Executive Summary
During the 1950´s, Mr. Merck made it clear that Merck has its competitive advantage because they stay true to their strategic vision, which is “medicine is for the people, it is not about the profits”. These days, the pharmaceutical business as a total faces challenges of constantly increasing their drugs. But at the same time keep the research and development costs low. The Merck company’s answer was to merge and upgrade its drug pipelines, by reorganizing to reduce the costs and by donating drugs to hopefully come at the same level with the less developed countries. Merck’s key strategy to survival was that they had the skills to create above average returns, they produced high quality drugs and their service improved the human kind.

Company Background
The background of Merck & co, which was headquartered in Whitehouse Station, New Jersey, is the 3th biggest pharmaceutical company by 2009. The company was founded in the USA during 1891 by Mr. Merck, the firm is mostly known for its drugs, but also for its cutting-edge research, innovative chemical syntheses and medical manuals. Merck was organized into three divisions, animal medicines, consumer health and the pharmaceutical department. In 2009 when the merged with Schering Plough, the new Merck consists of over 100.000 employees all over the world

Analysis of External Environment
If we look at the drug industry it is very hard for a new starter to set up a business, the entry barriers are just incredibly high. Companies that try to join the pharmaceutical industry usually start without thinking globally, and produce limited drugs and medicines. The problems are the amazing high R&D costs, and the high change of new medicine failure. Also they got to stay within the patent rules and disputes, it is very hard for a company like that to effect the market leaders. Than when Obama’s healthcare plan came, it created doubt about the future regulations and revenue restrictions that may have influence on the pharmaceutical industry. The pharmaceutical industry recently came to Wall Street’s concerns through mergers and restructuring. Merck also has competition as it comes to research, the government and non-profit organizations, also university’s with research programs form danger to Merck & Co. The positive thing for Merck is that these organizations/companies are not really product driven.

Analysis of Internal Environment
The big drug companies have their reputation and the resources that are necessary to be attractive for the brightest doctors and professors around the world, this maintains the capacity for constant upgrading and innovation. An example is that the salary of employees overall are allot more higher that the non-pharmaceutical companies. Pharmaceutical employees make sure the gap with other firms and institutions is small so they can widen their network easily and get ahead of the smaller competition in the pharmaceutical industry. The disadvantage of it all is that u need a huge bureaucracy to organize these large numbers of drug personnel which results in significant decision making inactivity. If we take this all together it is key to have talent, product differentiation, and innovation to have core competencies in the drug industry.

Identifying the competitive advantage of Merck & Co.
1. Effects of most recent merger with Schering-Plough
On the 3th of November in 2009, Merck had a successful merge with their former rival, Schering-Plough also known as (SP). The main objective was to refresh Merck’s pipeline to get a bigger market appearance in all the technology’s like: biologics and neuroscience. Schering-Plough expended their core offerings by applying consumer and animal health products. By the time it was the 30th of July, Schering-Plough pipeline contributions in phase 2 and 3 had a range from allergies until schizophrenia. These diseases where marked as absolute critical as a target for the future.