A multinational company is business firm which operates in a different countries in the world, however, the management is based in a home country where all corporate strategies and decisions are routed and directed. 2. Pros and Cons of N-Pharma being a multi-cultural organization One advantage of N-Pharma as a multi-cultural organization is its broader scope of market which enables the company to expand in different countries. As a multi-cultural company, there is a diverse workforce working towards achieving the corporate goals which enhance the creativity in formulating strategies and the understanding of the company’s target market.
With the help of a multicultural workforce, the company’s home/headquarters can clearly identify and define the problems and conflicts that arise in each country. On the other hand, the disadvantage of a multicultural organization is the conflicts and clashes brought about by differences in norms, religions, beliefs, moral values and culture. Furthermore, a multicultural company needs to address all the diverse needs of each subsidiary. All managerial decisions and corporate strategies should be tailored fit base on the culture and values of the target market.
Hence, a multicultural company is faced with complex and complicated operations. 3. Pros and cons of a public company A
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Moreover, the company earns recognition because of the media exposure that comes with being a public company. However, a public company must be transparent and full disclosure must be observed for the investors. Periodic reports and company financial should be provided and published for the purpose of transparency which generates additional expenses for the company. Moreover, a public company is regulated by a government entity, which result to limited control of the board of directors in managing and running the corporation.
Lastly, a company is subject to the scrutiny of the public and privacy of operations and strategies is often a problem. 4. Roles of culture and globalization on N-Pharma Culture and globalization play crucial roles in the expansion of N-Pharma. All managerial and corporate issues must be evaluated and decided on based on the culture of the target market or employees of the subsidiaries. The diversity of culture of N-Pharma’s subsidiaries require thorough and extensive evaluation and scrutiny.
Without the understanding of the culture, N-Pharma will experience difficulties in identifying solutions to corporate conflicts and problems. Globalization is important for N-Pharma. With its remarkable growth, there is no way to go but to capture the global market. If the company opted to stay in its home country then there will be no room for expansion and diversification. Globalization offers opportunities and chances for growth and expansion. Marketing – Product Development and Production 1. Why does N-Pharma need to continue spending money on product development and/or research and development?
Like most pharmaceutical companies, N-Pharma needs to spend on product development and/or research and development to stay in the business. The needs, wants and preferences of the market evolves as time goes by. New diseases are discovered so the need for new medicines arise. N-Pharma needs to address these demands for new medicines to ensure its corporate growth and to cope up with the stiff competition in the pharmaceutical industry. Moreover, the discovery of new drugs can contribute to competitive advantage, business growth and profits. 2.
How long does it take for an average new drug to make it to the market? An average new drug takes about 17 years before it reaches the market. The discovery and development of drugs is the most crucial and time consuming phase in the launch of a new medicine which is technically the longest as compared to other industries because of the rigorous and comprehensive testing of the safety of the drugs for human use. 3. What is cost-based pricing? How is market based pricing different? Should N-Pharma be using a cost-based pricing system to determine pricing on new drugs?
Cost-based pricing is a pricing strategy which is formulated based on the expenses incurred in producing the products and if the cost of raw materials and production increases, the price of the product must also increase to cover all the manufacturing cost and mark-up. Market-based pricing, on the other hand, is based on the competitors’ price, prevailing market price and customers’ buying power. A company normally enforce a market-based pricing strategy to gain a better market share and to reach its target market. N-Pharma should use cost-based pricing to cover the expenses incurred in research and development of its drugs.
However, this is disavantageous on the company’s part if the competitors come up with alternative products or generic drugs which cater the same market at a lower price. 4. Define and discuss the significance of branding to N-Pharma? How does branding impact pricing decisions? Branding has played a significant role in the business growth of N-Pharma. With its price relatively higher than the competitors’, the company has established an image of quality and safety. If the company continues to sustain this kind of image, it can effectively offer a premium price for its products.
