Analysis of Merck& Company Inc - Research Paper Example

If a strategy had not been introduced for keeping Merck’s competitiveness at low levels, the following phenomenon would appear: the firm’s ability to face its rivals would be gradually decreased, leading to severe losses in one or more organizational activities. In other words, an aggressive strategy would be the most appropriate for the organization under current market positions. Figure 1 – Total revenue for Merck & Company Inc for the years 2006 up to 2008 (source: case study, p.132) At the same time, the firm’s profits for 2008 have been a bit lower from those of 2007, see Figure 1 above, leading to the assumption that a strategy for securing the survival and the further growth of the organization is necessary.

In other words, the annual objective that the firm’s managers have set can be characterized as feasible, an assumption based both on the firm’s performance in the near past but also on the industry’s perspectives and demands. . The above acquisition will help Merck to achieve two key benefits: to decrease its costs and to increase the range of its products, enhancing its competitiveness in the global market. In fact, acquisitions have been used by the firm for quite long, from 2000 onwards and have been proved quite effective in supporting organizational growth (case study p.130). c) Resource Allocation When referring to organizational environment the term resources can be used for reflecting a high range of organizational elements, including ‘money, material and technology’ (Morgan 169).

In the context of strategic management, resource allocation is characterized as quite valuable for the achievement of organizational goals. In fact, resources can be vital even for the survival of the organization, under the terms that without the required resources all business plans can be led to failure (Daft, Murphy and Hugh 557). Indeed, resource allocation refers to the resources that are necessary for all operations of each organization, including ‘salaries, equipment, employees and so on’ (Daft, Murphy and Hugh 557).

Because of its importance, resource allocation should be based on a plan incorporated in a firm’s corporate strategy (Schermerhorn 138). Changes on a firm’s existing resource allocation can lead to severe conflicts if the changes attempted are not welcomed by one or more groups of stakeholders, such as employees or suppliers (Griffin and Moorehead 514). For example, a decrease of the rewards provided to employees for their performance can result to employees’ protests; these protests could cause severe delays in the completion of