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Potential Alternative Buyers/Competitor Research 1 Brian Nossokoff MBA-699-Q2843 Strategic Opportunity Mgmt 23TW2 4-1 Report: Potential Alternative Buyers/Competitor Research January 1, 2024 Dr. Robert Shindell

Potential Alternative Buyers/Competitor Research 2 Potential Alternative Buyers/Competitor Research When an organization can be a part of such a comprehensive tool like the NAICS Code system, it can help to identify competitors in the same industry. This will be highly beneficial in establishing a contingency plan for an organization planning to be acquired by another company. However, due to market instability and economic downturn, it is a good idea to establish a contingency plan in the event the company that was originally interested still backs out of the proposal. NAICS Code The North American Industry Classification System (or NAICS) is the standard used in analyzing statistical data related to businesses in the United States to allow for a high level of comparability (Murphy, 1998). In the case of a life sciences firm that produces cancer treatment medication, the applicable NAICS code would be 325412. Bringing up NAICS code 325412 yields quite a noteworthy cast of pharmaceutical giants, such as Pfizer, Abbvie, Gilead, Abbott and Johnson & Johnson. After utilizing the NAICS System, to find potential buyers in the appropriate segment will take some research into the company profiles of those in the same industry. The NAICS Cods will use segmentation approaches such as industry, end-use and purchasing approaches. Many advantages exist to using the NAICS Code system, such as the industry approach, which will provide better insight into the area of expertise. The end-use approach will help signify where and how the product or service can fit into the operations or supply chain, and the purchasing approach can give insight on the ways in which organizations prefer to purchase their items.

Potential Alternative Buyers/Competitor Research 3 Top Competitors The top three organizations that share the same NAICS code are Merck & Co Inc, Eli Lilly and Company, and Bristol-Meyers Squibb Company. To start with, Merck & Co Inc is a well-renowned pharmaceutical company that has a rich history that dates back over 130 years, same as the other competitors like Eli Lilly and Company and Bristol-Myers Squibb Company. Merck commonly holds a spot on the Fortune 500 listing which details the biggest companies in the United States based on revenue. Merck is commonly noted as one of the "Most Admired Companies" per Fortune magazine, a title they held for six years, from 1987 to 1993. More so than that, one of the most groundbreaking aspects that shows that the company is ready for such an acquisition is the distinction of being the only pharmaceutical company to be dubbed as one of Fortune's "100 Best Companies to Work For" every year since the inception of the list (Hawthorne, 2004). This distinction shows that Merck holds a stable culture that would help aid in the transition. Merck has been a crucial figure in the pharmaceutical industry for a long time, and with this kind of stability it will be around for even longer. The other two powerhouses, Eli Lilly and Company and Bristol-Myers Squibb Company are no slouches, as both boast impressive resumes. Eli Lilly has been around nearly 150 years at the forefront of the pharmaceutical industry. Engrained in its foundation was the need to establish quality medications without hindrance from others. Eli Lilly and Company commonly held scenario planning to ensure projects would remain resilient for the duration of their life cycle. This scenario planning was to ensure that the company was making the best decisions to ensure a sustainable future (Henderson, 2007). Research & Development (R&D) is engrained in the foundation of the company since its inception.

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Potential Alternative Buyers/Competitor Research 4 Finally, Bristol-Myers Squibb Company has nearly as lengthy a tenure as Eli Lilly and Company. Bristol-Myers has been around for nearly 140 years. Similar to Merck, is a regular part of the Fortune 500. It is when we start examining Bristol-Myers that we start establishing criteria for the ideal company to be acquired by. In 2002, the company had a monopoly on a cancer treatment, dubbed Taxol and was brought to court, where the company decided to settle instead of going through the case. Additionally, there are several other notable run ins with lawmakers that Bristol-Myers had been subjected to, stemming from things like accounting discrepancies that caused a $2.5 billion overstatement in sales over a three-year period. This overstatement had wholesalers with a $2 billion excess inventory (Parboteeah & Cullen, 2018). This somewhat routine occurrence of being subjected to lawsuits, regardless of reason, is a primary reason that detracts from how attractive it would be for our company to be absorbed by Bristol-Myers, mismatched core values. While these mismatched core values can potentially subject the new organization to a negative image in the public eye, this is not the primary reason to deter us from Bristol-Myers. The primary criteria of which would be the internal work environment, which based on research, Merck is clearly the leader in stability. This item is the most important because in such a volatile time, it is important to have the tools to account for the absorption of another company to address any hesitancy by employees. The next factor in consideration should be the type of markets that the company has a presence in. Does the company that will be buying us out have a reach in new markets? Will it help the company grow even more? Finally, the third most important criterion is the possibility of being subjected to bad public image. Which, being subjected to bad public image during such a volatile period can be problematic and spell doom for a company undergoing such a massive transition.

Potential Alternative Buyers/Competitor Research 5 Quantitative data aspects are not heavily considered as opposed to qualitative data. Items that arguably could have or should have been under consideration include, the number of staff members, total sales revenue or even items like click-rate for company website. While all three of these bits of quantitative data could be beneficial, it is not the best tool in determining a fit for the organization to be bought out by. Company Information Company Name Strategic Vision Primary product(s) or service(s) Overall market share Compound annual growth rate (CAGR) Merck & Co. Inc. Use innovation as the biggest driver of value for internal and external stakeholders. NuvaRing, Implanon, Januvia, Ketruda, Propecia, Fosamax 13.39% 14.9% Eli Lilly and Company Increase medication access for the world, while improving health care for people with limited resources and strengthening communities in an effort to address social issues. Cialis, Humalog, Cymbalta, Emgality, Humulin, Trulicity 7.97% 9.9% Bristol-Myers Squibb Company To be the top biopharma company in the world that reshapes patients’ lives through science. Eliquis, Sotyktu, Opdivo, Nulojix, Yervoy 9.20% 20.9%

Potential Alternative Buyers/Competitor Research 6 References Hawthorne, F. (2004). The Merck druggernaut: The inside story of a pharmaceutical giant. John Wiley & Sons. Henderson, R. M. (2007). Eli Lilly’s Project Resilience: Anticipating the future of the pharmaceutical industry. Murphy, J. B. (1998). Introducing the North American industry classification system. Monthly Lab. Rev., 121, 43. Parboteeah, K. P., & Cullen, J. B. (2018). Business ethics . Routledge.

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