\fDiscussion posts on Eli Lilly Case open statement Post 1 - What the consumer is looking for really using? It can be so tricky for a company to truly define the \"very final\" use of the product / service they deliver to the consumers. But as a matter of fact, validating the market a priori may be a very challenging and indispensable element for assuring success when innovating. If the market validation is not completed on time or not completed at all, the consequences may have a great impact: financially, socially or environmentally. In the case of Exubera, from Pfizer and Nektar, it was very clear how impactful can be not understanding what the custumer is looking for really using before starting manufacturing the product. Besides the $2.8 billion charge due to pulling the plug on Exubera (Weintraub A., 2007), Pfizer also got affected its reliability as a partner to innovate in medicines, knocking on its reputation as a licensing partner considering the way they ended the business relationship with Nektar (Simons J., 2007). It is another point of discussion if Pfizer found out about all limitations and risks from Exubera, or if just reacted before it got worst. And from my analysis this week, a point that called my attention is related to how larger companies are losing the agility to use their capabilities and structure innovation as key part of their strategies and regular activities. Hierarchical and complex organizational structures, and also the effect of bureaucracy and poor communication between departments facilitate working in silos and not sharing and discussing about the potential opportunities for innovation. Christensen, C.M. (2004) describes Lilly's organizational structure at corporate level, but also including functional teams working in affiliate structures. This situation may have a role in the final results obtained with innovation they worked as Exubera. Finally, a very important element that should always be part of the innovation (in fact as the starting point): the consumer and market validation, and the understanding about how the consumer would use the product or service developed. I am sharing with you a picture that explains the comment I am trying to share here. If we don't listen to our client, we don't have good chances on delivering the product he is looking for (attached doc). References: Weintraub, A. (2007). Pfizer Exubera Flop. Bloomberg Businessweek Technology. October 18, 2007. Simons, J. (2007). How the Exubera debable hurts Pfizer. CNNMoney.com. October 19, 2007. Christensen, C.M. (2004). Eli Lilly and Company: Innovation in Diabetes Care. Harvard Business Review. April 15, 2004. Question on 1from prof for post 1 Re your observation that "...a point that called my attention is related to how larger companies are losing the agility to use their capabilities and structure innovation as key part of their strategies and regular activities. Hierarchical and complex organizational structures, and also the effect of bureaucracy and poor communication between departments facilitate working in silos and not sharing and discussing about the potential opportunities for innovation." Does that remind you of any other companies we have studied to date or with which you are familiar? Also, with reference to your cartoon, who or what was the intended market? Post 2 Keep It Simple Stupid After reading this week's material, it seems as if Eli Lilly & Co (ELC). was really focused on targeting a specific audience of diabetes patients but also going further and getting even more specific. It seems as if the company spent copious amounts of time trying to fine tune their product, but this also plagued them by making a myopic product. If the purpose is so discrete, there won't be appeal to other consumers. They were specifically targeting using the uniqueness of The Match, not really thinking about what customers are really looking for - simplicity. I think it is best to make the product as easy to use and understand as possible; especially for a health condition. Does the basis of competition (Unger 2016) give ELC a run for its money? What makes customers choose certain products over another? It reminds me of the acronym, KISS (Keep It Simple Stupid). Oversaturating your audience/consumers with information will exhaust them and cause them to look elsewhere with products that possess a more simplistic approach. The basis of competition during this time was ELC's advancement of the product - they continuously made improvements to their products which ultimately lead them to be myopic and overwhelming to customers. Some companies believe that they need to ramp up their tech savvy messaging to entice current and new customers. However, research shows that for many consumers, the rising volume of marketing messages isn't empowering - it's overwhelming (Spenner & Freeman 2012). In my opinion, as it relates to the ELC case, products should serve one purpose and the product. The product must allow the customer to make a decision easily. \"Our study found that the best tool for measuring consumerengagement efforts is the \"decision simplicity index\Running head: Closing Statement for Color Kinetics & Kodak Case Study Closing Statement Color Kinetics Case Study & Kodak Mini-Case Team A AD 741 Professor Barry Unger September 19, 2016 1 COLOR KINETICS/KODAK CLOSING STATEMENT 2 Abstract Having assessed the afterword of the Color Kinetics case as well as the class discussion, in addition to the Kodak mini-case, the document serves as the closing statement for the week. With consideration of the thoughts and ideas presented, this document attempts to synthesize the major themes and thoughts into a final assessment of our group's thoughts as well as the class contributions. COLOR KINETICS/KODAK CLOSING STATEMENT 3 Color Kinetics & Kodak We studied two vastly different companies as it pertains to their approaches to innovation. One company, Color Kinetics, not only had innovation as it's life-blood, but it understood the importance of dedicating resources to those innovations and strategizing how best to monetize them before competitors overtook the market. Kodak invested much in the way of research and development but relied too heavily on their mainstay product (film) for too long while allowing competitors to dominate the digital imaging markets. They then had to play quite a devastating game of catch-up which ultimately they lost. Out of this we learn 1) that innovation alone does not equal business success and 2) there is much to be said for being one of the earlier competitors in a market space who set the tone for what standards other companies must measure up to. Additionally, leadership must be open to risk and certainly must have enough foresight to fund both their main operations and revenue sources, as well as invest in the future of the company. Leadership should always be looking for the next frontier. We were quite surprised to learn that Color Kinetics decided