Eli Lilly and Company
This case emphasizes:
The difference between a) the trajectory or path over time of increases in performance
improvement in an industrial segment which consumers demand or want (trajectory of customer
need); and b) the improvement over time in the level of product performance that technologists
can provide (trajectory of technological improvement) in a product.
How the criteria customers use to choose among competing products changes (the evolving basis
of competition), and dramatic results when the technology available (b above) has overshot
what customers want?
We do this by studying the history of Eli Lilly and Companys efforts to develop new products and services for the diabetes care market, a field it had originally pioneered, and some of the successes and failures it had as the market itself evolved.
Lilly invested heavily to maintain its dominant position as an insulin manufacturer, but began to see its worldwide position weaken despite its efforts. In addition, there were several other waves of innovative opportunities in the diabetes care market that Lilly had already missed. Lilly at the time of the case was engaged in a determined effort to strengthen its position in insulin and grow beyond that single product into other products and services. In particular, the case describes Lillys intent to participate, in some way, in the huge market opportunity created by patient noncompliance, and thereby increase demand for insulin. Note that there are four particular classes of innovation explored in the case: Improvements in insulin; Delivery devices (pens and injection devices); Meters and technology to measure blood glucose levels; and the development of products or services for education and behavioral change among patients with diabetes.
In addressing and discussing the outcomes of the questions below about what Lilly did wrong, and about how it should approach the current decisions, remember to use the readings and concepts from the course , for example those on the shifting basis of competition, about how to best explore new opportunities, and the reading on Big Companies Need to Act More Like Startups.
1. Review the history in recent years of Lilly that is presented in the case: what mistakes did Lilly make in
its product and service initiatives, and why did this happen.
2. Is Eli Lilly & Co. talking to the right persons or groups to determine what product features or
advancements would be most appreciated by the diabetes related market? Explain your answer.
3. WHAT SHOULD WE LEARN FROM THIS CASE?
Think about broader issues raised by the Eli Lilly and Co. case (Innovation in Diabetes Care) and in the Exubera Mini-case. Eli Lilly and Pfizer are two leading pharmaceutical companies that spent enormous capital and organizational energy on developing potentially exciting and innovative products that their customers ultimately did not want or could not get appropriately reimbursed. Both failures were quite remarkable with Eli Lilly and Pfizer banking huge losses and taking strong hit to their market share and reputation (especially Pfizer).
So, what when wrong and why? How could two worldwide pharmaceutical industry leaders Eli Lilly and Pfizer with vast resources and expertise in the field make such massive miscalculations of the market’s demand for Humilin and Exubera? How can big established organizations do a better job in avoiding such kinds of issues?Please do not just repeat the case and mini-case discussions of the week, but move onto how these problems can be addressed in other large successful professionalized organizations, especially, but not limited to, big Pharma. Be prepared to focus on both substantive (e.g. methods of better understanding the shifting basis of competition and other broader factors in an industry such as emerging new technologies, business models, and “arenas” of opportunity a la McGrath, 2013) and organizational factors (e.g. how companies structure, manage, and incentivize their efforts).
Structure and Formatting Requirements for Individual Assignment Papers
All assignment papers in the Course should useAPA formatfor formatting and citing in the body of the Paper that is at least: should be typed, double-spaced with 1″ margins on all sides using 12 pt., Times New Roman font. Include a page header (also known as the “running head”) at the top of every page. To create a page header/running head, insert page numbers flush right. Then type “TITLE OF YOUR PAPER” in the header flushes left using all capital letters. The running head is a shortened version of your paper’s title and cannot exceed 50 characters including spacing and punctuation.
Word limit requirement is enforced: your paper should be at least750 words, and no longer than 1000 words.
Assignment papers should have clear structure including:
Title Page that should have title of your paper; author’s name; Institutional affiliation – Boston University; MET AD 741; and Date.
Abstract that gives a concise summary of the key points of the paper. Abstract should be not more than 100 words (note: do not count towards the total word limit for the Assignment paper)