Tuesday, November 20, 2007

Should you buy Alcon, Inc Stock?

Executive Summary

For about 62 years Alcon, Inc. has been around the drug industry and since its foundation its growth has been geometric. Who could believe that a little drug store would become the giant Alcon of today? What we will see in the following research is a company that through continuous dedication has succeeded thanks to the collaboration effort its leaders seeded since the foundation of the corporation. It was through its called strategic partnership to an efficient and effective enterprise layout of a divisional structure that Alcon moves around quickly.

But what triggered its rapid growth and keeps the company in business? There is more than one explanation, however just like in a theater is only behind the curtains that we can see how the preparation and dedication of the artists make a successful show; it is underneath Alcon’s surface that we will see how a differentiation strategy and a focused team into preserving and restoring vision worldwide makes a difference. At Alcon’s headquarters we can only see a very organized team transforming raw material to finished good for further delivery to locations worldwide with high standards of productivity and employee efficiency.

There is a very competitive environment for Alcon, since its flourishing market keeps attracting new entrants, but Alcon dominance of the market makes it difficult for new entrants to compete against a corporation that has developed not only economies of scale, but its tem is incredible efficient due to the fact that they want to be around Alcon for a long time and their experience has been reflected into the production improvement that lets Alcon supply efficiently its worldwide demand.

From all countries where Alcon operates, there is only one mission accompanying the core of development, and it is the passion of employees for helping the world see better.

Company Information

Alcon was founded in 1945, and named after their founders Robert Alexander and William Conner, which syllables combined gave birth to what it is now one of most prosperous companies in the United States. Alcon is owned by Nestlé S.A. in its majority with 75 percent ownership of the company stock, but incorporated in Hünenberg, Switzerland with its base operations in Fort Worth, Texas. With more than 13,000 employees worldwide, Alcon operates smoothly developing, manufacturing and distributing eye care products on its three divisions –Surgical, pharmaceutical, and customer vision care.

Alcon’s vision and mission are summarized into keeping the company competitive through innovation, high quality control standards, and balancing between its efficacy and efficiency of its product development. Its research and development, and marketing and sales force are dedicated to boost the sales of Alcon’s products in the worldwide market which is successfully achieved with 403.1 million dollars of income generated from operations.

The corporate governance of Alcon is well established and described in its company website, where the company made sure its code of conduct includes the values and behavior that are appropriate and not appropriate for every employee from the bottom to the top executives. Part of its code of business, conduct, and ethics reads, “No employee, officer or director shall retaliate against anyone, who in good faith, reports what they suspect to be illegal or unethical behavior.” (1) In order to enforce ethical behavior within the company Alcon’s Board of Directors and committees are divided into Audit committee, Compensation committee, and Nominating/Corporate governance committee whom together ensure transparency in its internal and external operations and financial reporting.

External Environment

The pharmaceutical industry in the United States is one of the biggest industries in expansion. With thousand of customers worldwide with the need of being healed from different illness, the pharmaceutical industry together with the health care industry have flourished due to the overwhelming demand for new and improved medication. Alcon, Inc. is a company dedicated to the research, development and production of eye care products that preserve and restore vision. Alcon, Inc. reported in its consolidated Income Statement of March 31, 2007 income from operations of 403.1 million dollars. However, which factors have favored the growth of Alcon in the United States? Some factors are analyzed below.

Demographics: The aging population in the United States has increased and with it the need for health cares. Most elderly have vision problems and Alcon supply very efficiently surgical, pharmaceutical, and eye care innovating products. In the worldwide arena, the few companies that develop pharmaceutical products are few and Alcon seems to have taken advantage to a worldwide market with few competitors.

Sociocultural: The greater concern for heath have pushed the demand for all sort of health products, but eye care have always been of great concern among the citizenry.

Political/Legal: The incorporation of different countries into the global market has turned into free treaties with more countries that facilitate foreign investment. This panorama have been favorable since the President was granted fast track authority and countries like Chile, Peru, Brazil have negotiated treaties with the United States. Alcon has been benefited since its cost will significantly decrease in such countries.

Technological: The technological breakthrough of computerized systems into medical equipment has boosted the development of surgical products in Alcon. Examples of such innovations are the INFINITI® Vision System, which is a more effective cataract lens removal due to its computerized equipment and software. Also, the invention of contact lenses has created a market for the need of contact lenses care fluids, disinfectants, and other products that Alcon produces effectively.

Economic: In the United States the stability of the economy in these years have created an economic environment that fosters inversion, and in recent weeks the announcement of the Fed of lowering interest rates are good news for everyone including Alcon.

Global: The economic improvements in several countries in which Alcon operates due to International Trade improvements have made possible for more people to afford the cost of the medications and eye care products. The intensification of Global Trade has considerable lowered transportation, and operation costs for Alcon.

The treat of entrance in the pharmaceutical industry is low, due to the large capital involved in acquiring the necessary equipment for the development of finished product. Besides the large capital requirement, potential manufacturers have to compete against the giants Alcon, Novartis, and many others drug manufacturers in the United States that enjoy the benefits of economies of scale that their prolonged presence in the market has given to them.

Competition within the industry is high. Even though the treat of entrants is low, there are a large number of competitors well established in the pharmaceutical market. The flourishing market attracts foreign investors with large capitals, and companies like Allergan Inc., Bausch& Lomb Inc., Novartis AG, Medical Instruments & Supplies, and many others compete against each other to gain a greater share of the market pie. However, Alcon seems to have focused on quality standards and a good customer service following a sale.

The treat of substitute is low, because the herbal medicine alternative has not been proved to be more effective than pharmaceutical medicine, and surgical procedures relays heavily on the innovating products companies like Alcon can provide.

The power of suppliers is low, because even though there are many pharmaceutical companies only few have dominated the market. Subsequently, giants like Alcon can put pressure over manufacturer’s prices. However due to the symbiotic approach Alcon has over its suppliers and the innovative nature of their products, Alcon happily pays a reasonable price for a responsive supplier who can help reduce the gap generated by the market mediation costs.

The power of buyers is low, because of the few substitutes for eye care pharmaceutical, surgical, and eye care products. Thus, customers have to pay the premium price for the medicine they need.

Alcon seems to have developed a good relationship within its value net, and most of their expansion worldwide seems to be strengthened by its partnership strategy. There are few substitutors for the products Alcon develops, and its products are hard to imitate without expending millions of dollars in research and development. Alcon’s complementors seem to work together with Alcon in order to improve revenues for everyone. Example, if you have contact lenses you better have OPTI-FREE® RepleniSH® Multi-Purpose Disinfecting Solution (MPDS). Suppliers are being paid a fair price for their raw material, and customers are being delivered a high quality product at a price determined by the market.

