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1) What are the environmental changes which triggered Millennium to integrate forward? Critically evaluate the decision.

Millennium was different from most other biotech firms that usually became dependent on large pharmaceutical firms because they did not have the resources to take their products to market or have a broad technology platform. (Entry barrier: as it required huge investments and technological capabilities) Millennium sought to build varied technological capabilities i.e. a broad technology platform to developing biomolecules targeting diseases. During the 1990s the field of biology and technology evolved and scientists made significant progress in mapping the DNA of the human genome. Firms invested in such discoveries as it was the future of drug discovery. Traditionally firms were focused on chemical compounds to treat symptoms of diseases ,the new biotechnology firms identifies biological targets responsible for the disease and develop molecules to prevent or cure such diseases. Blockbuster drugs were going off patent, increasing competition and emerging drug industry and falling productivity in the increasingly expensive and time consuming R&D processes. Rapid evolutions of genetics and Information technology which Levin envisioned combining at Millennium, address diseases at their root causes, rather than simply identifying and treating their symptoms. Millenniums response to such an environment was to be agile, adaptive and innovative. Levins founding team included university professors who had immense experience or were the first work on human genome. He hired top tier researchers and medical doctors from places like Harvard and MIT. Levin combined hard sciences with powerful computer systems and industrialized drug discovery process with tolls such as RADE. He wanted to revolutionize the pharmaceutical industry by drastically increasing the speed, effectiveness and cost of drug discovery. This gave Millennium a head start over the competitors in early stage of drug target identification. This also allowed it to forge alliances with big pharmaceutical firms giving it a distinct competitive advantage. The primary disadvantage of securing funding through alliances & partnerships is that it limits an organizations ability to allocate resources as it seeks to do so. Thus every alliance has to be made keeping in mind what the companys vision is. This is quite difficult to implement because once an organization enters into an alliance its revenue stream is dependent upon its ability to fulfill the goals set at the outset of the alliances. Thus organizations may seek to fulfill these goals even if it means deviating from the objective.

On the other hand deals & alliances ensure that the organization manages it resources effectively because it has to meet its deliverables. This is different from raising money from the capital market. In this case once an organization has been successful at raising money through the market it is relatively free to utilize it as it seeks to do so. This could lead to an inefficient allocation of resources. Raising money also means giving away ownership rights to the organization. This would mean that the new equity holders will have a say in company strategy. This can hamper an organizations ability to choose what it believes to be the best course of action.

2) Critically evaluate the direction and the processes adopted by Millennium to become a fully integrated pharmaceutical firm.
In order to increase the scope of operations for Millennium, co-founder and CEO Mark Lewin began to steer Millennium away from early-stage discovery alliances and towards drug development and commercialization. Reasons for this change: Their competitive advantage was waning as information, technology and tools became more widely diffused in the market. Millenniums partners learned from them over a period of time. The human genome, once held by a few biotechnological firms was now moving to public domain. Now given that moving downstream became a necessary requirement for long-term survival and organic growth will be time consuming and difficult, Levin focused on a series of mergers and acquisition to make Millennium a fully integrated pharmaceutical firm in a short span of time. This led to series of acquisitions to acquire competencies through inorganic route. Its rapid evolution was widely accepted by the market and stock price moved up tenfold. Such a fast paced acquisition of business which one has limited experience of managing has its own set of perils. Millennium was acquiring downstream business which would only increase its spectrum of drugs and add to its intrinsic competency. Integrating such a business to the existing is huge challenge as the cultures inherent to both the organization were diametrically opposite. Millennium rapidly moved from an informal structure to formal structure as it gained size. Resource allocation in the newly formed entity would be challenge for Millennium. Such changes should be gradual and monitored at regular intervals by the top management for effective execution. Monitoring such a change process would give top management time to adjust the strategy optimally during the change process. Millennium hopes to create a sustainable competitive advantage by creating an unrivaled drug discovery & development process. It has invested significant time & effort in making the process as efficient as possible. The success of this process was going to determine if Millennium would become a fully integrated pharmaceutical company in the future.