largest pharmaceutical company in the world with regard to market capitalization and revenues (Merck | Company Structure Information from ICIS, n.d.). Merck & Co., Inc. is a global research-driven pharmaceutical company that has its policies anchored on discovering, nurturing, producing and marketing a wide variety of innovative commodities that are aimed at improving human and animal health.

The company values are based on helping those who are in need since company focuses on developing new therapies for treating and preventing diseases (Merck, n.d). Thus, they are committed to improving global well-being and health. The company is anchored on the tenets of becoming the best global healthcare company. Similarly, Merck’s mission is to provide innovative, distinctive products and services aimed at saving and improving lives, safety for customer needs along with being recognized as the best place to work (Merck, n.d.).

The company’s main goal is to take the lead to the healthier future. The company’s products improve human lives and their well being around the world. The company operates on core values of openness, honesty and upholding the highest degree of ethics and integrity. This is achieved by the company making sure that they comply with all legal regulations across the world. Further, Merck & Co. continuously reinforce their commitment to globally accepted ethical business practices and behavior on each level of the company through the  ethics office and  code of conduct (Merck, n.d.). Lastly, the company has managed to achieve high ethical and integrity standards through safeguarding personal privacy aspirations by using the company’s global privacy program.

Merck & Co. roots can be traced back to Friedrich Jacob Merck, a tradesman who purchased a drug store in Darmstadt, Germany in the mid 17th century. In 1816, Emanuel Merck acquired the store. Emmanuel and his successors gradually transformed the store into a chemical-pharmaceutical factory that manufactured pharmaceutical materials. George Merck immigrated to the US in 1891 and established Merck & Co. in New York as a subsidiary of the family partnership.

The company was confiscated by the US government in 1917. The firm was then re-established and declared as an independent American company. In 1953, Merck and Sharp & Dohme, Inc., merged and became the US’s largest drug producer and leaders in chemical research and manufacturing (Merck, n.d.). By November 2009, Merck & Co. had approximately 51,000 employees in 120 countries together with 31 factories globally. As already mentioned, the company is one of the seven largest pharmaceutical companies in the world.


Socio-Cultural Forces

These factors comprise of demographic and cultural aspects of the external macro environment which largely affect consumer needs and the size of potential market. These factors may include population increase, health awareness, age division, carrier attitudes and the emphasis on safety.  The company’s principal goal is to preserve and improve human life and animal health. The primary customers of Merck & Co. are the patients and physicians. These customers perceive the company in terms of its commitment to improving human health and well being. The promotional communications of drugs have a description of usage and dosage recommendations. Additionally, company gives medical textbooks to physicians which automatically serve as occasional educational and practice related gifts.

The company is essentially committed to success. Merck depends on skills, honesty, knowledge, imagination, flexibility, diversity, and teamwork of employees to accomplish their mandate. The company has created a working environment that encourages mutual respect, collaboration and encouragement. This environment rewards commitment and performance and also is responsive to employee needs. This has enabled the firm to attract talented employees and to attain its global position in the pharmaceutical industry. The culture that promotes trust and respect contributes towards a productive work environment at the firm.

The company values and standards are deeply rooted in the company’s code of conduct and various policies of the firm. For example, Merck’s main goal is to provide innovative, distinctive products and services that promote community progress. The firm’s corporate social responsibility actions are directed by the principle of “helping the World Be Well” (Merck, n.d.). The firm offers its services to both local and international community by supporting various programs that are aimed at improving people’s health and encouraging environmental sustainability (Kaufman, 2005). Philanthropy and community investment is one of essential components through which company benefits the society. Through the Merck Company Foundation, it makes direct cash donations, products and services to qualified organizations that address community needs. The firm contributes to the community by providing access and improving capacity for quality healthcare, emphasizing and encouraging science education and educational opportunities, and supporting the needs of Merck’s community.