Internal Environment

The Value chain analysis of Alcon, Inc. can help reveals how this corporation is organized in such efficient manner that boosts its growth.

Firm Infrastructure: The company culture of the company is concentrated on develop and improving a product that can improve and preserve vision worldwide. Administration of Alcon is always striving to reduce overhead which will reduce expenses overall the company. The relationship with its stakeholders has been always important for this company and its suppliers are aware of Alcon productivity through Alcon’s software which integrates its supply chain for an efficient distribution of raw material and finished product. The fact that the company is concentrated in the sole goal of vision health care has strengthened its corporate mission and keeps it focused.

Human resources management: Alcon’s Human Resource team is focused on recruiting the best talent from the market, so in order to insure high quality employees Alcon utilizes the services of stuff companies like Manpower, and Adeco Co. in the United States. One of the policies of these companies is that potential employees have at least high school diploma or its equivalent. After recruiting the best candidates, Alcon provides a lot of benefits for the employees that worked hard and became Alcon employees, such employees includes comprehensive insurance, tax-advantage reimbursement, paid time off, retirement benefits, and others. This is a strength the Alcon has, since educated employees reduce the amount of training and human error within the production cycle.

Technology Development: In order to insure Alcon’s product innovation, Alcon’s laboratories are equipped with high technology assembly lines, sterilization machines, electronic equipment and software capable to monitor temperatures of the machines processing chemicals. Alcon enjoys top of line high technology which is necessary for this type of industry, and gives it the potential to compete with other pharmaceutical companies

Procurement: The purchasing of materials, suppliers, and equipment are made in a very efficient way. Suppliers participate on Alcon’s bidding process and at least one or more suppliers are small business due to its small business development goal. After that process, suppliers are chosen from Alcon’s database based on their reliability and prices. These suppliers must meet Alcon’s specification requirements. A good relationship with Alcon stakeholders gives this company a strength that increased the company good reputation.

Another perspective from which Alcon seems to pick its suppliers comes from the fact that the products Alcon develops are innovative, so its suppliers also have to be responsive in order to be able to satisfy its hard to predict demand. The market mediation expenses, which is the opportunity cost lost of sales or excess of inventory can be costly, thus suppliers can play an important role in reducing Alcon’s operating expenses.

Inbound logistics: Raw materials are received at the inbound dock and classified after being scanned with a laser gun by the forklift drivers and warehouse manager. Raw materials are immediately distributed from the unloading area to the production lines by material handlers with warehouse pallet jacks in order to avoid accidents that could be caused by the use of forklifts in traffic areas. This policy is a strength, because it reduces the number of accident at work, which could end in legal suits against Alcon and other medical related expenses.

Operations: Raw materials are properly distributed to the different production lines. Some lines sterilize the empty bottles for it further processing and bottling process and other machines put labels to the medicine bottles, seal the top of the bottles, put inserts inside its boxes and packages the finished product in package boxes. This process is synchronized by the production software that monitors the 14 lines, flex, white stock, and other lines. Within the production line standards, Alcon is committed to reduce contamination exposure, so all employees crossing designated areas marked with a blue line must wear protective cloths. The quality control standard is high, which is a strength.

Outbound logistics: Finished product is carried by material handlers to the outbound dock where the forklifts take the pallets to other areas where packages are covered according to the specifications of customers from different countries and then taken to the wrap machine. After the packages are wrapped, fork lifts load the packages into the containers that finally will deliver the product, or take the containers to another shipping location for its further distribution to worldwide Alcon locations.

Marketing and Sales: Alcon produces innovating products for which demand is hard to predict, so forecasting has become an important function of the marketing and sales team. Another important role its marketing and sales team seems to have achieved successfully is its entrance into the global market. Alcon seems to have gained an important share of the market in several countries like, Italy, Portugal, Peru, Chile, etc among many others.

Services: Alcon is aware of the importance of the follow-up process after a sale, thus management created the Alcon partners in patient care program which consist in regular maintenance, in-service training, and on-site emergency service supplied by Alcon field engineers to help its customers to provide a better service to their patients. These programs ensure Alcon’s future sales because most customers will continue loyal to the company.

All activities are related and work in a synergetic equilibrium. However, since all activities are closely integrated a failure of a wrapping machine or packaging machine can delay the distribution process. Alcon seems to be aware of this weakness and hired an inside crew to diagnostic, solve, and repair machine malfunctions. However, I witnessed serious delays even all the effort of the engineering crew. Alcon’s net cash from investing activities for the 2007 first quarter is 71.6 million dollars (taken from the statement of cash flow of Alcon) which is a strength. Thus, in case an investment opportunity is discovered because there is sufficient cash for further investment. A company as Alcon relays its profitability to stay up to date with the latest medical trends, such as nanotechnology innovations, and its creativity to continue improving and developing new eye care products, a mislead in its mission could cost Alcon big time and give its competitors an advantage. Alcon recognizes its weakness and strives to keep every member in its organization aware of the importance of innovation.

Alcon products are valuable, because they promote the development of strategies to improve the efficiency and effectiveness of the company. Eye care products have permitted the company to establish a strategy to penetrate the health care market by concentrating the company resources into one aspect of health care: vision care.

Eye care products are not rare, because in our era, technology advancements has given the industry the capability to explore and develop products that otherwise would be impossible to manufacture. Such is the case that Allergan Inc. can develop eye care products or Bausch & Lomb Inc. with the same quality that Alcon does. However, Alcon eye care products are difficult to imitate by new entrants, because of its innovative characteristic. For someone to develop these products would require such companies years of research and the best human capital in its area of expertise.

Finally, there are not many substitutes readily available in the market. Many Americans are still skeptical to natural medicine and the herbs with curative properties are difficult to find in the US. However, in developing countries natural medicine is a substitute available for families with very low income.

Alcon financial ratios up to this date were taken from the online industry analyst Reuters and are shown bellow:

Alcon Inc ACL (NYSE) (2)

Sector: Healthcare Industry: Major Drugs

As of 3:02 PM EST

$144.81USD

Price Change

Down0.14

Percent Change

Down0.10%

Valuation Ratios

Company

Industry

Sector

S&P 500

P/E Ratio (TTM)

31.90

25.09

27.18

20.84

P/E High - Last 5 Yrs.

