Introduction
Eli Lilly is a pharmaceutical company established in many countries across the world. Founded in the 19th centaury, the company has extensively expanded globally with a higher concentration of branch locations in Europe. With its headquarters in Indiana USA, the firm has a global total of almost 40, 000 employees with almost 8, 000 involved in research activities. The company has also developed specialized facilities like centers for drug manufacturing, centers for research and developments and centers for research on clinical matters.
With thirty two years of existence record, Eli Lilly currently serves up to one hundred and forty three countries around the world. This paper seeks to discuss the company Eli Lilly as a company that operates in the United States of America as well as in other nations and states around the world (Aarkstore, 2011). The paper will discuss subjects related to history, operating results, and forces affecting the company. It will as well cover the analysis of strength, weaknesses, threats and opportunities of the firm as well the factors that will be needed for analysis and planning of the firm’s future operations.
The Eli Lilly Company
The company Eli Lilly, which is research based, was established in the year 1876 by a man called Eli Lilly. The American civil war veteran who was also a chemist in the pharmaceuticals field was not impressed by the poor quality of medicines of the time. Ely therefore dedicated his life to finding a solution to this by establishing a company that would produce high quality drugs that would only be sold out under physicians’ directives. The company works on the philosophy “my employees, my core assets” (Lilly, 2011, p. 1). This could be one of its motivations to success that has seen the firm produced a variety of medicines over the past years (Lilly, 2011).
As indicated above, the Company has been and is still operating in the field of research and manufacture of pharmaceuticals. This has led to establishment and developments of specialized centers for “Clinical research, Research and development and Manufacturing plants” (Lilly, 2011, p. 1). This has led to the production of drugs such as “axiron, livalo, adcirc and efient” (Lilly, 2011, p. 1) since 2009. There are also other medicines produced by the firm in earlier years.
The large number of employees 38, 350 also implies the firm’s large scale operations. Besides its research and manufacturing duties, Lilly also conducts operations in programs like community developments, charity and grants awards. Financial accounts also indicate a positive trend in the profitability of the firm. Its income, net profit and earnings per share considered from 2010 have been steadily increasing as depicted in the reports in the firm’s website (Lilly, 2011).
Challenges
In spite of the global extensiveness of Eli Lilly foundation, it faces with challenges both in Indiana as well as internationally. These challenges are more or less the same at both levels of operations. The negative forces can however be seen from three perspectives namely: “social, political and economical” (Lilly, 2011, p. 1).
Political challenges
Political forces could range from changes in political landscape like changes in a government’s economic policies for instance financing of domestic firms that lead to unhealthy competition. Formation of regional blocks like the European Union, United Arab Emirates and ECOWAS in Africa can also hinder penetration of a firm into a given market. Poor government policies like expelling aliens from a country as witnessed in Zimbabwe and Uganda (in Africa) in earlier years is a setback to all international companies including Lilly (Burke et al., 2007).
Economical Challenges
The economic forces include unhealthy competitions in the medical sector. This may range from lowly priced low quality drugs from substandard producers and the “black market”. Economic constraints are also experienced when other firms evade taxes through influence of some powerful government and political leaders giving them advantage to make profits at relatively lower prices. The nature of national economy of the regions of operation of Lilly is another force in its operation as it dictates profitability in terms of production cost.
Demographic Changes
Demographic changes on the other hand are social forces that directly contribute to a firm’s revenue. Together with factors like price fluctuations of complementary and supplementary drugs and goods among others, these factors influence either negatively or positively on the revenue hence profitability of the firm Lilly (Burke et al., 2007).
SWOT Analysis
The swot analysis of a company is a description of its strength, weaknesses, opportunities and threats.
Strengths
The strengths of Eli Lilly Company range from its size to its long time existence. Being a big multinational company with a wide market base, Lilly has the advantage of benefiting from large scale production that reduces production cost. This as well helps it to manipulate its prices in different countries and regions to fit their economic demands while maintaining its profitability, that is to say that it can maximize profit in one region and use that to offset a loss in a new market its trying to penetrate. Its establishment in long term research of over 100 years is also an aspect that attracts dedicated personnel in the fields. This ensures instilled determination on the parts of the employees leading to quality output. The track record of good medicines produced by the ELI Company has also enhanced its credibility in the markets thus sustaining its high sales.
Weaknesses
The company on the other hand has weaknesses. It is for instance difficult for it to detect counterfeit drugs on its brands especially in countries and regions in which it doesn’t have offices or even agents. The company is so large that it is possible for an employee to leak out important information, like tentative findings on a research, without the company being able to identify the leak source.
Opportunities
This firm still has opportunity in expanding its market. This together with widening its range of products gives it a chance to increase its sales hence profits.
Threats
Eli Lilly is established in its field, however, it should not be ruled that it faces no competition from other competitors. International companies like Bayer which has been in operations for as long as Eli Lily poses threats to the company. Globalization is changing commerce and more and more drugs are finding their way to the US market.
What should be done?
As has been the culture in every developed business entity, Eli Lilly should carry out continuous research and analysis into its operations. Research especially on sustainability, expansion and even overcoming competitions is critical in helping the firm predict, plan and strategically position itself to further success. According to Napier (2006), the firm should improve its research and analysis factor a business like “marketing ideas, scalability, entry into electronic market and adaptability to change” (Napier, 2006, p. 1). Factors like “operations, finances and long term objectives” (Kleiner and Abrams, 2003, p. 1) should also be considered.
Conclusion
The Eli Lilly and company is a multinational pharmaceutical company that was established by Eli Lilly to mitigate production of quality medicines. The drug manufacturing firm has developed globally and has specialized centers for its operations. It is however still being faced with setbacks affected by politics, economies and even social characteristics in the various regions of operations. The swot analysis of the firm indicates an averagely placed company with options to either improve or fail the company.
References
Aarkstore, J. (2011). Eli Lilly and company-Swot analysis. Article Snatch. Web.
Burke, G., Clarke, L., Burrow, P and Molian, D. (2007). Growing Your Business: A Handbook for Ambitious Owner-Managers. New York, NY: Taylor & Francis.
Kleiner, E and Abrams, R. (2003). The successful business plan: secrets & strategies. Carlifonia, CA: The Planning Shop.
Lilly. (2011). Lilly. Lily Company. Web.
Napier, A. (2006). Creating a winning E-business. New York, NY: Cengage Learning.