Alliance Partnership for the Xtrican Book Report

Value creation

Wilson had the built-in sales structure to increase demand amongst physicians and established knowledge of how to reach competitors. Crawford-Beckman had the drug that Wilson desired. Crawford-Beckman, as a small company, wished to develop more pharmaceutical products, and the agreement also specified the two companies would co-develop a ne drug in the future. The companies would remain separate in structure, but a new structure would be created to support their partnership with specific delegation of responsibilities within the team. The joint divisions were, in general, partnerships of equals.

However, problems arose regarding the idea that both companies were supposed to equally support and share in the costs of marketing the drug. Wilson resented the greater investment it had made in terms of its pre-established resources into marketing the drug and Crawford-Beckman resented the burden it felt it was being forced to shoulder by a larger competitor.Each company had its own separate planning process, and the jointly-managed team did not 'smooth over' the different interests of the two companies to a great enough degree to curtail the resentment both entities felt, despite the early successes and the approval of Wall Street in terms of stock value.

Given the expense of bringing a new drug to market, generating synergies seems essential for both companies, if they are to survive. The diabetes market is one of the most lucrative and growing demographics. However, a more defined way of balancing the expenses, particularly of the marketing (which is Wilson's field of expertise) is essential if the….....