43.23

42.32

44.24

32.81

P/E Low - Last 5 Yrs.

25.64

15.54

16.61

13.98

Beta

0.20

0.69

0.72

1.00

Price to Sales (TTM)

8.27

3.78

5.34

3.00

Price to Book (MRQ)

16.29

4.63

5.36

4.31

Price to Tangible Book (MRQ)

21.25

9.25

10.69

8.38

Price to Cash Flow (TTM)

27.52

16.82

20.05

14.88

Price to Free Cash Flow (TTM)

55.56

39.13

36.56

35.46

% Owned Institutions

21.14

70.07

50.13

71.18

Dividends

Company

Industry

Sector

S&P 500

Dividend Yield

1.41

3.01

2.43

2.14

Dividend Yield - 5 Year Avg.

0.65

2.63

1.38

1.85

Dividend 5 Year Growth Rate

NM

8.16

9.93

11.56

Payout Ratio (TTM)

44.47

62.95

31.12

29.10

Growth Rates

Company

Industry

Sector

S&P 500

Sales (MRQ) vs Qtr. 1 Yr. Ago

12.26

7.64

14.46

14.62

Sales (TTM) vs TTM 1 Yr. Ago

13.69

6.95

14.57

14.59

Sales - 5 Yr. Growth Rate

12.25

7.15

17.26

13.90

EPS (MRQ) vs Qtr. 1 Yr. Ago

-1.09

8.16

13.27

15.40

EPS (TTM) vs TTM 1 Yr. Ago

26.45

-5.66

7.73

20.01

EPS - 5 Yr. Growth Rate

32.94

3.87

13.06

23.42

Capital Spending - 5 Yr. Growth Rate

9.96

-1.41

9.80

8.71

Financial Strength

Company

Industry

Sector

S&P 500

Quick Ratio (MRQ)

1.49

1.33

2.13

1.26

Current Ratio (MRQ)

1.77

1.91

2.84

1.78

LT Debt to Equity (MRQ)

0.02

0.26

0.36

0.60

Total Debt to Equity (MRQ)

0.33

0.35

0.43

0.79

Interest Coverage (TTM)

NM

11.90

9.44

13.08

Profitability Ratios

Company

Industry

Sector

S&P 500

Gross Margin (TTM)

75.04

72.51

68.21

45.08

Gross Margin - 5 Yr. Avg.

73.09

73.45

67.80

44.20

EBITD Margin (TTM)

34.11

28.41

23.58

23.23

EBITD - 5 Yr. Avg.

33.58

29.68

22.59

21.42

Operating Margin (TTM)

30.51

21.80

18.27

19.73

Operating Margin - 5 Yr. Avg.

27.94

24.05

17.23

19.30

Pre-Tax Margin (TTM)

31.76

21.80

18.94

18.60

Pre-Tax Margin - 5 Yr. Avg.

27.97

24.19

17.47

18.05

Net Profit Margin (TTM)

26.45

16.79

12.88

13.68

Net Profit Margin - 5 Yr. Avg.

21.50

17.84

11.85

12.50

Effective Tax Rate (TTM)

16.72

22.68

26.52

29.79

Effective Tax Rate - 5 Yr. Avg.

23.13

26.97

28.86

30.79

Management Effectiveness

Company

Industry

Sector

S&P 500

Return On Assets (TTM)

26.60

10.47

6.97

8.41

Return On Assets - 5 Yr. Avg.

18.61

11.63

6.90

7.10

Return On Investment (TTM)

42.77

13.53

9.25

12.42

Return On Investment - 5 Yr. Avg.

35.49

15.95

9.93

10.66

Return On Equity (TTM)

51.26

20.33

14.59

21.43

Return On Equity - 5 Yr. Avg.

44.49

24.82

16.83

18.49

Efficiency

Company

Industry

Sector

S&P 500

Revenue/Employee (TTM)

386,882

433,835

543,062

915,073

Net Income/Employee (TTM)

102,326

74,023

81,479

115,900

Receivable Turnover (TTM)

5.36

6.13

7.04

10.33

Inventory Turnover (TTM)

2.74

2.73

3.94

12.05

Asset Turnover (TTM)

1.01

0.64

0.77

0.95

Alcon’s stock has a beta of .2 which means that its stock will go up or down .2% for every 1% move in the S&P 500, thus is considered a less-risky investment as the overall market. Alcon’s P/E ratio is 31.90 compared to 25.09, 27.18, and 20.84 respectively. This means that investors are paying $31.90 dollars for every dollar of earnings. Without doubt investors are paying more for Alcon’s stock that for the average industry, sector, and the S&P500.

The management effectiveness ratios have shown how profitable Alcon assets are in generating revenue, so we can see that Alcon is performing better compared to the Industry, the sector, and the S&P500. Here is a graph to help us visualize Alcon’s performance based on the data above.





These ratios have shown the strong position of the company in the drug industry, and a good expectation for the future of Alcon.

Customer Perspective: Alcon customers see Alcon as a company that integrates its community into its operations and improves its surrounding. Alcon strives to deliver its products quickly to its customers, and to supply high quality products. These goals are clearly showed in the way Alcon has organized its manufacturing process and warehouse to be able to respond to the market needs efficiently.

Internal Business Perspective: The processes, decisions and actions that managers at Alcon take are customer-based because customer satisfaction is very important. Such is the case of this factor that every some key lines of production have its production per day and goals projected through a big plasma monitor. Managers want Alcon’s employees to be conscious of the importance of being able to met its goals and satisfy its forecasted demand.

Innovation and Learning Perspective: Innovation is a big concern for Alcon top leaders, so they strive to keep up with the market needs and Industry standards. Alcon through Short-term pipelines continuously evaluate its products to come up with better strategies. Also, Clinical trials, and Alcon research and development facilities helps Alcon managers to achieve its goals and the results are a vast number of successful products in the market and a prominent company. As managers said, We recognize the immediate need to respond to the needs of aging populations and the consequent pressures on healthcare costs. We are confident in our ability to address these 21st century needs through our research and development efforts where we combine the advantages of size, creativity and focus.” (3)

Financial perspective: Top management at Alcon seems very concerned about keeping the company tuned with its financial ratios. In an industry where millions of dollars are utilized to develop new drugs, investments are a necessary lubricant to keep up with all the necessary expenses of creating innovating products. Such it is the case that Alcon financial ratios make Alcon securities attractive. For example: Alcon’s stock has a beta of .2 which means that its stock will go up or down .2% for every 1% move in the S&P 500, thus is considered a less-risky investment as the overall market. In addition Alcon quick ratio is 1.49, which indicates that for every dollar of current liabilities there are 1.49 dollars of easily convertible assets compared to 1.33 quick ratio of the industry and 1.26 of the S&P500 in average, which definitely is better with exception of the sector quick ratio which is 2.13.