to pursue the individual restaurant and small-business approach (Unger, 2016). With such great innovation and products in high-demand, and by being a market leader, it would have seemed natural to pursue big business clients having gained a solid market-share with large retailers with visual merchandising. Perhaps they did not want to invest in the infrastructure and resources needed to pursue these larger markets such as the theatrical area or the athletics market as highlighted by our classmate Idowu Osinowo in our group discussion. Kodak's failure, however, does not come as a surprise because they relied too strongly on their large profit-margin product without preparing the company to enter a vastly different COLOR KINETICS/KODAK CLOSING STATEMENT 4 market, despite having knowledge of how digital imaging would soon dominate the photography market (Karlgaard, 2012). Our thoughts and initial assumptions regarding Color Kinetics have not changed drastically. This was a company with a great strategic position to continue to be a market-leader in other arenas. Though it seems they played it safe by remaining with smaller restaurants rather than pursuing opportunities in bigger markets. While this might have proven most feasible for them with their current structure and size, it does seem to be a missed opportunity to grow their company by leaps and bounds given they already had such a great reputation and foothold in retail and visual merchandising. Perhaps they grew weary of the demands of the large retail chains. It could be they were apprehensive about rising manufacturing costs and wanted to limit their exposure. In either case, it doesn't seem they adequately assessed the market opportunity or did not ultimately feel it was best to pursue the larger markets. We agree with the propositions made in terms of the critical need for Color Kinetics to research and assess what characterizes each market opportunity. Many of our classmates emphasized the need for Color Kinetics to diversity but to do so strategically by seeking out the markets that best fit their growth strategy. Some suggested CKI also continue to support their efforts in the retail space which is agreeable given the profit opportunity and success. However, doing so would require expanding the operations and sales distribution efforts to support both arms. We feel the best path to follow would have been to become an OEM partner in the LED space to avoid direct competition with major players, but maintain their market leadership with visual merchandising. They could have also taken this visual creativity and expertise to other COLOR KINETICS/KODAK CLOSING STATEMENT 5 larger markets before pursuing retail opportunities as they already had a model in place to work with larger clients and meet their individualized demand. Retail sales to customers represented profit opportunity at low cost but would also represent a potential market fad rather than a longterm strategy. Ultimately, strategic business model innovation was the key in this week's discussion. Had Color Kinetics taken the leap into larger markets, they would have needed to identify the best approach to business model adjustment, particularly if they entered retail sales to consumers. Had Kodak appropriately adjusted their business model during their film profit margin success, they would have had time to get out ahead of their competitors in the digital imaging space and identify other revenue opportunities. By the time they pursued digital imaging in earnest, major players already had much market share. Being innovative is simply not enough if that innovation doesn't make it to the market efficiently and effectively. COLOR KINETICS/KODAK CLOSING STATEMENT APPENDIX 1 References Karlgaard, R. (2012) "Kodak Didn't Kill Rochester. It Was the Other Way Around"; Wall Street Journal online, January 13, 2012. Narayandas, Das & Caravella, Mary Neuner (2001). Color Kinetics. Harvard Business Publishing. Retrieved September 11, 2016. Unger, B. (2016). Lecture 2 - Color Kinetics Afterword Case Study. Retrieved September 18, 2016 from https://learn.bu.edu/webapps/blackboard/execute/displayLearningUnit? course_id=_33349_1&content_id=_4267140_1&framesetWrapped=true 6 Running head: Closing Statement for Color Kinetics & Kodak Case Study Closing Statement Color Kinetics Case Study & Kodak Mini-Case Team A AD 741 Professor Barry Unger September 19, 2016 1 COLOR KINETICS/KODAK CLOSING STATEMENT 2 Abstract Having assessed the afterword of the Color Kinetics case as well as the class discussion, in addition to the Kodak mini-case, the document serves as the closing statement for the week. With consideration of the thoughts and ideas presented, this document attempts to synthesize the major themes and thoughts into a final assessment of our group's thoughts as well as the class contributions. COLOR KINETICS/KODAK CLOSING STATEMENT 3 Color Kinetics & Kodak We studied two vastly different companies as it pertains to their approaches to innovation. One company, Color Kinetics, not only had innovation as it's life-blood, but it understood the importance of dedicating resources to those innovations and strategizing how best to monetize them before competitors overtook the market. Kodak invested much in the way of research and development but relied too heavily on their mainstay product (film) for too long while allowing competitors to dominate the digital imaging markets. They then had to play quite a devastating game of catch-up which ultimately they lost. Out of this we learn 1) that innovation alone does not equal business success and 2) there is much to be said for being one of the earlier competitors in a market space who set the tone for what standards other companies must measure up to. Additionally, leadership must be open to risk and certainly must have enough foresight to fund both their main operations and revenue sources, as well as invest in the future of the company. Leadership should always be looking for the next frontier. We were quite surprised to learn that Color Kinetics decided to pursue the individual restaurant and small-business approach (Unger, 2016). With such great innovation and products in high-demand, and by being a market leader, it would have seemed natural to pursue big business clients having gained a solid market-share with large retailers with visual merchandising. Perhaps they did not want to invest in the infrastructure and resources needed to pursue these larger markets such as the theatrical area or the athletics market as highlighted by our classmate Idowu Osinowo in our group discussion. Kodak's failure, however, does not come as a surprise because they relied too strongly on their large profit-margin product without preparing the company to enter a vastly different COLOR KINETICS/KODAK CLOSING STATEMENT 4 market, despite having knowledge of how digital imaging would soon dominate the photography market (Karlgaard, 2012). Our thoughts and initial