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Glaxo’s story was very different. Founder Joseph Edward Nathan, with his brother-in-law created the company as a general merchant in 1861
• Due to good marketing campaign waged by his son Alec.• Opened new subsidiary in 1905 to commercialize a patent he had purchased for manufacturing dried milk. • It was to be the first time firm exploited someone else’s invention. . the company quickly became Britain’s leading supplier of dried infant milk.
Glaxo introduced Zantac. . Tagamet. and Eli Lilly. Pfizer. • Zantac had no remarkable scientific or medical advantage over Tagamet. • the leaders were SmithKline. the ulcer medication in 1981. • Glaxo was a latecomer. The only difference was that Zantac was packaged in such a way that fewer pills were required each day. launching Zantac five years after Smith Kline's best-selling ulcer medication.• Seventy-six years later.
• As the pioneer.• According to conventional wisdom in the industry. zantac could never win more than 50% of the market. SmithKline had already invested in educating doctors about the new type of ulcer medication • Glaxo’s market research indicated that doctors viewed Zantac as “another Tagamet” • Glaxo’s salespeople therefore could concentrate on promoting the benefi ts of Zantac versus Tagamet. . • Glaxo decided to put a price premium on Zantac to stress its superiority over Tagamet.
• Throughout this time.SmithKline continued to invest heavily in R&D. but Glaxo fared much better in terms of sales and profitability • it was eventually able to purchase its more innovative competitor in 2000 .
Shell was very much a one-man band.SHELL • In the years before World War II. . • the corporation prospered and became one of the main rivals to the great American oil companies that emerged from the breakup of the Standard Oil Trust. • Henri Deterding had led the merger in 1907 of his Royal Dutch Petroleum Company with Shell Transport and Trading to form the Royal Dutch/Shell Group.
he retired in 1936. • Deterding visited Germany frequently and eventually married a German. • Unfortunately. . whom Deterding saw as the man most likely to preserve Europe from the Communists. • Luckily for Shell.• Deterding’s strong personality and impressive record gave him a position of unchallenged power inside Shell. before he could make any commitments that would have embarrassed the company later on. it also put him in a position to consider financial and moral support for Adolf Hitler.
the board installed a Committee of Managing Directors as the top executive authority in the company . • In 1964.• The company did not forget its narrow escape: Deterding’s successors were never allowed to be so powerful. • Instead. the board rejected advice from McKinsey & Company to install an Americanstyle chief executive officer.
Shell’s CEO. .Its chairman was only marginally more responsible than its other members. it has remained remarkably careful to avoid placing an authoritarian leader at the top. following a crisis triggered by the company’s overstatement of its proven oil and gas reserves – has Shell opted for a classic CEO leadership model. in describing this transformation of the governance structure. even now. Still.
• Doggedly repeating its mistake. those assets lost value. which accounted for fully 75% of the company’s oil supply. appears not to have drawn any lessons when in 1951 Iran nationalized its assets. it embarked on a new elephant hunt and is now as heavily dependent on sites in Russia and other former Soviet states as it was on its Iranian assets. • After receiving compensation two years later following a coup. and BP found itself caught short again.• BP. • As oil prices plummeted toward the end of the 1990s. • ending up heavily dependent on a small number of sites in • Alaska and the North Sea. . in contrast. BP failed to diversify its asset base significantly in the ensuring decades.
it is clear the company has not taken the lesson to heart.Although BP has already suffered dramatically from its failure to observe the principle of diversification. It is striking how easily then-CEO brushed off concerns about taxes and the role of the Russian state. and a settlement is reached” . Discussions usually take place. "The temperature always keeps changing – from cold to medium. but the back taxes were sorted out for 2001. and I expect there will be further large claims in 2002 There are many other places in the world where large claims are made.