Case #5 (Stone Container)

Case #5 (Stone Container) - times. The company has gone...

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FIN 450 Case # 5 Submitted by: Submitted to: Prof. Thomas J. Paup Date: October 31, 2007
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10/31/2007 The Problem Merck and Co. Inc. is a global research-driven pharmaceutical company that has discovered , developed, manufactured and marketed a broad range of human and animal health products. Merck & Co. usually team up with other companies to launch these new products. LAB Pharmaceuticals, a small company, has developed a new product called Davanrik that is supposed to treat depression and obesity. Unfortunately for LAB they don’t have the resources to complete the lengthy approval process and the costly manufacturing process. Merck & Co. needs to decide whether or not to team up with LAB or not. The three phase process involves a very large investment and a high potential for failure. Analysis of the Problem For Merck to make the correct decision about what to do it is important to calculate the probability of success for each situation. Recommendations SCC has been around since 1926 and has been through good times and through bad
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Unformatted text preview: times. The company has gone from a small paper company to one the worlds largest producers of paper products. Unfortunately in the recent years the industry has been going through a rough time and SCC has failed to adapt to the cyclical market appropriately. They are competing in too many fields and are leveraged way too far. It is my recommendation that SCC file for Chapter 11 Bankruptcy and begin the restructuring process under the guidance of the courts and their creditors. SCC is a big corporation and a lot of people have a vested interest in seeing this company succeed in the future. If SCC were to go ahead with any of the 5 options listed above I believe they would only be doing more harm over the long turn. They need to take a step back and evaluate which aspects of the business are best suited for them and thinking about getting rid of the other less important aspects of the business....
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This note was uploaded on 04/10/2008 for the course FIN 450 taught by Professor Paup during the Spring '07 term at Eastern Michigan University.

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Case #5 (Stone Container) - times. The company has gone...

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