assumptions regarding Color Kinetics have not changed drastically. This was a company with a great strategic position to continue to be a market-leader in other arenas. Though it seems they played it safe by remaining with smaller restaurants rather than pursuing opportunities in bigger markets. While this might have proven most feasible for them with their current structure and size, it does seem to be a missed opportunity to grow their company by leaps and bounds given they already had such a great reputation and foothold in retail and visual merchandising. Perhaps they grew weary of the demands of the large retail chains. It could be they were apprehensive about rising manufacturing costs and wanted to limit their exposure. In either case, it doesn't seem they adequately assessed the market opportunity or did not ultimately feel it was best to pursue the larger markets. We agree with the propositions made in terms of the critical need for Color Kinetics to research and assess what characterizes each market opportunity. Many of our classmates emphasized the need for Color Kinetics to diversity but to do so strategically by seeking out the markets that best fit their growth strategy. Some suggested CKI also continue to support their efforts in the retail space which is agreeable given the profit opportunity and success. However, doing so would require expanding the operations and sales distribution efforts to support both arms. We feel the best path to follow would have been to become an OEM partner in the LED space to avoid direct competition with major players, but maintain their market leadership with visual merchandising. They could have also taken this visual creativity and expertise to other COLOR KINETICS/KODAK CLOSING STATEMENT 5 larger markets before pursuing retail opportunities as they already had a model in place to work with larger clients and meet their individualized demand. Retail sales to customers represented profit opportunity at low cost but would also represent a potential market fad rather than a longterm strategy. Ultimately, strategic business model innovation was the key in this week's discussion. Had Color Kinetics taken the leap into larger markets, they would have needed to identify the best approach to business model adjustment, particularly if they entered retail sales to consumers. Had Kodak appropriately adjusted their business model during their film profit margin success, they would have had time to get out ahead of their competitors in the digital imaging space and identify other revenue opportunities. By the time they pursued digital imaging in earnest, major players already had much market share. Being innovative is simply not enough if that innovation doesn't make it to the market efficiently and effectively. COLOR KINETICS/KODAK CLOSING STATEMENT APPENDIX 1 References Karlgaard, R. (2012) "Kodak Didn't Kill Rochester. It Was the Other Way Around"; Wall Street Journal online, January 13, 2012. Narayandas, Das & Caravella, Mary Neuner (2001). Color Kinetics. Harvard Business Publishing. Retrieved September 11, 2016. Unger, B. (2016). Lecture 2 - Color Kinetics Afterword Case Study. Retrieved September 18, 2016 from https://learn.bu.edu/webapps/blackboard/execute/displayLearningUnit? course_id=_33349_1&content_id=_4267140_1&framesetWrapped=true 6 Discussion posts on Eli Lilly Case open statement Post 1 - What the consumer is looking for really using? It can be so tricky for a company to truly define the \"very final\" use of the product / service they deliver to the consumers. But as a matter of fact, validating the market a priori may be a very challenging and indispensable element for assuring success when innovating. If the market validation is not completed on time or not completed at all, the consequences may have a great impact: financially, socially or environmentally. In the case of Exubera, from Pfizer and Nektar, it was very clear how impactful can be not understanding what the custumer is looking for really using before starting manufacturing the product. Besides the $2.8 billion charge due to pulling the plug on Exubera (Weintraub A., 2007), Pfizer also got affected its reliability as a partner to innovate in medicines, knocking on its reputation as a licensing partner considering the way they ended the business relationship with Nektar (Simons J., 2007). It is another point of discussion if Pfizer found out about all limitations and risks from Exubera, or if just reacted before it got worst. And from my analysis this week, a point that called my attention is related to how larger companies are losing the agility to use their capabilities and structure innovation as key part of their strategies and regular activities. Hierarchical and complex organizational structures, and also the effect of bureaucracy and poor communication between departments facilitate working in silos and not sharing and discussing about the potential opportunities for innovation. Christensen, C.M. (2004) describes Lilly's organizational structure at corporate level, but also including functional teams working in affiliate structures. This situation may have a role in the final results obtained with innovation they worked as Exubera. Finally, a very important element that should always be part of the innovation (in fact as the starting point): the consumer and market validation, and the understanding about how the consumer would use the product or service developed. I am sharing with you a picture that explains the comment I am trying to share here. If we don't listen to our client, we don't have good chances on delivering the product he is looking for (attached doc). References: Weintraub, A. (2007). Pfizer Exubera Flop. Bloomberg Businessweek Technology. October 18, 2007. Simons, J. (2007). How the Exubera debable hurts Pfizer. CNNMoney.com. October 19, 2007. Christensen, C.M. (2004). Eli Lilly and Company: Innovation in Diabetes Care. Harvard Business Review. April 15, 2004. Question on 1from prof for post 1 Re your observation that "...a point that called my attention is related to how larger companies are losing the agility to use their capabilities and structure innovation as key part of their strategies and regular activities. Hierarchical and complex organizational structures, and also the effect of bureaucracy and poor communication between departments facilitate working in silos and not sharing and discussing about the potential opportunities for innovation." Does that remind you of any other companies we have studied to date or with which you are familiar? Also, with reference to your cartoon, who or what was the intended market? Post 2 Keep It Simple Stupid After reading this week's material, it seems as if Eli Lilly & Co (ELC). was really focused on targeting a specific audience of diabetes patients but also going further and getting even more specific. It seems as if the company spent copious amounts of time trying to fine tune their product, but