Israel Case Analysis: Wellcome Israel

¶ … Israel

Case Analysis: Wellcome Israel

Situation Analysis:

The process of corporate acquisition and merger is typically extremely complex. It is exponentially more so in the case of Wellcome Israel, a pharmaceutical division of Promedico, a payee of Wellcome Hellas and a prospective addition to Glaxo. These overlapping forces have created a particularly challenging scenario for CEO Ozra Sherman, who must navigate Wellcome Israel through a decidedly uncertain period. This is true in spite of the company's excellent performance, or perhaps one might argue, even in light of it. The profitability of Wellcome Israel has been ironic for a number of reasons, not the least of which is the relative struggles of its parent company in Promedico. This was true to the extent that Wellcome Israel accounted for no less than 50% of all sales from the company's pharmaceutical and diagnostics division.

An additional irony is Wellcome's success in a country which has largely remained incognito within the context of the company's literature. Because of Wellcome's emphasis on sales within particular Arab country markets, the nature of its operations in Israel are subject to a great deal of political pressure. The result is an operation that has been shrouded by the presence of the parent company Promedico. It was becoming clear beyond a reasonable doubt though, even before the imminent approach of Glaxo's buyout, that this was a scenario which simply could not be sustained. As Wellcome Israel continued to enjoy not just a high degree of success but a significant amount of internal harmony, operational functionality and high morale, its presence within Promedico remained uneasy and best and poorly matched to the parent company's limited capabilities at worst.

Recommendations:

This precarious situation could not have been demonstrated any more amply than by the discussion which would pass between Sherman and Braverman of Promedico. In decidedly threatening language, Braverman would inadvertently help to goad Sherman toward some key decisions. Ultimately, the recommendations here emerge there from. Specifically, in his threatening language, Braverman reveals that Promedico is decidedly weakened by Glaxo's threat at a hostile takeover. The discomfort between Wellcome and Promedico has reached a fever pitch and it is incumbent upon Sherman to take all necessary steps to help facilitate a handover to Glaxo.