Bristol-Myers Squibb Case Study

BMS Case Study (Wk 6)

Bristol-Myers Squibb (BMS) is an international bio-pharmaceutical company that focuses on discovering and developing medicines for Alzheimer's disease, HIV/AIDS, solid organ transplantation, rheumatoid arthritis, hepatitis B and C, and type 2 diabetes. Some of the company major products are: Plavix (stroke and heart attack), Avapro/Avalide (diabetic nephropathy and hypertension), Reyataz (HIV), and Abilify (depressive disorder, bipolar mania disorder, and schizophrenia). Squibb was founded in 1858 for the consistent production of pure medicine, even providing medicines during the Civil War. It was in 1889 Bristol and Myers merged with Squibb to create the second largest pharmaceutical company of the world. Today, BMS has facilities across Brazil, Ecuador, Ireland, Japan, Belgium, United States, France, China, Mexico, England, and Puerto Rico. BMS experienced tremendous growth with the successes of its breakthrough medicines. With its constant innovation and strong R&D, BMS had tremendous success both financially and in getting approval from the Food and Drug Administration for its excellent medicines.

Between 2007 and 2013, BMS underwent a tremendous strategic transformation as it refocused operations on biopharmaceuticals. The focus was to restock its product pipeline by acquiring small and medium-sized businesses that had promising products in development. The company successfully implemented three grand strategies: horizontal acquisition, divestiture, and strategic alliance. These strategies led to greater concentration of corporate resources on the biopharmaceutical industry.

Horizontal acquisition is based on growth through the acquisition of similar firms operating at the same stage of the production-marketing chain. BMS used acquisitions as its primary strategic focus. BMS targeted small and medium size businesses in the biopharmaceutical industry that had strong product pipelines. These businesses were of interest because BMS were faced with a dwindling product pipeline due to expiring patents of successful drugs. Between 2008 and 2011, the firm spent nearly $3 billion on horizontal acquisitions. In 2009, BMS acquired Medarex in order to improve its biologics capabilities and expand its oncology pipeline. The strategy was to acquire companies with hope that the investment would provide steady income.

Another strategy implemented by BMS was divestiture which involves the sale of a firm or a major unit of a firm as a growing concern. The divestiture strategy allowed BMS to eliminate misfit business units. A misfit division may be underemphasized in strategic planning and may also confuse stakeholders about the corporate mission. Such conditions led to the