Technology acquisition is one of the strategies that may be adopted by firms to empower their market footprint and considered as a quick solution to adding competitive advantages to their profile. Meanwhile, internal R&D attention is essential for market domination and growth.

1. APPLICATION OFTECHNOLOGY
ACQUISITION FOR CORPORATE
GROWTH
“MARION LABS” CASE
MOT/PHD PROGRAM
MOT653 TECHNOLOGY TRANSFER AND ACQUISITION
PREPARED BY:
AHMED SOBHI ELGAZZAR ITIL@,MBA,CWA PH.D. RESEARCHER
CONTACT: AHMED.ELGAZZAR@MAIL.COM
30-JAN-2021
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2. FOUNDER BIO
 “Ewing Kauffman”
 Born in Missouri in 1916.
 Was supported his family by selling magazines and eggs door- to- door.
 After graduating college, he served in the Navy during WW2,
 Earned over $90,000 in poker games.
 Worked for Lincoln Laboratories, a pharmaceutical company.
 He soon became such a good salesman that he was earning more than
Lincoln's president.
 After leaving Lincoln when the president tried to reign in his power by
reducing his territory, Kauffman started Marion Laboratories in his
basement in 1950.
 He convinced three doctors to support his company if he could "provide
equal or better quality drugs."
Reference: http://katcherbusiness.blogspot.com/p/biography.html
“Ewing Kauffman”
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3. ABOUT MARION LABORATORIES
 A U.S. pharmaceutical company based in Kansas City, Missouri
from 1950 until 1996.
 started in Ewing’s basement by selling calcium supplements made
from crushed Oyster shells which he made in his home and
starting with $5,000 in capital.
 Company specialized in acquiring pharmaceutical products by
others and reformulating them for the market
 Marion had the highest sales and the highest profit per employee
of any company traded on the NewYork Stock Exchange.
 In 1989 Dow Chemical acquired 67 percent interest of Marion
Laboratories, which was renamed Marion Merrell Dow
Marion’s very first product was Os-Cal®, a calcium dietary supplement
based on oyster shells, which has remained the country’s leading calcium
supplement.
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4. MARION’S COMPETITIVE ADVANTAGES
 For decades company used to introduce competitive advantages for itself
via acquiring technological innovations from outside.
 Acquisition may occur due senior manager adoption for change, in
addition, the response to opportunities introduced by other
organizations.
 Acquisition process was limited to acquire elements of technology
specifically R&D projects and products.
 Marion Laboratories Inc. as independent company had an outstanding
performance at technology acquisition, as a sole applied mechanism to
enrich it’s competitive advantage by updating it’s core product technology.
$2
Million
$930
Million
With Employment <= 3500
1963 1989
Sales
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5. PRINCIPAL FACTORS TO SUCCESS ADOPTED STRATEGY:-
 Highly attention given to the marketing and sales workforce from (careful selection, intensive training, and well
rewarding)
 Highly motivation program for employees via participation in generous profit-sharing plans.
 Recruiting outstanding top managers and cascading the full-required authorities.
 Continual refinement of effective systems of technologies acquisition what enforce it’s market share with selected
products.
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6. MARION’S PRODUCTS
 Marion was focusing on cardiovascular, gastrointestinal, burn and wound,
and musculoskeletal therapies to achieve it’s remarkable success in 60s.
 Meanwhile, there were trials to go for market expansion by acquiring
new technologies and products such as agricultural chemicals, health and
safety supplies, optical goods, and diagnostic devices but unfortunately,
didn’t achieve the expected financial target.
 Meanwhile, as such effort is positively counted for the workforce but it
required more study and attention to determine to successful
technologies those fit with the marketing plan and consumer behavior.
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7. PRODUCT INNOVATION AT MARION LABS
 Late 60s, Marion’s management recognized that a major organized effort would be required to bring in more
products to fuel the company’s growth, which was outstanding even in those early days because of its marketing
skills
 Powerful team was assigned exclusively to search for and acquire products from outside organizations.
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8. SAMPLE OF ACQUIRE PRODUCTS FROM OUTSIDE ORGANIZATIONS
Medicine Year Licensed from Solution of
Gaviscon 1970 Ferring AB of Sweden Over counter treatment for heartburn caused by acid reflux.
Marion voluntarily paid additional royalties to Ferring not
required by its agreement for the additional usage at Hiatal
Hernia
Silvadene 1974 Columbia University “ through a Research
Corportation”
Topical antimicrobial used in burn therapy.