A closer view to Alcon Inc and its closest competitors is shown in detailed at Yahoo finance (4), I took the updated data from the site and display it bellow:

DIRECT COMPETITOR COMPARISON

ACL

AGN

BOL

NVS

Industry

Market Cap:

43.18B

20.44B

3.58B

126.79B

N/A

Employ­ees:

13,500

6,772

13,000

100,735

N/A

Qtrly Rev Growth (yoy):

12.30%

23.30%

13.60%

10.50%

0.00%

Revenue (ttm):

5.22B

3.51B

2.40B

39.28B

N/A

Gross Margin (ttm):

75.86%

82.39%

56.84%

71.80%

0.00%

EBITDA (ttm):

2.13B

903.10M

288.10M

10.77B

N/A

Oper Margins (ttm):

33.91%

20.34%

6.51%

21.99%

0.00%

Net Income (ttm):

1.38B

424.80M

51.70M

7.60B

N/A

EPS (ttm):

4.534

1.392

0.923

3.26

N/A

P/E (ttm):

31.94

47.99

70.04

16.66

N/A

PEG (5 yr expected):

1.67

1.83

1.81

1.21

N/A

P/S (ttm):

8.28

5.80

1.49

3.24

N/A

AGN = Allergan Inc.

BOL = Bausch & Lomb Inc.

NVS = Novartis AG

Industry = Medical Instruments & Supplies

In the graph we clearly see how Alcon’s earnings before income taxes, depreciation and amortizations is $2.13 billions compared to $903.10M, $288.10M, and $10.77 billions respectively. With the exception of Noartis A G, Alcon performed pretty well against its competitors.

Alcon’s net income was of $1.38 billion for the period against 424.80M, 51.70M, and 10.77 billion respectively. If it is true Alcon performed better than both AGN and BOL, NVS showed a better number.

Alcon’s Price/Earnings To Growth, which is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected future growth is lower than Allergan Inc and Bausch & Lomb Inc, but once again Novartis has the lowest ratio in the industry. In order to have a better understanding of the PEG ratio, a quick rule of analysis would be that the lowest the ratio the better the company future growth rate.

Intellectual Capital

Alcon has taken very seriously its mission of helping people around the world to see better. Such is the case that every employee is conscious of the importance of the medication developed at Alcon labs and manufacturing plants. Alcon human resources managers are aware of the importance of its employees, and when kay Cox, a human resources manager was interviewed she said, “You can take away the buildings, you can take away the equipment, but if you take away Alcon's people, if you take away the talent – you have nothing.” (5)

Alcon, Inc is focus on recruiting dedicated and skill people to complement and improve Alcon standards. Thus, in order to attract human capital Alcon is actively researching for the best candidates from a vast pool of applications. Alcon invites students from different universities in the U.S. and the world to apply for a position at Alcon, and contracts staffing agencies to act as a human filter, after employees have worked at Alcon for a period of time, some employees are hired by Alcon and given the bundle of benefits Alcon employees enjoy.

Intellectual capital is, for some companies, one of the biggest assets they have. For example, Google Intangible and Intellectual assets are far more valuable than any building the company holds. Every part of its building is designed to foster creativity, and employees are given all the facilities they need to grow within the company. Another example is Pixar Animated Studios, this animated studios have customized offices that are sort of eccentric but nothing formal. The message delivered to employees is definitively, have fun while producing. Thus, creating movies is a fun process at Pixar.

Alcon also relies on the creativity of physicians and scientists to come up with new products; however its environment is more formal. In addition to the comfortable environment provided to physicians and lab technicians. Alcon has made sure it offers an attractive package of benefits to attract human capital. Some of the benefits Alcon offers are described bellow and taken from Alcon’s website (6):

Insurance

Health Care

  • Medical Plan - several options based on location
  • Dental
  • Vision

Life/Accident

  • Basic and Optional Term Life
  • Dependent Life
  • Basic and Optional Accidental Death & Dismemberment
  • Business Travel Accident

Disability

  • Short-Term Disability Income
  • Long-Term Disability Insurance

Personal Auto and Homeowners at discounted rates

Tax-Advantaged Reimbursement Accounts

  • Healthcare Flexible Spending Account (FSA)
  • Dependent Care Flexible Spending Account with company match
  • Health Reimbursement Account (HRA)

Paid Time Off (PTO)

  • Paid Time-Off (PTO) - number of days varies
  • Holidays - 11 days including 4 days off during December holidays
  • Other Paid Time-Off (PTO) for family deaths, jury duty, military training, etc.

Retirement Benefits

Alcon 401(k) Plan - contribute from 1 percent to 5 percent of your eligible pay with Alcon matching it dollar for dollar. Plus, company contributions will fully vest after only 5 years of service. Contribution eligibility begins the first day of employment.

Alcon Retirement Plan (ARP) - Alcon makes a 7 percent contribution on your behalf to the ARP each pay period.

Total Company combined contributions to the Alcon 401(k) and the Alcon Retirement Plan can be as much as 12%.

Retiree Benefits

  • Medical Coverage
  • Life Insurance Plan
  • Accumulated Paid Time Off

Health & Wellness Programs

  • On-site Fitness Center & recreational activities in several locations
  • National fitness center discounts
  • Physical Activity Incentive Program
  • Health Coaching for improvement of health risks
  • Weight Watchers program subsidized by Alcon
  • Stop-Smoking Program subsidized by Alcon
  • 24-hour Nurseline
  • Nutrition programs
  • Free Flu Shots

Education Programs

Alcon provides and/or assists with relevant on-site and external courses, conferences and seminars, tuition reimbursement, professional memberships, etc.

Family Programs

  • Employee Assistance Program - provides assistance and support with issues such as mental health and legal problems.
  • Adoption Reimbursement Program
  • Long-Term Care Insurance

Other Benefits, Based on Location

  • Business Casual Attire
  • Employee Credit Union
  • Cafeteria
  • Service Awards
  • Various Free Beverages
  • Company Store
  • Free Parking
  • Auto Purchase Discounts
  • Other Corporate Discounts

In order for Alcon to retain its employees, Alcon continuously strive to keep employees challenged to improve, and innovate in every area of the company. There are constant evaluations to the personnel, and production of every production line is evaluated measured, and compared to previous days.

