Case Study
WHAT RECOMMENDATIONS WOULD YOU OFFER GENZYME FOR THE FUTURE?
Genzyme’s strategic vision is that they wanted to be a diversified company that could use technology to make difference for people with serious diseases and to get profitable so they can continue to make new medicine. With this vision and focus they developed and produced new drugs while the majority of their competitors only developed new drugs in collaboration with major pharmaceutical companies for producing and distributing the new drugs. Definitely Genzyme has set an example in biotech industry of handling the entire business of producing and distributing drugs but this is a risky and challenging target to sustain.
Genzyme decided to walk alone because they thought collaboration would distract them from their strategic direction and eventually make them dependent. Moreover they also wanted to enjoy the whole profit earned by the orphan drug and spent as self sufficient as they could specially during their start-up phase. Initially, when Genzyme had few projects to handle this policy worked well but as the company is growing quickly and has lots of upcoming projects in the pipeline we think Genzyme should look at engaging in collaboration as well. Genzyme’s core competence and the basis of their ongoing sustainability and profitability is the development of formula for new orphan drugs, but production and distribution could be better dealt by market leader pharmaceuticals in this industry. This may seem to reduce Genzyme’s profitability initially but it will allow the company to exploit its core competency effectively which in turn will lead to the development of more leading to drug inventions and thus increasing their revenue and profitability over the medium to long term.
Collaborations types and structures can take many forms having terms, conditions structures set on a case by case basis. Here as Genzyme’s production, distribution capability already exists it puts Genzyme in a better
Genzyme’s strategic vision is that they wanted to be a diversified company that could use technology to make difference for people with serious diseases and to get profitable so they can continue to make new medicine. With this vision and focus they developed and produced new drugs while the majority of their competitors only developed new drugs in collaboration with major pharmaceutical companies for producing and distributing the new drugs. Definitely Genzyme has set an example in biotech industry of handling the entire business of producing and distributing drugs but this is a risky and challenging target to sustain.
Genzyme decided to walk alone because they thought collaboration would distract them from their strategic direction and eventually make them dependent. Moreover they also wanted to enjoy the whole profit earned by the orphan drug and spent as self sufficient as they could specially during their start-up phase. Initially, when Genzyme had few projects to handle this policy worked well but as the company is growing quickly and has lots of upcoming projects in the pipeline we think Genzyme should look at engaging in collaboration as well. Genzyme’s core competence and the basis of their ongoing sustainability and profitability is the development of formula for new orphan drugs, but production and distribution could be better dealt by market leader pharmaceuticals in this industry. This may seem to reduce Genzyme’s profitability initially but it will allow the company to exploit its core competency effectively which in turn will lead to the development of more leading to drug inventions and thus increasing their revenue and profitability over the medium to long term.
Collaborations types and structures can take many forms having terms, conditions structures set on a case by case basis. Here as Genzyme’s production, distribution capability already exists it puts Genzyme in a better