Cost-Cutting Concerns
We were pleased to see the Business Journal’s coverage of Progressions, Ernst & Young LLP’s latest report regarding the global pharmaceutical industry (“OC Drug Makers Disagree with E & Y; Financial Survey,” Dec. 8 issue). To clarify an important finding in the report, we wish to emphasize that this study involved a broad cross-section of senior executives from pharmaceutical companies who did in fact express a continued concern about controlling costs. Forty percent of the executives surveyed actually ranked optimizing costs as their most important initiative.
The change from previous Ernst & Young survey results is that large pharma companies that participated in the survey have moved away from, or in some cases exhausted, traditional cost-cutting methods, such as cutting discretionary spending. This approach may provide instant gratification, in the form of short-term expense reductions, but can jeopardize long-term growth. Instead, many pharma companies are now embracing a more holistic approach to managing costs to maximize investments and encourage a culture of cost discipline. When properly managed, these initiatives should allow companies to “grow lean” and prosper through the economic crisis.
The pharma industry is in a relatively advantageous position to weather the current economic conditions despite unique pressure points on the industry, such as pricing, regulatory pressures and thinning drug pipelines. Pharma companies were already preparing for change, but the challenging economy forces companies to execute long-term growth strategies more rapidly. Each company will draw on its unique strengths and circumstances to forge its own strategy for success. The companies that succeed will be those most committed to transformational execution.
Mark B. Hassenplug, global pharmaceutical markets leader and key accounts partner at Ernst & Young
Anaheim Meetings
I just wanted to point out an omission in the Dec. 15 article, “Economic Slowdown Stands to Catch up to Tourism in 2009.”
The statement that there are 41 conventions set for Anaheim next year, compared to 38 in 2008, is missing an important piece of information that may have been omitted.
Actually, there are 41 “citywide” conventions set for next year. This refers to groups that are using multiple hotels for their events.
This by no means is the total.
As of right now there are 604 meetings and conventions booked into the Anaheim Convention Center and surrounding area hotels for 2009.
Of those, 66 are utilizing the Anaheim Convention Center for their primary meeting.
Elaine Cali
vice president of communications
Anaheim/Orange County Visitor & Convention Bureau
Tribune Insight
I am proud to say it was a business journal that had the best insights into the unfolding Tribune debacle, and that was Rick Reiff’s OC Insider column of Dec. 15.
He quoted former L.A. Times reporter Henry Weinstein, now a professor at UC Irvine’s law school, to the effect that employees will try to be heard in bankruptcy court.
This is the most important angle of the Tribune story: Can Trib employees organize, form alliances with creditors and forge a new Tribune going forward, shorn of debt and Sam Zell?
The answer is yes, but employees need to be active, and get to know who sits on the creditors committee.
Keep up the good work.
Benjamin Mark Cole
(Cole, a public relations professional and freelance financial writer, is a former staff writer for the Los Angeles Business Journal)