Social capital is recognized at Alcon, and employees socialize at Alcon’s break rooms where employees can chat, read, or browse the internet from the computers available to Alcon employees. All explicit knowledge is welcome at Alcon’s, so employees and non-employees are encouraged to provide feedback to Alcon through its website or direct interaction.

Business-Level Strategy

Alcon, Inc. products are marketed and produced under a differentiation strategy. Alcon manager’s efforts to differentiate its products from the competence have been pretty successful. The data shown bellow was taken from Walgreens.com and the prices clearly show the premium price customers are willing to pay for Alcon’s allergy relief eye drops.

Name of Drug

5 ML

15 ML

Description


PATANOL 0.1% OPHTH SOLN 5ML

$92.99

$278.89

This medicine is antihistamine used to prevent itching of the eyes due to allergies.


3 ML

9 ML


VIGAMOX 0.5% OPHTH SOLUTION 3ML

$71.99

$215.89

This medicine is quinolone antibiotic used to treat
eye infection.


5 ML

15 ML


TOBRADEX OPHTH SUSP 5ML

$82.99

$248.89

Treat infections and to relieve the redness,
irritation and discomfort associated with
certain eye problems.


2.5 ML

7.5 ML


PATADAY 0.2% OPHTH

$92.99

$278.89

This medicine is antihistamine used to prevent itching of the eyes due to allergies.



In contrast to the huge price Alcon charges to its differentiated products, other eye products like the ones shown bellow show the gap in the prices among the different eye-care products. Generic allergy drops are significantly cheaper than Alcon eye drops, and even other products like Similasan Healthy Relief Cataract Care Eye Drops are just $9.99 plus taxes, or in other cases shipping and handling. Definitely Alcon is the Apple, the computer manufacturing company, of the eye-care products.

Name of Drug

0.5 OZ

Description

Clear Eyes Lubricant
Redness Eye Drops for Redness Relief

$3.99

Relieve redness of the eye due to minor irritations.

0.33 OZ

Similasan Healthy
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Alcon makes sure to let its customers know the quality of components used in the production of the medicine, the strict quality control, and its rigorous procedures. Because of the innovative characteristics of Alcon products, customers perceive them as unique.

Firm Infrastructure: Alcon facilities are well equipped and promote an image of prestige in its surrounding environment. Its manufacturing plan has a friendly environment, and its parking and entrance are carefully managed by administration and security personnel. However what has enhanced the reputation of the corporation are its new CEO and CFO hires. The biographical data of Alcon’s CEO and CFO was taken from Alcon.com and Business Wire.com respectively.

Alcon’s CEO, Mr. Rayment started his career with Kendall Company in 1974, in which he worked in diverse positions of sales and marketing. He later was hired by CooperVision IOL as a new director for the sales and marketing department. His curriculum vita is very prestigious, since he holds a Bachelor of Arts in Education from the University of Washington in Seattle, as well as a Masters of Business Administration from the University of Kansas in Lawrence, Kansas. He is a graduate of the Harvard Program for Management Development. In addition to this hire, Alcon’s new CFO is Mr. Richard Croarkin who comes from Nestlé, SA, where he was executive vice president finance and chief financial officer of Nestlé Waters North America. One of the many internet sites dedicated to provided biographical data and other source of financial information describes Croakin career,

“Croarkin joined Nestlé Waters North America in 1994 and he has overseen the finances of a business unit that has grown to $4.4 billion in sales. He has responsibility for all aspects of finance including financial planning, treasury, tax, accounting, controls, credit, information systems and acquisitions. Before joining Nestlé, Croarkin worked for Pepsico Incorporated for 11 years, where he served in a number of senior financial positions around the world, including as chief financial officer of Pepsi Latin America and Pepsi Canada. He started his career with AMAX, Inc. and worked in treasury, corporate development and planning. Croarkin is a 1976 graduate of Georgetown University with a degree in economics and received his MBA from University of Connecticut in 1979. He also has a diploma of the French language from Alliance Francaise in Paris, France. During his career he has gained extensive global experience by serving in a variety of key financial positions in several countries.” (7)

Human resource management: If there is something besides its products that Alcon, Inc should be famous for, it is for its extensive search and gathering of the best talented physicians and scientist in the market. It is easy to post a resume online on the Alcon’s website, as well as contacting the staffing agencies that supply Alcon with labor. However, Alcon employees have to fulfill minimum requirements. For example, as I informed before, Manpower, one of Alcon staffing agencies, has a policy that a potential worker must at least hold a High School diploma or GED. The company wants to make sure employees are going to be able to meet Alcon expectations, and to be able to operate sophisticated equipment. Alcon managers not only hire the best, but they also want to make sure Alcon employees stay competitive,

“At Alcon, we take a vested interest in our employees who strive along with physicians worldwide to continually improve vision care and eye health. As a result of intensive, technical job training, various personal development opportunities, and an unprecedented level of pride in service, Alcon has grown into one of the largest and most respected eye care companies in the world.” (8)

The cons of having stuffing agencies supply labor are shown bellow:

  • Stuffing agencies doesn’t provide the same benefits Alcon employees have, and qualified employees can be lost due to other job offerings.
  • Stuffing agencies don’t guarantee stability in hours and personnel are called as needed. This fact could deter potential well qualified employees to apply for a job at Alcon.
  • If it is true that there are thousand of applications for a position at Alcon, also there is a high turnover within staffing agencies. This could affect the quality of productivity and effectiveness at Alcon’s plants, if this problem gets chronic, in the long run.

Technology development: Alcon’s material handling is definitely superior to other company’s warehousing procedures. At Alcon’s warehouse workers use sophisticated swing-reach trucks, forklifts, and pallet jacks to handle raw material, work in process, and finished product around the building. The transit flow is well designed, so production lines are isolated from excessive debris and dust. Also, as I indicated before, blue lines, yellow lines, and white lines separate circulation spaces. Some spaces where contamination is an issue has blue lines and cannot be crossed over without protective clothes. The engineering support is highly sophisticated and software remotely control the temperature at which chemical mixes containers should work, as well as sterilization machines, and other machinery involved in the manufacturing process of Alcon’s pharmaceutical medicine.

Procurement: Alcon’s emphasizes the quality of the components used in the elaboration of its medicine. Thus, suppliers are carefully selected and even some small businesses from the area are elected through Alcon’s Supplier Diversity Program.