this also plagued them by making a myopic product. If the purpose is so discrete, there won't be appeal to other consumers. They were specifically targeting using the uniqueness of The Match, not really thinking about what customers are really looking for - simplicity. I think it is best to make the product as easy to use and understand as possible; especially for a health condition. Does the basis of competition (Unger 2016) give ELC a run for its money? What makes customers choose certain products over another? It reminds me of the acronym, KISS (Keep It Simple Stupid). Oversaturating your audience/consumers with information will exhaust them and cause them to look elsewhere with products that possess a more simplistic approach. The basis of competition during this time was ELC's advancement of the product - they continuously made improvements to their products which ultimately lead them to be myopic and overwhelming to customers. Some companies believe that they need to ramp up their tech savvy messaging to entice current and new customers. However, research shows that for many consumers, the rising volume of marketing messages isn't empowering - it's overwhelming (Spenner & Freeman 2012). In my opinion, as it relates to the ELC case, products should serve one purpose and the product. The product must allow the customer to make a decision easily. \"Our study found that the best tool for measuring consumer-engagement efforts is the \"decision simplicity index\Running head: Closing Statement for Eli Lilly & Pfizer Case Study CLOSING STATEMENT ELI LILLY & PFIZER CASE STUDIES Team B AD 741 September 25, 2016 1 CLOSING STATEMENT - ELI LILLY & PFIZER CASE 2 Abstract The main objective this paper is to find out the reasons behind failure of new diabetic drugs which were introduced by Pfizer and Eli Lilly. We will also discuss the similarities and differences between Pfizer and Eli Lilly. In the end, we will go deep into the organizational structure of these two companies. This paper will also focus on the reasons which makes companies reluctant to change. Having assessed the afterword of Eli Lilly case, the class discussion, as well as the Eli Lilly mini-case, the document serves as the closing statement for the week. With consideration of the thoughts and ideas presented, this document attempts to synthesize the major themes and thoughts into a final assessment of our group's thoughts as well as the class contributions. CLOSING STATEMENT - ELI LILLY & PFIZER CASE 3 The Cause of Failure Pfizer and Eli Lilly both experienced failure in different ways within the diabetes market due to their lack of understanding and inability to fulfill the expectations of key stakeholders (patients, general doctors, and medical insurance companies). As many of our classmates mentioned, this was due to their lack of market validation, and consumer understanding for how products affected a consumer's convenience or lifestyle (i.e. their 'pains') (Adams, 2004). Relying on previous success, Eli Lilly gathered data from specialists and endocrinologists that focused on insulin purity leading to the development of Humulin, instead of general doctors who were treating and consulting with diabetic patients daily that had difficulty managing blood levels and insulin dosage (Unger, 2016). Unfortunately, neither product provided the functionality or convenience end users were looking for and therefore did not warrant the premium price. Both companies were heavily focused on developing innovative products rather than key stakeholders, leading to marketing myopia.( Levitt,2004) Though Pfizer's organizational structure provided them with the flexibility to identify or create technological innovations such as Exubera, their lack of external communication resulted in poor knowledge in the diabetes marketspace. Their innovation strategy allowed them to identify a technological innovation developed by Nektar Therapeutics; however, their execution of \"ready, fire, aim\" led to negative results (Weintraub, 2007; Adams, 2004). Though their product was innovative, they could have utilized the Pyramid of Influence to clearly define the target market (Adams, 2004). Eli Lilly's Humulin met a similar fate as Exubera. In addition, the company's stubbornness to invest in other technological and disruptive innovations in adjacent segments caused them to miss out on opportunities where convenience and customer needs were not being CLOSING STATEMENT - ELI LILLY & PFIZER CASE 4 met (another example of marketing myopia). Management within Eli Lilly as well as dominance in the domestic market also caused them to lose focus on the customer experience (Unger, 2016). Challenges faced by companies to stay "young" and entrepreneurial and keeping in touch with the changing basis of competition. Companies face variety of challenges while trying to stay "young" and entrepreneurial and keeping in touch with the changing basis of competition. The companies need to be aware of the economic, social and technological challenges which affect their organization. There are a plethora of macro-economic forces spanning from the increasingly competitive global marketplace to technological innovations that have significantly accelerated since the advent of the world-wide-web. Some of the challenges faced by the pharmaceutical companies in the modern era are as follows: Regulation and compliance: In pharmaceutical sectors, the companies need to take permission from regulator prior to introduction of the medicine in the market. It involves series of steps which sometimes takes many years. Over the last few years, Eli Lilly came across many instances where Food and Drug Administration has declined to approve the company drugs. (Segalstad, 2008). Competencies and recruiting the right talent: In pharmaceutical sectors, the companies need people with special talent. This is not the easy job. The employees should flexible enough to work all across the world. In these days, companies are spending millions of dollars on recruiting right set of people. After 1990, domestic companies have shifted focus towards global market. CLOSING STATEMENT - ELI LILLY & PFIZER CASE 5 Over the last few years, Eli Lilly has failed to come with innovative products. This shows that company have failed to recruit right set of people. Patent issues: companies spend millions of dollar in developing new drugs. As per the present laws, the patents expire after 20 years. In case of patent it was felt that there was a stronger reason for a good idea not to stay in the developer's pocket forever. For one, if it really were a good product, the developer would be expected to make some kind of return on the product. The time period 20 years is very short for the pharmaceutical companies considering their investments. (Thomas, 2005). Embrace change at right time: change is very important for the companies but it is very important that company change at right time. Apart from this, company should