admn417assign3 - LUNDBECK KOREA INTERNATIONAL GROWTH Jodi L Kieper Athabasca University#2719276 1 LUNDBECK KOREA INTERNATIONAL GROWTH 2 Executive

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LUNDBECK KOREA: INTERNATIONAL GROWTH1Jodi L KieperAthabasca University#2719276July 30, 2018
LUNDBECK KOREA: INTERNATIONAL GROWTH2Executive SummaryLundbeck is a pharmaceutical company in Denmark who is a leader in the central nervous system (CNS) market. Vice president Michael Anderson is tasked with the decision to reevaluatethe reporting structure for Lundbeck Korea, a unique market that places great value on cultural awareness and operates different from the other subsidiaries in Lundbeck Asia. Lundbeck is preparing to replace its established CNS drug Cipram with Lexapro, and the timing and implementation of Lexapro’s introduction will greatly determine the extent of its success and Lundbeck’s establishment in the Korean market.Problem StatementMichael Anderson must choose whether Lundbeck Korea will continue to operate under Lundbeck Asia and Asif Rajar and proceed with the roll out for Lexapro as part of the switch over from Cipram, or follow the Korean recommendation of keeping Cipram in the market for another four years, then introducing Lexapro, having Lundbeck Korean and Jin-Ho Jun report directly to Anderson in Denmark. AnalysisLundbeck is a leading central nervous system (CNS) (exhibit 1) pharmaceutical company in Denmark. Lundbeck Korea was reporting under the Asian structure, but Jun was looking for the opportunity for expansion. In less than three years, the Korean division had experienced an enormous growth; the unit was not yet a profitable business unit and still needed a lot of monitoring. The nine largest firms in the industry help nearly 60% of the CNS market sales (exhibit 2). Patent protection offered a range of zero protection to 20 years of exclusive production rights on a drug, and varies based on location. In the United States, protection starts when the drug is
LUNDBECK KOREA: INTERNATIONAL GROWTH3patented. In South Korea, patent protection starts when the drug is launched. The timing of patent protection and introducing a drug to the market is critical to the drug’s success, and sales are known to plummet after a patent expires. One drug often dominates the sales and revenues for a company, and the larges class of drugs in the CNS market is for antidepressants. Market growth rates for the Asian market are demonstrated in exhibit 3.

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