Companies K and L manufacture and market pharmaceuticals. One firm is a diversified company that sells both human pharmaceuticals as well as health products for animals. This companys strategy is to stay ahead of the competition by investing in the discovery and development of new and innovative drugs.

The other company focuses on generic pharmaceuticals and medical devices. Most of this companys growth has been inorganic; the growth strategy has been to engage in highly leveraged acquisitions, and it has participated in more than 100 during the past eight years. The goal of acquiring new businesses is to enhance the value of the proven drugs in the companys portfolio rather than gamble on discoveries of new drugs for the future.

Question:

Companies K and L....what are their strategies and differences?

One is growing aggressively - where will we see this noted?

INCOME/EXPENSES (\%) INCOME/EXPENSES (\%)