Inbound, operations, and outbound logistics: These primary activities are integrated at Alcon’s warehouse in order to shrink overhead and lost time. Forklift drivers aided by small computers are able to scan, place labels, read material requisition, moving orders, etc from its units. Material handlers supply, with mechanical jacks, raw material to the lines, and from the production lines finished products to the outbound dock. Forklift drivers then take the work in process items to the palletizer where some packages are wrapped and loaded into the trucks containers.

Marketing, sales, and services: These activities play an important role in the development of any company, and Alcon seems to have benefited from the hiring of talented marketing and sales people which have given the company the rising sales and profitability Alcon enjoys. In addition to it, managers want to make sure Alcon’s clients have all the necessary information for physicians to use the medical equipment and prescribe the right product,

“Alcon realizes that success is not merely measured by innovation, but effective implementation as well. Thus, we foster an important relationship with practicing physicians. We want to provide them with the best tools possible while offering instruction on how to best utilize these resources – requiring a level of interaction and exchange that few other ophthalmic companies provide.” (9) Managers said.

Industry life cycle stage: The drug industry seems to be in between Introduction to Growth, because research and development is still being a big concern and expense for companies like Alcon. Even though Alcon has differentiated its products, the market for eye-care, surgical, and pharmaceutical products is in constant growth, so its current market is fairly large. The growth of the market in and out the U.S. makes of this market very attractive, and even though the barriers of entrants are significantly high, “Alcon has 13 top competitors” –according to Hoovers, an internet analyst company. (10)

The emphasis in product design and process are still being implemented, but for the products in the market the processes of how to speed up distribution are a crucial concern. This is easily observed by the way manufacturing lines are surveyed, and the production rates displayed on screens for line supervisors to analyze and foster productivity improvement.

On the other hand, R&D, and sales and marketing are major functional areas of concern. In respect to these functional areas Alcon managers disclosed the following information,

“Alcon has research and development facilities and laboratories located in the United States, Spain and Switzerland. With more than 1,350 dedicated researchers and a projected budget of US$2.5 billion dollars over the next five years, we are well poised to accomplish our mission.” (11)

Also, about sales and marketing, Alcon has offices in 75 countries and sales personnel in 180 countries to be able to meet the demand for eye care products. Besides selling Alcon’s products, salespeople gather information in the field about people’s experiences with the usage of eye-care drops or any other pharmaceutical product, and physicians provide feedback and techniques that together with the information gathered through salespeople helps Alcon to improve its products.

Increasing market awareness and creating consumer demand: In this area Alcon does what they call applied research. Applied research is taking a discovery and making it fit to a specific need. In addition to the discoveries made on Alcon’s labs, Alcon has partnerships with academic institutions and other institutions around the world. This vast pool of information available to Alcon makes it easy for managers to keep up with the worldwide needs for new and improved medication in the eye-care field. The release of new products in the market for eye diseases, and its active participation in third world countries have increased market awareness and created customer demand worldwide. After all, no matter what the cost is if a patient is going to recover vision after being blind for a period of time.

Corporate-Level Strategy

ALCON Labs, is one of the many companies the food giant Nestlé owns. In this case Nestlé is the parent company which distributes the earnings within the company. How Nestlé does distribute the earnings among the companies? Such information is classified, but one thing is clear, most of the companies Nestlé acquired definitely will help Nestlé to expand in the international food market. For example, Nestlé acquisition of Dreyer’s and Purina will help Nestle to add diversity to the food products Nestlé offers. However, Alcon as a company has not acquired, neither merged with any other company. Currently Alcon owns some trucks for distribution of its products, but it hasn’t merged or bought any other pharmaceutical companies. What Alcon does instead is partner with other labs, biotechnology companies, and other companies. Such partnerships have been a success in Alcon’s growth. Alcon managers seem happy with the results as they said,

Our results speak volumes. We are proud of our successes with licensing compounds and surgical devices and the impact they've had on the community.” (12)

Some of the aspects of Alcon’s partnership programs are its In-Licensing and Out-Licensing partnerships. Alcon welcomes global licenses and co-promotion agreements for compounds, and different kinds of technology in order to foster research and innovation in its area of interest.

In-Licensing: The areas of interests are the following:

1) Cataract

2) Dry Eye

3) Glaucoma

4) Ocular allergy and inflammation

5) Ocular infections

6) Otic/Nasal

7) Refractive

8) Retina

Out-Licensing: these intellectual properties are given to any interested party through Alcon’s website:

1) Alpha 2 Adrenergic Agonists

2) Carbonic Anhydrase Inhibitors

3) Muscarinic Agonists

4) Prostaglandins

5) Aldose Reductase Inhibitors

6) Angiostatic Steroids

7) Viscoelastic Solutions

8) Serotonergics

9) Biocides

10) Blue Light Blocking Chromophores

11) Analogues of 15

Bellow there is a graph showing some of the acquisitions Nestlé have made:






As noticed, most of the companies Nestlé has acquired are in the food industry, but Alcon and Novartis. Such pharmaceutical companies help Nestlé diversify its portfolio and to differentiate its companies as Stars, Question marks, Cash cows, and Dogs.

International Strategy

Alcon has offices, headquarters, research and development facilities, and owned subsidiaries around the world. Alcon locations are as followed:

Central and North America

  • Canada, Mexico, US, Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Panama, Peru, Puerto Rico, Uruguay, Venezuela.

Southern Europe

  • Greece, Italy, Portugal, Slovenia.

Western Europe

  • Austria, Belgium, France, Germany, Ireland, Spain, Switzerland, UK.

Africa

  • Egipt, South Africa.

Central Asia

  • Kazakhstan

Easter Asia

  • China, Hong Kong, Republic of Korea, Japan, Taiwan, Vietnam.

Southeast Asia

  • Indonesia, Malaysia, Philippines, Singapore, Thailand.

Southern Asia

  • India, Pakistan.

Western Asia

  • Lebanon, Saudi Arabia, Turkey.

Eastern Europe

  • Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Serbia, Slovak Republic, Ukraine.

Northern Europe

  • Denmark, Finland, Latvia, Lithuania, The Netherlands, Norway, Sweden.