The company was involved in unethical behavior after the Vioxx drug was licensed in the US. For instance, the company sued doctors who were critical to the Vioxx. They also intimidated researchers and impingement upon academic freedom (Kaufman, 2005). Later, through extensive studies, the Vioxx was found to be harmful to human health as it was found to increase risks of heart attack.

Social cost of profit is principally the social impact that a specific project or government policy will have. Social cost benefits can be applied to both public and private investments. In case of a private investment, social cost of profit analysis is vital because any investment must be monitored and sanctioned by the government.

Technological Forces

The improvement in technology has reduced the minimum efficient production levels of the company while also influencing the outsourcing decisions in addition to creating new business prospects for the firm (Drug company Merck to cut 1 jobs in 10 in Germany, 2012). The immense research and development at the firm has enabled the company to offer innovative and competitive products. The use of the Intranet and Internet has enhanced communication within the company and between different company entities across the world. Procurement and logistics operations have been improved through technology, thus they have been made more efficient.

Political and Legal Forces

Politics and political parties across the world are the main components that influence heavily business operations of any company. Merck & Co. is one company that does not unfairly or illegally influence political processes with the countries that they operate in. However, with the approval of the company’s General Counsel, the company may participate in the political process by sponsoring parties and candidates of their choice. Merck’s political spending always reflects the company’s interest and not personal or individual interest of its directors or officers (Drug company Merck to cut 1 jobs in 10 in Germany, 2012). Nevertheless, the political contributions are founded on the following principles: enhancing patient access to health care, comprising of access to vaccines, medicines. It is imperative to note that Merck does not sponsor or make a political contribution to any candidate running for a State Supreme Court or any other judicial office (Drug company Merck to cut 1 jobs in 10 in Germany, 2012).

Through the company’s political contribution together with payments to trade associations as well as other tax-exempt organization are at times used for lobbying and political activities made by the company’s board of directors. Consequently, the company’s board committee on public policy and social responsibility periodically reviews the practices and policies of the corporate political contribution program (Drug company Merck to cut 1 jobs in 10 in Germany, 2012). Merck & Co. is a member to Political action committee (PAC). It has been involved in numerous lawsuits including the Vioxx saga, which cost the company an enormous sum of money to settle thousands of lawsuits filed by different people. The Vioxx cases resulted into the creation of different laws to safeguard consumers and pharmaceutical companies (Merck, n.d.). The US Health Care Laws were formulated in order to guard the industry from acts of health care fraud.

Economic Forces

There are several economic factors that have impacted Merck & Co. in the US and across the world. For instance, the universal efforts to contain healthcare costs have immensely exerted pressure on the company’s product pricing and market access. Consequently, various governments have continually pressured the company to reduce the prices of medicines and vaccines for which they pay for. The economic sanctions to countries like Cuba and Sudan have restrained the company’s power to penetrate the large markets that have not been explored in these countries. The austerity measures in European countries which also included price control on both patented and generic drugs have negatively impacted the company’s revenue performance, thus reducing its economic value. Additionally, the global economic downturn coupled with sovereign debts in various European countries has adversely affected the company’s foreign receivables (Solomon, 2009). The global pressure with regard to competition, the industry regulations together with costs containment efforts have generally negatively impacted the company’s economic strength.

The company has massive economic power, for instance by the end of 2011, the company’s total assets were valued at US$105.128 billion, 86000 employees, its revenue was US$48.047 billion, operating income US$ 7.334 billion, net income US$ 6.272 billion and its total equity was US $ 56.943 billion . The company uses this economic power investing in new research, innovations, and expanding its operations into new regions that they have not yet penetrated.


Merck & Co., Inc. is a global company that has inclined its operations to improving lives and well being of people. The company’s operations are guided by strong values that uphold the integrity and accountability. The company consumers are patients, physicians, wholesalers, distributors and retailers. Merck & Co. has a conducive working environment that rewards performance and encourages employees to work extra hard. The technological improvements have enhanced communication within the company and its different entities across the world. The company contributes rather sponsors political parties and candidates of their choice. The global economic downturn and austerity measures in various European countries have negatively impacted Merck’s operations.

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