Project Management. Zeropain Project case Essay

Project Management. Zeropain Project case - Essay Example Acquisitions offer one of the quickest ways for a company to grow and improve performance; they also represent the largest area of risk taking. The acquisition of Teutonia Pharma AG by Alpex was a case of a ‘horizontal’ (DePamphilis, 2002, p7) acquisition where both companies were in the same line of business with the intent of finding operational synergy and an effort to diversify into higher growth products and markets. The fact that Teutonia owned a licence from CPW for the European market made it an attractive preposition for Alpex. However, Alpex paid a premium on the basis of sales projections of a product which was not even tested by the original manufacturer. Roll (1986) argues that takeover gains are overestimated, if they exist at all. Any bids made over the market price represent an error and are made on the basis of an overbearing presumption by the bidders that their valuation is correct. The entire handling of Zeropain represents an attempt to justify the acquisition. The basic rules for the testing, positioning, promotion, and launch of a product were ignored by Alpex management – to disastrous consequences. New products are the ‘lifeblood of the research-intensive pharmaceutical industry’ (Taylor et al, 2002, p106-7). Given the huge cost of development, in this case the premium paid, and limitations placed on patent protection at the time of approval for marketing, the need to bring products to market quickly is very real