Oceania

  • Australia, New Zealand

How to manage and gather information from so many places is a very complicated task that relays on sophisticated Enterprise Resource Planning systems (ERP), good organization, great people, and a single vision. However, Alcon did expand so aggressively due to its International strategy layout. A closer look at Alcon strategic locations are as follows:

Headquarters

o Fort Worth, Tx, USA

o Hünenberg, Switzerland

Research and Development Facilities

o Tokyo, Japan.

o Irving, CA, USA

o FW, TX, USA

o Orlando, FL, USA

o Barcelona, Spain

o Schaffhausen, Switzerland

Manufacturing Plants

o Irvine, CA, USA

o Sinking spring, Pennsylvania, USA

o Huntington, West Virginia, USA

o Orlando, FL, USA

o Houston, TX, USA

o FW, TX, USA

o New Mexico, Mexico

o Sao Paolo, Brazil

o Beijing, China

o Puurs, Belgium

o Kaysersberg, France

o Schaffhausen, Switzerland

o Barcelona, Spain

As we can see in the distribution layout, the headquarters are located in the USA and Switzerland where the two major owners are concentrated. Another factor to consider is that in such locations; innovation, the flow of information and capital is high, as well as protection for intangible capital. The manufacturing facilities are mostly located in the US, but other plants as the one located in Beijing could take advantage of cheap labor. On the other hand the manufacturing plan in Sao Paolo, Brazil is a strategic spot for delivering Alcon Products to different countries in South America. The other plants in Europe are well located in Barcelona, Switzerland, and France to deliver plenty of Alcon’s eye care product to the European market.

The other Alcon facilities are owned subsidiaries dispersed around the globe to foster sales, and gather information about the external environment in such countries. Owned subsidiaries permit Alcon to have absolute control over such facilities, and possibly to protect Alcon’s intellectual property.

Alcon follows a multidomestic strategy, because the emphasis of the company is in differentiating its product and presenting it as a high quality drug, not as a cheap commodity.

Even though the company’s headquarters are in the US and Switzerland, they do business globally but think locally. They understand that in order to sell in a different country they must partner with other physicians and institutions that understand the market better and have information about customer preferences and illness very important for Alcon. Alcon’s partnership program motivates and rewards professionals from different countries that are able to supply innovating ideas to Alcon through the internet.

Digital Business Strategy

Alcon as a giant in the pharmaceutical industry has taken part in the online business world. Alcon websites are very informative, such as the main Alcon’s website in the US. Such website has from historical to financial data in a very organized manner for its usage among the people interested in interacting with Alcon. Other websites as the website of Alcon in Canada has a list of all Alcon’s products as well as a section called: how to use Alcon medication, where people can be informed about the right way of inserting drops, etc. The information is disclosed in a step by step format. The website is made to promote Alcon’s products on the Canadian market, and even though Alcon does not commercialize its products by itself, such information can promote awareness of Alcon products capabilities and thereby fostering sales on Alcon distributor’s places. On the Alcon location’s site there are several links where people from different countries can look job opportunities, medical education programs, distributor options, and much other information.

Alcon taking advantage of the internet delivers its products directly to its customers, and through its Intranet provides information to its current employees about available positions within the company. Even though most information is classified, it may be possible that just like other companies, Alcon utilizes its B2B system to pull data about customer demand to avoid spikes in the consumption market as well supply its product more efficiently. The same features are seen in the website of Alcon in Mexico. Which is interesting is that every website is similar and consistent with the other websites of Alcon worldwide. Although a lot of information is confidential, it is common sense to believe that there has to be some common place on the web where information is exchanged in an effort to collaborate to the creation of better drugs or surgical equipment. Since most of the intellectual capital of Alcon is dispersed worldwide the scientists and other medical professionals also use the internet to exchange information; thus, chats, virtual spaces, and other tools are probably used for such purpose. Since Alcon does not deal directly with its end-user, patients and general public, its website was built to provide information to physicians and other customers about the benefits and features of Alcon drugs. This makes the distribution of the products more effective, because physicians are well informed about the drugs and medications prescribed, and its utilization is made efficiently.

Strategic Control and Corporate Governance

Alcon Inc., it’s trying real hard to foster an ethical environment and makes sure its strategies are followed. This fact is made clear in the company website, where anybody can read their guidelines, code of business conduct and ethics, NYSE compliance, compliance program, and compliance declaration. A possible explanation about why Alcon has made such information public it’s because top management wants to insure there is transparency in the company operations. On the guidelines there is a clear overview of the responsibilities of the board. Part of the guidelines referent to the role of the boar reads,

The day-to-day management of the Company is the responsibility of the Company's management. The primary responsibility of the Board is to oversee and review management's performance of these functions. In addition, the Board is responsible for the ultimate direction of the Company and for specific matters” (13)

Alcon’s code of conduct is very well narrated and contains rules and guidelines for employee’s daily behavior. Its code of conduct establishes that Alcon will comply with all rules and regulations, and employees must work in an ethical manner in a high quality standards environment. Alcon employees must comply with all laws while trading Alcon’s securities in the stock market. Also, the code of conduct has explicit rules about the behavior of management and the working environment; the working environment must be safe for the employees and the assets of Alcon must be used for purposes of the company business.

Alcon, Inc uses a contemporary approach to strategic control, since it constantly monitors the assumptions, premises, goals, and strategies of the company. All of the key participants in corporate governance: shareholders, management, and the board of directors participate together into driving Alcon to safest waters in the business ocean. This collaboration issue is insured through the creation of three entities:

  • Audit Committee, the summary of the mission of this entity is defined as followed,

The primary purpose of the Audit Committee (the "Committee") of the Board of Directors (the "Board") of Alcon, Inc. (the "Company") is to assist the Board in fulfilling its responsibility to oversee (i) management's conduct of the Alcon Group Companies' financial reporting process (including the development and maintenance of systems of internal accounting and financial controls), (ii) the integrity of the Company's financial statements, (iii) the Company's compliance with legal and regulatory requirements and ethical standards, (iv) significant financial transactions and financial policy and strategy, (v) the qualifications and independence of the Company's outside auditors, (vi) the performance of the Company's internal audit function and (vii) the outside auditors' annual audit of the Company's financial statements. (14)

  • Compensation Committee, the summary of the mission of this entity is defined as followed,

The purpose of the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Alcon, Inc. (the "Company") is to (i) facilitate the Board's discharge of its responsibilities relating to the evaluation and compensation of the Company's executives, (ii) oversee the administration of the Company's compensation plans, (iii) review and determine director compensation and (iv) prepare any report on executive compensation required by the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"). (15)

  • Nominating/ Corporate Governance Committee, the summary of the mission of this entity is defined as followed,

The purpose of the Nominating/ Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of Alcon, Inc. (the "Company") is to (i) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board, (ii) make recommendations to the Board concerning committee appointments, (iii) review and make recommendations for executive management appointments, (iv) develop, recommend and annually review corporate governance guidelines for the Company and oversee corporate governance matters and (v) coordinate an annual evaluation of the Board and its Chairman. (16)

Alcon is dedicated to build a strong and effective culture, so it has implemented rules, codes and rituals into Alcon’s implicit standards. For example, employees must dress casual and inside the manufacturing facility a cloth protector is wear by all employees. If an employee has bear, such employee must cover it with a bear protector in order to avoid cross-contamination. With such a dress code, employees are aware how serious Alcon is in safeguarding Alcon products from cross-contamination. On the other hand, Alcon maintains a tight informational control since it continuously scans and monitors the external and internal environment of the organization through its vast number of partners in the United States and other countries.

