Innovation and New Product Development Case Study

Novartis: From Barriers to Blockbusters

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Abstract:
The 1996 merger of Sandoz Ltd. and Ciba-Geigy Ltd. to form Novartis AG, kicked off a new era in the history of the global pharmaceutical industry. The merger made Novartis Europe's largest and the world's second largest pharmaceutical company. However, Novartis' initial plans to focus on genetic engineering and agribusiness backfired in 1998 owing to negative results from its R&D testing. As a result, the company then shifted its focus to health care – a more lucrative market. But Novartis could not gain a foothold in the US – the largest drug market – due to weak marketing and sales force. After Daniel Vasella, CEO of Novartis, revamped the company to give it a new organisational structure and direction, the company came to be seen as one among the big five pharmaceutical companies.

Pedagogical Objectives:

• To understand Novartis' growth strategies over the years and how the company overcame hurdles in its way
• To understand the organisational changes that Daniel Vasella brought in to place the company in the pharmaceutical industry's big league.

Keywords : Novartis; Daniel Vasella; Gleevec or Glivec; Sandoz; Ciba-Geigy; Genetic engineering; Focus on health care; Reorganisation at Novartis; Growth Strategies Case Study; Life sciences strategy; Direct to customer marketing; US drug market; Troubled agribusiness

Contents:

• The Origin of Novartis
• Bet on Genetic Engineering
• Gene-therapy
• Novartis Restructuring
• Focus on Health Care
• Positive Outcomes