However, with the incidents that happened, the company is in the middle of protecting and sustaining the brand which was established through the years. ACCOUNTS & FINANCE 1. Explain how it can be that N-Pharma has “large financial reserves”, but its US subsidiary has a “liquidity” problem. N-Pharma has earned from the launch Pharmax and other drugs that did well in the market and as a multinational company, its home country has gathered reserves for future use in case of liquidity problems like the one encountered by the US subsidiary. 2.
What are some possible sources of “short term capital” for N-Pharma? Some possible sources of short term capital for N-Pharma are short-term financial loans or debts and financial reserves which are the emerge options. Moreover, the company can sell shares of stocks to facilitate the need for short-term capital. 3. Draw as many conclusions about the company from the information in Appendix 2 as you possibly can. In Appendix 2, the US subsidiary clearly is in financial trouble. The US subsidiary is experiencing liquidity problems and the short-term borrowing from the home country has doubled.
Moreover, the debts have increased by almost 13%. Based on this datum, it can be concluded that the US subsidiary is financially unstable as of 2009. 4. Can you create any “final accounts” based on the information provided? Based on the information provided, we cannot create final accounts because of the incomplete information to calculate the gross profit and net income. STRATEGY & GROWTH 1. Why is N-Pharma concerned about being the target of a takeover? What might the company do to prevent such an action?
N-Pharma is a public corporation and it is vulnearble for take over because of the decline of the shares of stock due to the bad press caused by the testing of drugs to animals. In one week, the company’s share of stocks dropped by 25%. In lieu of this threat, Yukio, formulated strategies for the future growth of the company which includes market development in Europe, market penetration in China and diversification. 2. Which strategy do you favor? Why? Diversification to the animal welfare will be a good option for the company. This would increase the market that the company will serve.
Moreover, the veterinary market is growing. Although a merger might be needed to sustain this strategy, this can be regarded as an opportunity for growth. 3. What about the ability to control the production process (quality) in China? Is this a noteworthy concern? How might you address it? Yes. The issues of loose quality control in China is a very important aspect to be considered. N-Pharma is known for its quality and if products manufactured from China are viewed as low in qulaity, the company must adapt a comprehensive quality control process for China in case the company will penetrate the China market.
4. What are the risks/benefits of a merger with Anigam? For Anigam? For N-Pharma? Do you recommend the company consider this strategy? I recommend this strategy for consideration since the merger with Anigam would mean business growth for N-Pharma. The risks that comes with the merger are the business reforms, cultural clashes and span of control on both sides. However, it should be noted that although Asia, it is known in US and Europe. With the problems in the US subsidiary and the need to expand in Europe, the merger might be a good opportunity for the company to be globally competitive.
HUMAN RESOURCES IN A MULTINATIONAL CORPORATION 1. How might management overcome the culturally based problems? Mangement can overcome culturally-based problems by properly addressing cultural differences within the organization. Although such cannot be totally prevented, the company can minimize it by conducting a study on the culture, behavior and norms of each country where a subsidiary plans to operate. 2. Is cultural diversity good or bad for business? Cultural diversity can be both good and bad for business.
It can be good because with a culturally diversified workforce, the company can ensure creativity and identify the cultural preferences and restrictions of the market. It can also be bad because it can cause conflicts within the organization. Each strategy must be tailored fit for each cultural segment. Identifying such can be costly. 3. What are some indicators of poor morale at work? Some indicators of poor morale at work are the decline in the work performance, absenteeism, poor punctuality, work-related conflicts, employee turnover and unmet deadlines.
4. Discuss how the problems of Laura Davies in Australia differ from her counterpart’s in Canada? The problems encountered by Laura Davies in Canada and Australia are different in terms of the preference, economic status and culture of the workforce. In Canada, the employees respond to financial incentives while in Australia, the workforce are more concerned with non-monetary incentives that would allow them to spend more time with their family since their standard of living is already high.