Roche-Genentech, Case Study Example

Strategic Controls

Business and operational strategies are crucial for the development and growth of any given company. Roche, owner of Genentech has the opportunity to apply a number of strategic controls to ensure the company remains on the profitable path. These controls are integral in monitoring the manner in which strategy is developed and implemented.

Premise Control Strategies

The company has formulated a strategy that is based on the premise that oncological medicines are in considerably high demand. The company has developed and planned its production process based on these premises. However, the current situation with the National Institute for Health and Clinical Excellence (NICE) necessitates the implementation of premise control measures to mainly track industry factors. The industry’s competitors are quickly adjusting to the market trends and needs. The company needs to adjust accordingly or risk losing market share. There are numerous substitutes in the form of biogenerics. The company has to restructure its strategy based on biogenerics in the market.

Global Strategy

Genentech, while a predominantly successful company, has failed to develop a concrete global strategy that would allow it to realize its optimal potential The Company currently has a problem with one its flagship products Tarceva. The drug had seen sales of $457 million in 2008 (Rothaermel).however, owing to the lack of approval by NICE, the product faces a challenge maintaining global sales in the coming financial year. The company requires a global strategy where the product is the same in all the markets its services. This will centralize control and reduce costs. Furthermore, such as strategy would enhance product development through coordinated activities from all of Roche’s functional units globally (Verbeke). This also enhances the benefits of cross-functional synergies within Roche’s functional units.

Corporate Strategy in Acquisition

The acquisition of Genentech by Roche, reveals Roche’s corporate level strategies. The company appears to have adopted a growth strategy on the corporate level. The company has opted to diversify the markets within which it is involved in by acquiring a company that is mainly in the oncological medicines market. This has increased and diversified the number or products that its offers, increasing its market share, relative to its competitors. This strategy can also be perceived as a value-creating strategy (Hill, Jones and Melissa). The company has maintained Genentech as an independent functional unit but has transformed its leadership and even possibly organizational culture.

Organizational Structure

Roche’s corporate strategy is a value-creation growth strategy. As such, the company is best suited adopting a Matrix organizational structure. This type of organizational structure allows the company to group employees from its different functional units by both their function and product output. This type of structure would have tasks assigned to functional teams that come from all of Roche’s functional units, including its headquarters. The creation of such synergies between functional and cross-functional units allows for the realization of economies of scope as well as economies of scale that is associated with the merger of Genentech and Roche.

The company is best suited adopting a balanced-functional matrix. This organizational structure entails a project manager assigned specific tasks, sharing power with functional managers. This maximizes the benefits of projects and enhances research and development within Roche and its functional units. Matrix management is vibrant and requires input from all of the company’s functional and project managers. Furthermore, this type of structure would foster specialization within the organization.

Works Cited

Hill, Charles W, Gareth R Jones and Schilling A Melissa. Strategic Management: Theory: An Integrated Approach. Stamford: Cengage Learning, 2014. Print.

Rothaermel, Frank T. Strategic management : concepts and cases. New York: McGraw-Hill-Irwin, 2013. Print.

Verbeke, Alain. International business strategy : rethinking the foundations of global corporate success. 2nd. Cambridge: Cambridge University Press, 2013. Print.