Case Study Essay Example | Topics and Well Written Essays - 1000 words - 6

Case Study - Essay Example The case study notes that a European manufacturer has approach the company to make a strategic partnership with the company which shows that some companies think that Morepen is ripe for taking a taking a stake in if not an outright takeover. The share price of Morepen shows a downward trend which means that investor confidence in the company has been eroding over the past few months. However, the firm shows healthy profit after tax figures which means that there could be some room for experimentation but not enough for the firm to engage in highly risky behavior. There is a substantial risk involved in the pharmaceutical business as noted by the case study since the behavior of other companies can lead to improved drugs coming to the market which can make older drugs obsolete. Morepen does not appear to have enough funds to conduct its own research and development into new drugs therefore sticking to generic drugs has led to the early success of the company. However, if Morepen wishes to remain competitive in the market with regard to other companies who are developing new drugs; it may have to make significant investments in research towards creating successful new drugs or improve upon older drugs. Luckily, since the company is located in India, the development cost of a new drug is substantially lower therefore it is possible that they can create drugs which let them remain competitive and avoid any attempts for takeovers. While the American and European markets remain lucrative for the company, the home market brings the bulk of their income and they can also focus on brining improvements to the home market drugs for a greater competitive advantage. It must be noted that all the recommendations which can be given to the company come with a high element of risk since the decisions are not easily reversible and the investment