make sure that change should bring some advantages for the customers. For many years, Eli Lilly hardly spend any money on the innovation of new drugs. Similarly, Pfizer came with innovative product called Humulin but customers dislike the change as product fails to fulfill the expectations. (Engelhardt, H. T., & Garrett, 2008). Uncertainty about the future: It is very difficult for the companies to predict about the future. The customer needs and expectations are changing rapidly. Every year, new diseases are coming and older ones are getting extinct. In such scenario, it is not easy for the pharmaceutical companies to cope with the situation. This is hampering the growth of the companies. Can we Prevent Future Failure? CLOSING STATEMENT - ELI LILLY & PFIZER CASE 6 Shira Caldie's mention of KISS (Keep It Simple Stupid) calls attention to the importance of providing a simple solution that meets the customer's expectations with regards to functionality and convenience. Researching and validating the market will ensure there is a market demand for the product, confirm the pain level of the market to warrant the need for a specific product, as well as allow them to price and place products accordingly (Adams, 2004). Additionally, market research will also identify shifting areas of competition affected by global economic, social, and technological challenges in convenience, functionality, and reliability (Christensen, 1999). If Eli Lilly understood how the basis of competition was changing, they would have realized (before they started losing market share) the revenues and profitability insulin pens and blood glucose test meters would have provided, despite cannibalizing their current offering. To avoid marketing myopia, organizations should focus on acting like a startup (Adams, 2004). This may include establishing a culture and structure that is internally integrated, where departments communicate and understand each other's needs. It should also tie rewards and incentives to innovative ideas, as well as encourage external communication to clearly understand stakeholders' needs and pains with current product/service offerings. Startups are also limited with their resources and so are more careful about their market research and how they hire talent. As Adams (2004) points out, hiring the 'right people' is part of the key to success for startups. The Kodak case last week was an example of an organization that failed to internally integrate, externally communicate, and understanding the shifting basis of competition, ultimately leading to their decline. It is difficult for large organizations that have tight and rigid policies to realize the changing basis of competition and how the redefinition of the customer and stakeholders affect CLOSING STATEMENT - ELI LILLY & PFIZER CASE 7 an organization's innovation strategy (Unger, 2016). Organizations need to continually innovate to remain competitive and prevent the shifting basis of competition from consuming once profitable products. However, as mentioned, it is addressed through structural reorganization that focuses heavily on not only innovation strategies but market validation and understanding of the change in stakeholder needs. Upper management should also increase direct interaction with customers more often to experience their pains firsthand, while taking other internal suggestions and concerns into consideration. CLOSING STATEMENT - ELI LILLY & PFIZER CASE References: Levitt, T. (2004). Marketing Myopia. Harvard Business Review. Retrieved September 20, 2016, from https://hbr.org/2004/07/marketing-myopia Smith, N.C., Drumwright, M.E., & Gentile, M.C. (2009). Faculty & Research Working Paper - The New Marketing Myopia. INSEAD. Retrieved September 22, 2016, from https://flora.insead.edu/fichiersti_wp/inseadwp2009/2009-08.pdf Christensen, C.M. (2004). Eli Lilly and Company: Innovation in diabetes care. Boston, MA: Harvard Business School Publisher Christensen, C.M. (1999). Innovation and the General Manager. Boston, MA: McGraw-Hill Irwin. Gutierrez, C. (2007, October 18). Pfizer washes its hands of Exubera. Retrieved on May 27, 2012 from http://www.forbes.com/2007/10/18/pfizer-earnings-closer-markets-equitiescx_cg_1018markets47.html Unger, B. (2016). Lecture 3 - Eli Lilly's Afterword, Exubera Pfizer Inhaled Insulin Animation. Retrieved September 24, 2016, from https://onlinecampus.bu.edu/webapps/blackboard/execute/displayLearningUnit? course_id=_33349_1&content_id=_4267151_1&framesetWrapped=true Adams, R. (2004). A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. New York: Random House/Crown Business. Ahmad, S. I. (2012). Diabetes: An old disease, a new insight. New York: Springer Science Business Media. 8 CLOSING STATEMENT - ELI LILLY & PFIZER CASE Thomas, J. R. (2005). Pharmaceutical patent law. Washington, D.C.: Bureau of National Affairs. Engelhardt, H. T., & Garrett, J. R. (2008). Innovation and the pharmaceutical industry: Critical reflections on the virtues of profit. Salem, MA: M & M Scrivener Press. Segalstad, S. H. (2008). International IT regulations and compliance: Quality standards in the pharmaceutical and regulated industries. Chichester, West Sussex, UK: Wiley. 9 Running head: Closing Statement for Eli Lilly & Pfizer Case Study CLOSING STATEMENT ELI LILLY & PFIZER CASE STUDIES Team B AD 741 September 25, 2016 1 CLOSING STATEMENT - ELI LILLY & PFIZER CASE 2 Abstract The main objective this paper is to find out the reasons behind failure of new diabetic drugs which were introduced by Pfizer and Eli Lilly. We will also discuss the similarities and differences between Pfizer and Eli Lilly. In the end, we will go deep into the organizational structure of these two companies. This paper will also focus on the reasons which makes companies reluctant to change. Having assessed the afterword of Eli Lilly case, the class discussion, as well as the Eli Lilly mini-case, the document serves as the closing statement for the week. With consideration of the thoughts and ideas presented, this document attempts to synthesize the major themes and thoughts into a final assessment of our group's thoughts as well as the class contributions. CLOSING STATEMENT - ELI LILLY & PFIZER CASE 3 The Cause of Failure Pfizer and Eli Lilly both experienced failure in different ways within the diabetes market due to their lack of understanding and inability to fulfill the expectations of key stakeholders (patients, general doctors, and medical insurance companies). As many of our classmates mentioned, this was due to their lack of market validation, and consumer understanding for how products affected a consumer's convenience or lifestyle (i.e. their 'pains') (Adams, 2004). Relying on previous success, Eli Lilly gathered data from specialists and endocrinologists that focused on insulin purity leading to the development of Humulin, instead of general doctors who were treating and consulting with diabetic patients daily that had difficulty managing