American Home Products Corporation

Introduction

Background

In 1981, AHP had reached sales of more than $4 billion by producing 1,500 marketed brands in 4 different kind of business; prescription drugs, packaged drugs, food products, and housewares and households products. Moreover, AHP is known to be the largest and profitable business in prescription of drugs; however, the company has a sizable market share in antihypertensive, tranquilizers, and oral contraceptives. The company has almost debt- free balance sheet and growing cash reserves (40% of net worth

in 1981). AHP was able to gain this huge success in these lines was by marketing expertise.

Culture of the Business

AHP's corporate culture distinctive and this culture had several components. First, the company's culture was known to be reticence. A second element, that the managerial philosophy of AHP was prudence and had a strict financial control. For example, all expenditures that are greater than $500 had to be personally approved by Mr. Laporte, who was the CEO of AHP, even if was authorized in the corporate budget. Another important component of AHP's