Submitted by: Submitted by rebekiahh
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Category: Business and Industry
Date Submitted: 05/05/2012 09:42 AM
The Rise and Fall of Merck
A Business Analysis
Brief History
Who would have guessed that a little known apothecary purchased over 300 years ago in Darmstaat, Germany would be the starting point for one of the largest pharmaceutical companies of all times? Amazing as it may seem, that single purchase, made by Friedrich Jacob Merck in 1668, was the beginning of the company known today as Merck Pharmaceuticals (Funding Universe). The 1827 transformation from general apothecary to drug manufacturer occurred under the leadership of Heinrich Emmanuel Merck, and was a turning point for the company. In 1887, the first Merck office in the United States opened up under the helm of George Merck, the grandson of Heinrich. For many years, this office operated as a publicly owned company. During World War I, George feared that anti-Semitism toward the German based company would cause a catastrophic failure of the company, and decided to turn a large chunk of control to the Alien Property Custodian of the United States. By 1919, the portion of Merck that had been turned over to the Alien Property Custodian had been sold, and with George retaining control of the corporation, the company was once again publicly owned.
In 1924, George W. Merck, the son of George Merck, was given control of the company. His focus was to find a way for Merck to gain a larger portion of the pharmaceutical world. By the year 1927, the younger George agreed to a merger with Powers-Weightman-Rosengarten, another pharmaceutical company that had gained success for the discovery of the antimalarial drug quinine. After this merger, the joint business was incorporated as Merck & Co., Inc. This merger allowed for sales to increase by $7 million in less than four years.
The decade of the 1940’s left Merck struggling. Foreign competition increased, as did competition here in America. More and more pharmaceutical companies were emerging, building on the prior discoveries to...