blood levels and insulin dosage (Unger, 2016). Unfortunately, neither product provided the functionality or convenience end users were looking for and therefore did not warrant the premium price. Both companies were heavily focused on developing innovative products rather than key stakeholders, leading to marketing myopia. Though Pfizer's organizational structure provided them with the flexibility to identify or create technological innovations such as Exubera, their lack of external communication resulted in poor knowledge in the diabetes marketspace. Their innovation strategy allowed them to identify a technological innovation developed by Nektar Therapeutics; however, their execution of \"ready, fire, aim\" led to negative results (Weintraub, 2007; Adams, 2004). Though their product was innovative, they could have utilized the Pyramid of Influence to clearly define the target market (Adams, 2004). Eli Lilly's Humulin met a similar fate as Exubera. In addition, the company's stubbornness to invest in other technological and disruptive innovations in adjacent segments caused them to miss out on opportunities where convenience and customer needs were not being CLOSING STATEMENT - ELI LILLY & PFIZER CASE 4 met (another example of marketing myopia). Management within Eli Lilly as well as dominance in the domestic market also caused them to lose focus on the customer experience (Unger, 2016). Can we Prevent Future Failure? Shira Caldie's mention of KISS (Keep It Simple Stupid) calls attention to the importance of providing a simple solution that meets the customer's expectations with regards to functionality and convenience. Researching and validating the market will ensure there is a market demand for the product, confirm the pain level of the market to warrant the need for a specific product, as well as allow them to price and place products accordingly (Adams, 2004). Additionally, market research will also identify shifting areas of competition affected by global economic, social, and technological challenges in convenience, functionality, and reliability (Christensen, 1999). If Eli Lilly understood how the basis of competition was changing, they would have realized (before they started losing market share) the revenues and profitability insulin pens and blood glucose test meters would have provided, despite cannibalizing their current offering. To avoid marketing myopia, organizations should focus on acting like a startup (Adams, 2004). This may include establishing a culture and structure that is internally integrated, where departments communicate and understand each other's needs. It should also tie rewards and incentives to innovative ideas, as well as encourage external communication to clearly understand stakeholders' needs and pains with current product/service offerings. Startups are also limited with their resources and so are more careful about their market research and how they hire talent. As Adams (2004) points out, hiring the 'right people' is part of the key to success for startups. The Kodak case last week was an example of an organization that failed to CLOSING STATEMENT - ELI LILLY & PFIZER CASE 5 internally integrate, externally communicate, and understanding the shifting basis of competition, ultimately leading to their decline. It is difficult for large organizations that have tight and rigid policies to realize the changing basis of competition and how the redefinition of the customer and stakeholders affect an organization's innovation strategy (Unger, 2016). Organizations need to continually innovate to remain competitive and prevent the shifting basis of competition from consuming once profitable products. However, as mentioned, it is addressed through structural reorganization that focuses heavily on not only innovation strategies but market validation and understanding of the change in stakeholder needs. Upper management should also increase direct interaction with customers more often to experience their pains firsthand, while taking other internal suggestions and concerns into consideration. CLOSING STATEMENT - ELI LILLY & PFIZER CASE References: Levitt, T. (2004). Marketing Myopia. Harvard Business Review. Retrieved September 20, 2016, from https://hbr.org/2004/07/marketing-myopia Smith, N.C., Drumwright, M.E., & Gentile, M.C. (2009). Faculty & Research Working Paper - The New Marketing Myopia. INSEAD. Retrieved September 22, 2016, from https://flora.insead.edu/fichiersti_wp/inseadwp2009/2009-08.pdf Christensen, C.M. (2004). Eli Lilly and Company: Innovation in diabetes care. Boston, MA: Harvard Business School Publisher Christensen, C.M. (1999). Innovation and the General Manager. Boston, MA: McGraw-Hill Irwin. Gutierrez, C. (2007, October 18). Pfizer washes its hands of Exubera. Retrieved on May 27, 2012 from http://www.forbes.com/2007/10/18/pfizer-earnings-closer-markets-equitiescx_cg_1018markets47.html Unger, B. (2016). Lecture 3 - Eli Lilly's Afterword, Exubera Pfizer Inhaled Insulin Animation. Retrieved September 24, 2016, from https://onlinecampus.bu.edu/webapps/blackboard/execute/displayLearningUnit? course_id=_33349_1&content_id=_4267151_1&framesetWrapped=true Adams, R. (2004). A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. New York: Random House/Crown Business. 6 CLOSING STATEMENT - ELI LILLY & PFIZER CASE 7 I did a major revamp on the paper to consolidate it within 2 1/2 pages. I took a lot of your main points and included it in the paper (removing many of the examples you included previously). This will make the paper concise on main points. It uses relevant information discussed by our classmates in this week's discussion posts as well as course concepts from course readings. I highlight the first two references because your original paper did not state where these references were used. I will review again but I don't believe I used information that would warrant use of those references but we can double check again. i checked all of the other posts and sources and doing my interpretation - i will redo the draft ok So, I'm not confident that these statements would have been revised considering the references didn't even include the links/articles it was pulled from. let me redo it I'm already making my revisions I am sorry you don't like my input It's not that I don't like your input, I just don't agree with plagiarism. And if you don't think it's plagiarism, then we can reference the Academic Code of Conduct and see what BU constitutes as plagiarism. But, from what I have found, they are copied, word for word. I also think it just needs to reference the course material more. i don't do plagiarism either But they're copied. How is that not plagiarism? They are exact words, not even reworded The Code of Conduct specifically says, "Plagiarism includes but is not limited to the following: copying the answers of another student on an examination, copying or restating the work or ideas of another person or persons in any oral or