Evaluation of The Structure and Strategies Used in Bristol-myers Squibb Pharmaceutical Company

Summary

This document consists of an overall business review for the Pharmaceutical company Bristol-Myers Squibb. Although by no means a complete summary of their 1998 business dealings or strategy, it does give a nice overview of three of the most component and fundamentally sound aspects of any business, let alone a Fortune 500 business.

This document starts by covering the Marketing aspect of Bristol-Myers Squibb. First covered is the most important structure of any company; its product. Inside is information on how they distribute their product, and where they distribute it to. Finally, we see how they promote their product, and which ways it is advertised.

Management is the next topic of discussion. What style of management does Bristol-Myers Squibb conduct? The document talks about compensation given to their employees, and how the average employee is rewarded for achieving the level of excellence.

Finally, the document focuses on Finance. It shows Bristol-Myers Squibb profits, it debts, how much money is invested in the company, and basically the direction that the Company is headed. Once again, this document is not nearly a complete breakdown of Bristol-Myers Squibb's 1998 business transactions. All this document is aiming for is to give an idea of the extreme complexity of the business world, understand(at least a little more) the strategy and competitiveness between companies, and maybe to enlighten a few on how much time and effort goes into such a giant of a company like this. Enjoy.

History of Bristol-Myers

In 1887 William McLaren Bristol and John Ripley Myers decided to sink $5,000 into a failing drug manufacturing firm called the Clinton Pharmaceutical Company, located in Clinton, New York. The company was officially incorporated on December 13, 1887, with William Bristol as president and John Myers as vice president. In May 1898 came a new name: Bristol, Myers Company (a hyphen replaced the original comma after Myers's death in 1899 when the company became a corporation).

The postwar depression prompted Bristol-Myers to jettison its ethical drug business and "devote itself entirely to its specialties": its two big winners and a dozen or so assorted toiletries, antiseptics and cough syrups. Company headquarters was established in Manhattan, where it has remained ever since. And having shifted squarely into the consumer products arena, Bristol-Myers began advertising its products directly to the public.

In 1924, gross profits topped $1 million for the first time in Bristol-Myers history. The company's products were on sale in 26 countries. At this point, the shares held by John Myers's heirs became available for sale, triggering a series of moves that turned Bristol-Myers into a publicly held company, listed on the New York Stock Exchange in 1929.

In 1943, Bristol-Myers bought Cheplin Biological Labs, and quickly entered into the field of antibiotics. During the war, Bristol-Myers was a major distributor of penicillin and other types of antibiotics. By the end of the war, it was clear that penicillin and other antibiotics represented an immense opportunity for the company. Cheplin was renamed Bristol Laboratories, and Frederic N. Schwartz was put in charge of it. In 1957 Schwartz was appointed president and chief executive officer of Bristol-Myers when Henry Bristol chose to shed some of his former responsibilities and become chairman of the board. Reviewing the company's situation and prospects, Schwartz and then treasurer Gavin K. MacBain -- later Schwartz's successor as CEO -- decided that Bristol-Myers should embark on a program of acquiring well-managed smaller companies. The two executives' first major move in that direction was to acquire Clairol.

Within a dozen or so years after Clairol joined the company, a number of other acquisitions followed, including those of Drackett, Mead Johnson, Zimmer and Westwood. In 1986 the company opened a state-of-the-art research complex in Wallingford, Connecticut, designed to house more than 800 scientists and support staff. In January 1994 Charles A. Heimbold, Jr., was elected chief executive officer. In 1995 Heimbold also became chairman.

In 1856 Edward Robinson Squibb founded a pharmaceutical company in Brooklyn, New York, dedicated to the production of consistently pure medicines, like ether and chloroform. In 1905 the company was sold to Lowell M. Palmer and Theodore Weicker, and the company became incorporated. That same year, land was purchased at New Brunswick, New Jersey, for establishment of an ether production plant.

In 1938 the Squibb Institute for Medical Research was established. In 1944 Squibb opened the largest penicillin production plant in the world: Building 59 in New Brunswick, New Jersey. In 1971 Squibb Corporation established worldwide headquarters and expanded facilities for the Squibb Institute in Princeton, New Jersey.

In 1989 Bristol-Myers merged with Squibb, buying them out for $12.7 billion dollars. This merger created a global leader in the health care industry. The merger created what was then the world's second-largest pharmaceutical enterprise. In 1990 the Bristol-Myers Squibb Pharmaceutical Research Institute was established with headquarters in Princeton.

