AlthoughBMS is considered as one of the strongest companies in terms offinancial performance in the pharmaceutical industry, there are threerecommendations that can help it address its current weaknesses.First, the management needs to increase the amount of resources thatare allocated for research and development projects that are startedwith the objective of bringing new products into the market. It isevident that the management of BSM invested $ 3.7 billion and $ 4.5billion in research and development in 2013 and 2014, respectively,but the issue of expiring of patents is a major concern for thecompany (Bristol- Myers Squibb, 2014). This implies that the newresearch projects should be directed towards the development of newdrugs to offset losses that are incurred after expiring of patents.
Secondly,BMS needs to establish strong partnerships and collaborations withcompanies within the health care sector, which will help it bridgethe gap between the manufacturer and consumers. From this case study,some of the key challenges that the company has faced in the pastinclude the lack of capacity to increase accessibility of its drugsand a number of key sellers who are getting off the patent (School,2002). By allowing these challenges to continue, BSM will recordlosses due to a decline in sales. The second recommendation willmitigate this problem by ensuring that the new partners andcollaborators take the drugs to the consumer, which will translate toan increase in sales and profits.
Third,BSM should establish an internal investment committee in order toreduce the risk of making decisions that lead to financial losses.One of the key factors that resulted in a 3 % decrease in revenue inthe financial year 2014 is a divesture of the diabetes business line(Bristol- Myers Squibb, 2014). The establishment of an investmentcommittee will help the company to analyze the pros and cons of everyinvestment or divestment decision before implementing it.
Theimplementation plan for the aforementioned recommendations will becomprised of five steps. The first step is the communication andengagement of the stakeholders. During this stage, BSM’s managementwill inform the stakeholders (including employees) about the decisionto redirect the research efforts as well as resources towards thediscovery of new drugs, establishment of fruitful and reliablepartnerships, and an investment committee. The engagement processwill give the stakeholders an opportunity to make their contributionstowards the implementation of the recommendations (Rajablu,Marthandan & Yusoff, 2015).
Thesecond step will involve the selection of metrics that will be usedto measure the success of the recommendations. For example, thesuccessful progress in research and development will be measured bydetermining the number of new drugs that are launched over a givenperiod versus those whose patents will have expired within the sameduration. The successful establishment of the partnership will bemeasured by the change in the sales volume over a given period. Theestablishment of an effective investment committee will be measuredby determining the contribution of every decision made towards anincrease in the company’s profitability and revenue.
Thethird step will involve the assignment of roles and responsibilitiesto individuals and groups that will oversee the implementation of therecommendations. The top management of the company will collaboratewith the human resource management department to determineindividuals as well as groups that will facilitate the implementationof the recommendations.
Inthe fourth step, individuals and groups assigned the duty ofimplementing the recommendations will put the plans into action. Thiswill involve the actual implementation of the decisions.
Thelast step will involve the evaluation of the success of theimplementation of the recommendations. In this step, BSM will use themetrics outlined in the second step to determine whether the desiredresults are achieved.
Bristol-MyersSquibb (2014). Bristol-MyersSquibb 2014 Annual Report.Retrieved from:http://s2.q4cdn.com/139948097/files/doc_financials/annual%202014/BMS-2014-Annual-Report.pdf
Rajablu,M., Marthandan, G. & Yusoff, W. (2015). Managing forstakeholders: The role of stakeholder-based management in projectsuccess. AsianSocial Science,11 (3), 111-125.
School,Wharton. "Bristol-Myers Squibb Illustrates Woes of AilingPharmaceutical Industry." [email protected].N.p., 17 July 2002. Web. 09 Mar. 2017.