written work (printed or electronic) without citing the appropriate source..." Your statements were not in quotes, and there was no citation or reference. i did n't think that way I was using other students post and making my comments I am sorry ..please don't say plagorism which i honestly don't know If you still disagree, then I believe we should speak to the facilitator or professor about what constitutes as plagiarism because I found those quotes directly on the internet. I have taken other students posts andtrying to make my asessment LS And I uncomfortable with being associated with a paper that is not correctly cited or referenced. i didn't realized..i was using same words I am not a person who take other's work I was making my assessment based other student's discussion posts you can start your draft i will make my comments i am sorry it is looking that way which i didn't knew LS Assessment of other student's work is fine but I don't see which student posted these statements which is why I asked before which students you were pulling the information from. oh we should give those student reference LS I don't see a student that posted these statements though. I don't see which student brought up these topics I just send you discussion posts from students based on those references and prof questions i did search and made those comments you make your inputs ..I will redo my assessment LS The posts that you used are good references, however they do not include the plagiarized statements that are in the paper. FOr instance, on page 4 "There are a plethora of macro-economic forces spanning from the increasingly competitive global marketplace to technological innovations that have significantly accelerated since the advent of the world-wide-web." Which seems to be pulled directly from http://www.activatedlogic.com/strategy-adapting-to-the-changingbusiness-environment.html oh ok.. I am sorry for unknowingly doing that LS That is plagiarism i thought of using those words as it suits I am sorry Laura I will rework on my piece PS If you use the exact sentence, it needs to have quotes and citations and references Don't rework on it because I've already gone through it I need to finish it it is done without my knowledge i thought i was using as it is right my interpretation PS But, without citing it, you're using it as if it's your own thought and sentence when it's not. everyone makes mistakes ...i didn't knew of that way I should have put citation i know i was taking the intent as it was draft... and knew i have to correct it i am sorry sincerely..i didn't knew all i was thinking of the content was right and is suitable for our statement But, I think plagiarism is unacceptable in a graduate level course, especially when we all agree to a code of conduct. This could affect our academic standing if someone else were to notice. I agree too i didn't knew ... i thought of taking the content as it looks relavant , all i missed was the citation i should have put that It's like if someone were to copy and paste your concepts or paper and used it as their own without making reference to your hard work. I should have put the citate all that hard work goes waste with one mistake.. i will redo this and i sincerely didn't knew Running head: Closing Statement for Eli Lilly & Pfizer Case Study CLOSING STATEMENT ELI LILLY & PFIZER CASE STUDIES Team B AD 741 September 25, 2016 1 CLOSING STATEMENT - ELI LILLY & PFIZER CASE 2 Abstract The main objective this paper is to find out the reasons behind failure of new diabetic drugs which were introduced by Pfizer and Eli Lilly. We will also discuss the similarities and differences between Pfizer and Eli Lilly. In the end, we will go deep into the organizational structure of these two companies. This paper will also focus on the reasons which makes companies reluctant to change. Having assessed the afterword of Eli Lilly case, the class discussion, as well as the Eli Lilly mini-case, the document serves as the closing statement for the week. With consideration of the thoughts and ideas presented, this document attempts to synthesize the major themes and thoughts into a final assessment of our group's thoughts as well as the class contributions. CLOSING STATEMENT - ELI LILLY & PFIZER CASE 3 The Cause of Failure Pfizer and Eli Lilly both experienced failure in different ways within the diabetes market due to their lack of understanding and inability to fulfill the expectations of key stakeholders (patients, general doctors, and medical insurance companies). As many of our classmates mentioned, this was due to their lack of market validation, and consumer understanding for how products affected a consumer's convenience or lifestyle (i.e. their 'pains') (Adams, 2004). Relying on previous success, Eli Lilly gathered data from specialists and endocrinologists that focused on insulin purity leading to the development of Humulin, instead of general doctors who were treating and consulting with diabetic patients daily that had difficulty managing blood levels and insulin dosage (Unger, 2016). Unfortunately, neither product provided the functionality or convenience end users were looking for and therefore did not warrant the premium price. Both companies were heavily focused on developing innovative products rather than key stakeholders, leading to marketing myopia.( Levitt,2004) Though Pfizer's organizational structure provided them with the flexibility to identify or create technological innovations such as Exubera, their lack of external communication resulted in poor knowledge in the diabetes marketspace. Their innovation strategy allowed them to identify a technological innovation developed by Nektar Therapeutics; however, their execution of \"ready, fire, aim\" led to negative results (Weintraub, 2007; Adams, 2004). Though their product was innovative, they could have utilized the Pyramid of Influence to clearly define the target market (Adams, 2004). Eli Lilly's Humulin met a similar fate as Exubera. In addition, the company's stubbornness to invest in other technological and disruptive innovations in adjacent segments caused them to miss out on opportunities where convenience and customer needs were not being CLOSING STATEMENT - ELI LILLY & PFIZER CASE 4 met (another example of marketing myopia). Management within Eli Lilly as well as dominance in the domestic market also caused them to lose focus on the customer experience (Unger, 2016). Challenges faced by companies to stay "young" and entrepreneurial and keeping in touch with the changing basis of competition. Companies face variety of challenges while trying to stay "young" and entrepreneurial and keeping in touch with the changing basis of competition. The companies need to be aware of the economic, social and technological challenges which affect their organization. There are a plethora of macro-economic forces spanning from the increasingly competitive global marketplace to technological innovations that