Bristol-Myers Squibb provides services for people in need of Health products. Although Pharmaceuticals are their top grossing product, the breakdown can be seen as:

• Medicines
• Beauty Care
• Nutritionals
• Medical Devices

Bristol-Myers Squibb performs most of their sales in Medicines, approximately 69% of the gross income, or $12.7 billion. They specialize in mainly six types of prescription drugs, which are:

• Cardiovascular- Pravachol, Capoten, Monopril Anti-cancer- Taxol, Paraplatin, Vepesid Anti-infective-Zerit, Cefzil, Amikin
• Central nervous system- Buspar, Serzone, Stadol NS Analgesics- Execedrin, Bufferin
• Other- Comtrex(cold reliever), Dovonex(psoriasis), Keri(moisturizing body lotion)

Beauty Care is another aspect of Bristol-Myers Squibb. In 1998, Their Beauty Care department grossed $2.3 billion, or 12% of their total sales. Some products that are made by Bristol-Myers Squibb are:

• Clariol- Daily Defense, Herbal Essence
• Matrix Essentials-Salon Selective
• Nutritionals are Bristol-Myers Squibb's third largest department. This subsidiary of Bristol-Myers Squibb comprises 10% of their gross income, or $1.86 billion.
• Mead Johnson
• Nutritionals-Viactiv, Enfamil

Medical Devices is their last category. This division of the company accounts for 9% of their annual income, or $1.6 billion.

• Zimmer- Orthopedics
• ConvaTec- Ostomy care
• Place/Distribution

Bristol-Myers Squibb is an international company, with their world headquarters located in New York, New York. The headquarters for the company's segments are Listed as follows:

• Medicines world headquarters- Princeton, New Jersey
• Beauty Care- Stamford, Connecticut
• Nutritionals- Evansville, Indiana
• Medical Devices- Warsaw, Indiana and Skillman, New Jersey

Bristol-Myers Squibb manufactures products at forty-three major worldwide locations with a floor space of roughly 12,950,000 square feet. Forty-one are owned by Bristol-Myers Squibb and two are leased. The geographic location of the company is as follows:

Beauty Medical

The pharmaceutical products and the medical devices segments of Bristol-Myers Squibb are promoted on a national and international level in medical journals and directly to the medical profession. Also utilized is the "direct-to-consumer" advertising for a number of its products. Most other products made by Bristol-Myers Squibb are advertised on:

• Television
• Radio
• Print media
• Window and in-store displays
• Consumer offers

None of the segments is solely dependent upon one customer, or a few customers, so that the loss of a customer should not have a "material adverse effect" upon the segment.

Management/Human Resources

Bristol-Myers Squibb pertains to a centralized/pyramid management. A Board of Chairmen elect the officers of the company to serve out a term. The company is headed by a CEO, followed by a CFO, and so on. Assigned personnel are placed in individual aspects of the company and are put in charge of these divisions, only to answer to their superiors. Their international subsidiaries are maintained by appointed personnel who control their subsidiary, but also answer to a superior.

Training and Development

Training programs are conducted internally and externally throughout Bristol-Myers Squibb. Programs that are taught internally deal with competency, development, and coaching and feedback. Management programs taught internally are:

• Management Orientation-offers support, guidance, information, and opportunities to network and share with other new managers.
• Key Manager/Executive Integration-helps the transition into leadership roles
• Global Leadership Development Program-Programs that help managers increase their effectiveness in meeting global challenges
• Management Forums-facilitated by senior management to encourage information sharing and creative problem solving across divisional and functional boundaries

External training is also encouraged at Bristol-Myers Squibb. Tuition Reimbursement programs are effective for all eligible employees, providing up to 100% of the cost of the class or classes attended.

Compensation and Rewards

Creative thinking is encouraged at Bristol-Myers Squibb. The company spends $1.6 billion on research and development each year to try to discover new medicines. Bonuses are awarded annually (and even quarterly in some instances) to employees who go beyond expectations. Stock options are given to every employee at the company through their program entitled "TeamShare," although if performance levels are high, stock options become higher. Annual raises are also given to each employee, once again the amount raised in the employee's salary all depends upon their performance. Once a year, the "President's Award" is given to the employee who has achieved the highest level of excellence in the company. One outstanding employee, nominated by their manager, is given a performance review by the company to compare with other employees in the same situation. The winner of the reward receives a cash prize.

Bristol-Myers Squibb believes in good labor relation. Although all benefits for employees are only for non-unionized employees, the company makes it so that no union has a need to come about. Some programs enacted for the employees are:

• Competitive wages with other companies
• Annual bonuses
• Annual raises
• TeamShare program-allows employees the option of purchasing stocks from the company

Although no special labor laws are practiced in the company, Bristol-Myers Squibb does expect their employees to maintain the highest level of quality that is possible. Annual performance reviews are done on most of their employees, and on-the-job training is given to those who need the extra support.