Business management · 2010 · Paper 1 · HLSL · Case study

M&N10/3/BUSMT/BP1/ENG/TZ0/XX/CS BUSINESS AND MANAGEMENT CASE STUDY: N-PHARMA For use in May and November 2010 INSTrUCTIoNS To CaNdIda TES • Case study booklet required for Higher Level Paper 1 and Standard Level Paper 1 Business and Management examinations. 2210-5001 ; 8810-5001 9 pages © International Baccalaureate organization 2009 M&N10/3/BUSMT/BP1/ENG/TZ0/XX/CS 2210-5001 ; 8810-5001 – 2 – N-PHARMA 5 10 15 N-Pharma is one of the biggest multinational companies (MNC) operating in the pharmaceutical industry. It employs over 30 000 people globally. The corporate headquarters are in Tsukuba Science City near Tokyo in Japan. History N-Pharma was founded in 1973 by Y ukio Nakamura, a Japanese chemist. It began as a small laboratory in a suburb of Tokyo employing nine members of staff. It was set up as a private limited company. In common with most other start-ups, poor cash flow meant that the early years were financially challenging. Costs were high as Y ukio was developing a new type of painkiller, Pharmax, which was launched in 1977 to widespread acclaim. From this point, sales rose rapidly and high profits enabled Y ukio to expand his business. Within three years, the number of people employed by N-Pharma grew from 9 to 200 employees. Throughout this period of expansion, a key feature of Y ukio’s management philosophy was to maintain close relationships with suppliers. Since 1980, the business has continued to grow. A combination of strong demand in the mid 1980s and a period of economic boom in Japan enabled N-Pharma to expand within the Pacific Rim. In 1986 a subsidiary was established in Seattle, United States (USA), followed by another in Canberra (Australia) two years later. N-Pharma has also opened smaller subsidiaries in other countries such as Canada, Mexico, Chile, Vietnam, South Korea and New Zealand. Subsidiaries are responsible for both production and distribution of N-Pharma drugs in their national markets, as well as research and development (R&D). 20 25 Product development In the pharmaceutical industry, R&D departments have a critical role in ensuring successful innovation. New product development can lead to competitive