Learning from the Pharmaceutical Industry

In 2007, Dr Bina Montemayor, senior partner of a large multinational consulting company stared absentmindedly at the display of her new notebook. She had just received an e-mail from Astellas’s European Vice President for corporate strategy, Mr Tadashi Yukino, asking her to prepare some notes for the annual board meeting at Astellas’s European headquarters in London. The e-mail explained that the board was especially interested in Dr Montemayor’s assessment of Astellas’s current European strategy and matrix management system, which had been newly introduced by Astellas’ European Vice President and his team two years ago. Contrary to early enthusiasm, results of Astellas’s regional strategy and design were disappointing: flat sales coupled with accelerated pressures from both local and international competitors raised questions about Astellas’s strategic focus. Many analysts questioned whether it made sense for Astellas to pursue a regional integration strategy in a highly fragmented region such as Europe, which was clearly dominated by individual country markets such as Germany or France. The strategic problems were aggravated by organizational concerns: the double reporting system of Astellas’s newly introduced matrix increased coordination efforts and was sagging employee motivation tremendously. The pressure was felt at all levels. As a result, Mr Yukino wrote, the board had to decide whether or not to put an end to Astellas’s current strategy and design.