Ditropan 1976 acquisition of North American rights from
Mead-Johnson Company
For relief of the symptoms of neurogenic bladder
Carafate 1981 Chugai Pharmaceutical Company Is a no systemic product with few side effects.
Cardtzem 1982 Tanabe Seiyuka Company Is a calcium channel blocker whose largest use is for the
treatment of angina
Cardizem
SR
1989 studies conducted by Marion, but
formulation was developed in collaboration
with Elan Corporation of Ireland
Treatment of hypertension
Integra 1981/1990 MIT and the Massachusetts General Hospital For burn life saving
Pentasa 1990 Ferring AB Treatment of inflammatory bowel diseases
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9. JOINT RESEARCH PROGRAMS WITH OUTSIDERS
 In the mid-1980s, when the acquisition of enough , products in a reasonably advanced stage of development was
becoming more and more difficult.
 It was essential for Marion’s scientific and technological competence to increase accordingly in parallel with the
increasing sophistication of the products and delivery systems being acquired.
 Marion was an early investor in “Nova Pharmaceutical Corporation” as a dedicated research entity.
 Investment formulated under a contract over a period of several years.
 The Nova relationship was an added learning curve for Marion R&D personnel to be active participants in the
management of such research.
 Marion encouraged to contribute with capital, made major research contract commitments, or both. Examples of
the universities in which some of the seminal research was done include the Universities of Colorado, California-
Berkeley, California-San Diego, and Groningen.
 Marion’s investments in scientific researches increased from $3 Million in1976 to become $133 Million in 1989.
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10. ACQUIRING PRODUCTS VS. PROCESSTECHNOLOGY
 Unlike other companies; Marion was interested in acquiring PRODUCTS, while other companies interested in
acquiring the mature PROCESS TECHNOLOGY it self.
 Such methodology could be successful for Marion at the early stage since it’s strength was in the marketing
operation.
 Although; the challenges and required experience at acquiring a mature ProcessTechnology, but it will add more
privileges and value to Marion’s market.
 In considering process technology; it is important to understand that acquiring certain key elements may be more
desirable than acquiring a total system.
 Acquiring a potential ProcessTechnology; requires more wise and patience from the company till the process it
self been fully tested and mature enough for application (example is Air Products and Chemicals, Inc, and
University of Glasgow)
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11. TAPPING DIVERSE SOURCES FOR ACQUISITION
 Large companies, small companies.
 Universities, research institutes, and university investigators and departments.
 Patents and publications.
 Brokering technologies.
 Regular face-to-face meetings with organizations known or believed to be working
on useful technologies.
• Present the capabilities of your company.
• Elicit information about other organization capabilities
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12. LESSONS LEARNED
1. Technology acquisition as a key corporate growth strategy can reduce the time required from formulation of an
original technical concept to its ultimate commercialization.
2. Technology transferring from the organization originating it to the company using it, requires a financial,
operational, and marketing proper assessment prior execution.
3. Risk of failure still exists, and the organization’s tolerance to accept is required, in addition to it’s honesty to
declare and deal with unaccepted results.
4. Organizing and staffing the technology acquisition functional team to carefully planned, executed, and supported
with required authorities and assessing techniques.
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13. LESSONS LEARNED
6. Involving the operating resources at the selection process to guarantee the digesting of the new technologies
and avoid resistances.
5. Technology acquisition team should be cross organizational and include trained representative from each
department (e.g.Technical, R&D, Finance, Marketing, Legal,…)
7. The research and engineering functions must adapt to a culture of technology acquisition as a major part of
their normal activities and to cope with the celebrated “Not Invented Here” factor.
8. The Organization’s should be open to deal with the basic technology originated in an outside group with
required enhancement as their own.
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14. LESSONS LEARNED
10. Involving the operating resources at the selection process to guarantee the digesting of the new technologies
and avoid resistances.
9. The ability to make decisions within a limited time frame is critical. Obviously, the very real problems and the
disadvantages, as well as the positive potential, and void the deadly “paralysis by analysis”.
11. Top management should establish the legitimacy of the technology acquisition function as an integral part of the
company’s growth effort, and not to bias or advocate of a particular technology and leave it to experts.
12. Top management should focus on objective and dispassionate analysis of failure in order to learn lessons for the
future, but must not seek to identify scapegoats.
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15. THANKYOU
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