have significantly accelerated since the advent of the world-wide-web. Some of the challenges faced by the pharmaceutical companies in the modern era are as follows: Regulation and compliance: In pharmaceutical sectors, the companies need to take permission from regulator prior to introduction of the medicine in the market. It involves series of steps which sometimes takes many years. Over the last few years, Eli Lilly came across many instances where Food and Drug Administration has declined to approve the company drugs. (Segalstad, 2008). Competencies and recruiting the right talent: In pharmaceutical sectors, the companies need people with special talent. This is not the easy job. The employees should flexible enough to work all across the world. In these days, companies are spending millions of dollars on recruiting right set of people. After 1990, domestic companies have shifted focus towards global market. CLOSING STATEMENT - ELI LILLY & PFIZER CASE 5 Over the last few years, Eli Lilly has failed to come with innovative products. This shows that company have failed to recruit right set of people. Patent issues: companies spend millions of dollar in developing new drugs. As per the present laws, the patents expire after 20 years. In case of patent it was felt that there was a stronger reason for a good idea not to stay in the developer's pocket forever. For one, if it really were a good product, the developer would be expected to make some kind of return on the product. The time period 20 years is very short for the pharmaceutical companies considering their investments. (Thomas, 2005). Embrace change at right time: change is very important for the companies but it is very important that company change at right time. Apart from this, company should make sure that change should bring some advantages for the customers. For many years, Eli Lilly hardly spend any money on the innovation of new drugs. Similarly, Pfizer came with innovative product called Humulin but customers dislike the change as product fails to fulfill the expectations. (Engelhardt, H. T., & Garrett, 2008). Uncertainty about the future: It is very difficult for the companies to predict about the future. The customer needs and expectations are changing rapidly. Every year, new diseases are coming and older ones are getting extinct. In such scenario, it is not easy for the pharmaceutical companies to cope with the situation. This is hampering the growth of the companies. Can we Prevent Future Failure? CLOSING STATEMENT - ELI LILLY & PFIZER CASE 6 Shira Caldie's mention of KISS (Keep It Simple Stupid) calls attention to the importance of providing a simple solution that meets the customer's expectations with regards to functionality and convenience. Researching and validating the market will ensure there is a market demand for the product, confirm the pain level of the market to warrant the need for a specific product, as well as allow them to price and place products accordingly (Adams, 2004). Additionally, market research will also identify shifting areas of competition affected by global economic, social, and technological challenges in convenience, functionality, and reliability (Christensen, 1999). If Eli Lilly understood how the basis of competition was changing, they would have realized (before they started losing market share) the revenues and profitability insulin pens and blood glucose test meters would have provided, despite cannibalizing their current offering. To avoid marketing myopia, organizations should focus on acting like a startup (Adams, 2004). This may include establishing a culture and structure that is internally integrated, where departments communicate and understand each other's needs. It should also tie rewards and incentives to innovative ideas, as well as encourage external communication to clearly understand stakeholders' needs and pains with current product/service offerings. Startups are also limited with their resources and so are more careful about their market research and how they hire talent. As Adams (2004) points out, hiring the 'right people' is part of the key to success for startups. The Kodak case last week was an example of an organization that failed to internally integrate, externally communicate, and understanding the shifting basis of competition, ultimately leading to their decline. It is difficult for large organizations that have tight and rigid policies to realize the changing basis of competition and how the redefinition of the customer and stakeholders affect CLOSING STATEMENT - ELI LILLY & PFIZER CASE 7 an organization's innovation strategy (Unger, 2016). Organizations need to continually innovate to remain competitive and prevent the shifting basis of competition from consuming once profitable products. However, as mentioned, it is addressed through structural reorganization that focuses heavily on not only innovation strategies but market validation and understanding of the change in stakeholder needs. Upper management should also increase direct interaction with customers more often to experience their pains firsthand, while taking other internal suggestions and concerns into consideration. CLOSING STATEMENT - ELI LILLY & PFIZER CASE References: Levitt, T. (2004). Marketing Myopia. Harvard Business Review. Retrieved September 20, 2016, from https://hbr.org/2004/07/marketing-myopia Smith, N.C., Drumwright, M.E., & Gentile, M.C. (2009). Faculty & Research Working Paper - The New Marketing Myopia. INSEAD. Retrieved September 22, 2016, from https://flora.insead.edu/fichiersti_wp/inseadwp2009/2009-08.pdf Christensen, C.M. (2004). Eli Lilly and Company: Innovation in diabetes care. Boston, MA: Harvard Business School Publisher Christensen, C.M. (1999). Innovation and the General Manager. Boston, MA: McGraw-Hill Irwin. Gutierrez, C. (2007, October 18). Pfizer washes its hands of Exubera. Retrieved on May 27, 2012 from http://www.forbes.com/2007/10/18/pfizer-earnings-closer-markets-equitiescx_cg_1018markets47.html Unger, B. (2016). Lecture 3 - Eli Lilly's Afterword, Exubera Pfizer Inhaled Insulin Animation. Retrieved September 24, 2016, from https://onlinecampus.bu.edu/webapps/blackboard/execute/displayLearningUnit? course_id=_33349_1&content_id=_4267151_1&framesetWrapped=true Adams, R. (2004). A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. New York: Random House/Crown Business. Ahmad, S. I. (2012). Diabetes: An old disease, a new insight. New York: Springer Science Business Media. 8 CLOSING STATEMENT - ELI LILLY & PFIZER CASE Thomas, J. R. (2005). Pharmaceutical patent law. Washington, D.C.: Bureau of National Affairs. Engelhardt, H. T., & Garrett, J. R. (2008). Innovation and the pharmaceutical industry: Critical reflections on the virtues of profit. Salem, MA: M & M Scrivener Press. Segalstad, S. H. (2008). International IT regulations and compliance: Quality standards in the pharmaceutical and regulated industries. Chichester, West Sussex, UK: Wiley. 9