About the Culture, rewards, and Boundaries of Alcon:

  • Culture: Alcon emphasizes product quality, and focuses on team efforts and individual growth to achieve it.
  • Rewards: Alcon rewards productivity improvements and quality control goals achieved by rewarding its employees in a collective and individual manner. For example, Alcon encourages collaboration and personal involvement in the manufacturing process. During my experience as an Alcon employee, I always looked at the employee of the month board. This time, an employee was rewarded with private parking for a month because she found some products were mislabeled and such discovery saved the company of delivering hundred of wrong products to its customers. At the collective level, the line that produces over its achieved goal is always rewarded with bonuses.
  • Boundaries, Everyone in Alcon works towards a common goal to develop high quality products, and to help preserve and restore vision worldwide.

1. Focusing efforts on strategic priorities, Alcon has set the following boundaries on strategic positions,

o Global collaboration between all internal teams

o Be a research and development driven eye care company oriented

o Hire team oriented people, highly skilled, and competent in the eye care business, all other employees are constantly trained to meet Alcon expectations

    1. Improving operational efficiency and effectiveness, In order to maintain control on production output Alcon does the following,

o Employees must dispose of all medication that has fallen to the floor from the production line

o Employees must not cross the blue lines painted in several areas around the production lines without proper clothing protection in order to avoid cross contamination

o If an error is made, do not erase it, strikethrough it, and write on the side new data.

Making efficient use of its culture, reward system, and boundaries Alcon is ensuring the company not only does the right things, but also does things right.

Organizational Structure

Alcon has a divisional structure, because it is organized around products. Its business divisions are as follows and its diagram looks like the picture bellow:

Business Divisions

  • Surgical Products
  • Pharmaceutical Products
  • Consumer Vision Care Products

The separation of its strategic and operating control has given Alcon the ability to respond quickly to the changes in the external environment. There are few problems in the sharing resources process, and the development of general management talent has been enhanced. This strategy has succeeded because even though products are different they are in the same category –eye care business.

Strategic Leadership

At a moment Alcon top executives had to set a direction in the corporation, it seems that its direction of being the first choice in eye care products has been successfully implemented, and the growth of the company is to admire. Achieving such success was not easy and Alcon leaders work real hard encouraging employees to embrace leader’s philosophy about taking the challenge of improving everyday to deliver high quality and innovating products to customers. Innumerable vision centers around the states carry Alcon products, and as the demand for contact lenses increases, the demand for eye care products will also increase. However, delivering high quality products is not enough to be leaders in the eye care arena, and as leaders described, “we are guided by a culture of accountability, steadfast commitment to relationships with eye care professionals and other doctors who prescribe our products and responsible support of our employees and the communities we serve.” (17)

Cary Rayment, Chairman, President and Chief Executive Officer of Alcon has taken over a company with such precedent and stakeholders hope he can continue the growth of a company that just last year had the following global revenue:

2006 Global Revenue

In 2006, total sales totaled US $4.90 billion, an increase of 12.1 percent over 2005.

  • Surgical: US $2.20 billion
  • Pharmaceutical: US $2.01 billion
  • Consumer: US $0.69 billion

Mr. Tim Sears, the previous CEO of Alcon left Mr. Rayment a solid base in which to work towards the future of the organization and he acknowledge it, as he entered Alcon following the acquisition of CooperVision Surgical. The company was well design and Mr. Rayment doesn’t seem interested in making any major changes. Perhaps the future will say in which direction the actual CEO is driving Alcon. So far, all we can see is a bright future for a company that has plenty of capital and a wealthy father Nestlé of Switzerland which owns approximately 75% of Alcon stock.

Perhaps what the leaders at Alcon are doing is nurturing the organization to maintain its rhythm. Within the organization, management has empowered employees at all levels, from the recycle man to the top executive. Everybody looks for way to stay productive. However, Alcon managers know it is not enough to maintain the same rhythm while the race is near the end. As managers realize production is doing well, they want to do great, so they continuously challenge employees and reward them to find ways to improve productivity.

About individual ethics and organizational ethics, Alcon strive to reward ethical behavior –making use of its reward power—to employees that are ethical and hard working, but punishes unethical behavior of any kind severely –this behavior usually is punished with employee labor termination— thus Alcon managers also use coercive power whenever it is necessary.


Conclusion

Even tough Alcon is a giant and has been around for approximately 62 years it is far from being perfect. The company must strive to continually implement its policies and keep the bonfire of Alcon’s mission alive. Definitely, Alcon knows how to gather data and to use such data to continually improve. The leaders value people’s contribution to the organization, and they let them know it by rewarding its employees.

The manufacturing plants of Alcon are well organized and located at strategic countries around the world. In addition, Alcon R&D facilities, and Headquarters locations permit leaders efficiently keep the flow of information and distribution among facilities. The company it is in constant economic growth and provides good returns to shareholders and stockholders.

Another characteristic of Alcon is that the company has high intellectual capital which is important in the development of innovating products. Also, the fact that Alcon has a differentiation strategy allows Alcon to receive good revenues due to its premium prices, and thanks to the highly competitive people Alcon has at the top it seems the company will be afloat for as long as the board of directors keep picking the right person to lead Alcon.

Alcon, Inc. has a lot of capital which is an advantage that with permit the corporation not to miss future financial opportunities, and its strict and well defined corporate governance will keep the company free from the hazards of unethical behavior among top executives. In addition, Alcon employees will keep contributing to the success of the organization, because its leaders reward innovation at the individual and collective level.

All in all, Alcon has been successful because it has been around with the same mission from the beginning with the right people, at the right places and with the right product.

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