Eli Lilly Case Analysis Background

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Eli Lilly Case Background Marketing the first insulin product in 1923, Ely Lilly became a leader in diabetes treatment. It had improved insulin along with two dimensions: purity and time pro. Time pro involves matching the rate at which injected insulin is absorbed into the blood, with the rate at which glucose is absorbed into the bloodstream. Eli Lilly used animal derived , but it was not molecularly equivalent to human insulin. Due to this, a portion of the population with diabetes became resistant to insulin. Ely Lilly partnered with Genentech, a biotechnology company, to genetically engineer bacteria that could synthesize and secrete human insulin; this was termed “Humulin.” The market’s response was poor, however to the large-scale biotechnology plant, where $700 million was invested. Consumers resisted its high price. Also, Ely Lilly failed to recognize the different flow patterns of diabetic patients, who wanted to control their blood glucose levels carefully. Trajectory of customer need is the path over time of increase in performance improvement in an industrial segment which consumers demand or want. Trajectory of technological improvement is the improvement over time in the level of product performance that technologists can provide. Ely Lilly originally pioneered the diabetes care market. It had some prosperous years, but eventually failed. In 1995, Novo, a major competitor, dominated the European market, and was building a new plant in the US, in order to produce insulin cartridges for its pen. Simultaneously, Lilly was working on its own pen, seeking to reverse its decline. The basis of competition evolves from functionality, to reliability, to convenience, and then price. The shift from functionality to reliability, results from product innovation overshooting market need; product performance progresses faster
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