CONTEMPORARY STRATEGIC MANAGEMENT IN GLOBAL CONTEXT_POSTER
Table of Contents
Section 1:
Company
Pfizer is an American International Pharmaceutical Company operating in more than 90 countries and headquartered in New York City, US. With an estimated revenue of US$ 51.75 billion and an employee base of 88,300 people, Pfizer Inc. is the number one organization in the global pharmaceutical drug manufacturing industry (pfizer.com, 2020).
Pfizer Vision;
“Inventing therapies to significantly improve the lives of the patients.”
| Internal Strengths
– Diversified portfolio in life-saving drug production – Listed as one of the best drug sellers – Widespread distribution network
|
Internal Weaknesses
– Illegal marketing and acquisition – Reduction in the R&D budget
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| External Opportunities
– Partnerships with big pharmaceutical companies – The emergence of new technologies in the pharmaceutical industry
|
SO:
Pfizer’s widespread distribution network can help it to make partnerships with big pharmaceutical companies across the globe. |
WO:
By implementing new technologies in the production, the company can cut down its operational cost which can be used in R&D
|
| External Threats
– Extreme competition in the market – Strict government regulations regarding healthcare products
|
ST:
Pfizer by promoting the power of its diversified portfolio and bestselling titles can defeat its competitors in marketing. |
WT:
Pfizer should act more legally in their marketing and acquisition that can help in following government regulations. |
Customers
Considering customers as the key source of success, Pfizer is practising both “business to business (B2B)” and the Prescriber model. In order to accumulate consumers’ perspective, the brand conducts surveys frequently and makes a half-yearly market place analysis. The pharmaceutical industry where the company is operating has accounted for US$1.2 trillion and thus an extremely promising market sector. The positioning and segmentation of the consumer in a strategic manner helps the organization to recognize the priority customer effectively. Pfizer’s customers belong from the;
- “Accident and health insurance Industry.”
- “Consumer Financial Services Industry”
- “Healthcare Facilities industry.”
Competitors
Even though the large size of the company delivers a competitive advantage, there are certainly some areas that are creating a competitive drawback. Exceptional financial revenue, increasing demand, the entrance of new companies, and excessive rivalry is making the pharmaceutical industry more intense and thus decreasing the overall profitability. Besides the growth of the Chinese pharmacy industry and their willingness to grab the American and European market by giving the drug at a relatively low price is slowly capturing a vital section of the market. Along with this, there are some other major competitors of Pfizer (statista.com, 2020).
Merck & Co: Specialized in manufacturing cancer treatments (estimated revenue- US$ 42.29 billion)
Novartis AG: Bestselling medicines for macular degeneration and cancer (estimated revenue- US$51.9 billion)
Bristol-Myers Squibb: Mass producer of lung cancer, oral anticoagulant treatment drugs (estimated revenue- US$ 26.15 billion)
Johnson & Johnson: Well known for producing “common household consumer drugs” and produces at affordable prices (estimated revenue- US$ 82.06 billion)
For fighting such completion, Pfizer needs to build sustainable differentiation and improved manufacturing scale and collaboration with some of its competitors.
Collaborators
Pfizer is looking for successful collaborations to build a strategic-contract relationship that can potentially transform their manufacturing legacy. With the intention of getting a breakthrough in the therapeutic section of the pharmaceutical industry, Pfizer is collaborating with companies like FoRx Therapeutics Press Release, Montis Bioscience Press Release. For combating the IT challenges, Pfizer merged with Warner-Lambert. Divisions of Pfizer’s collaborations include Immuno-oncology partnerships, R&D collaborations, Data collaborations, and scientific partnerships. It has a collaborations Datasphere, a platform for data sharing. In order to emphasize more on the tangible aspects like management style, IT system, and people, Pfizer is considering valuable partnerships.
Climate
PESTLE analysis of Pfizer in the context of its home country the US;
Political:
–Political lobbying in the pharmaceutical industry is restricting free trade of Pfizer
-Military invasion risk
-Increasing the corruption level in the healthcare sector of the US is creating financial risk for the organization
Economical:
–Global economic turmoil due to the coronavirus pandemic is constraining free overseas trading
-Discretionary income
Social:
-Poor reputational ranking of Pfizer is bad for its future venture
-Increasing concern of individuals towards health improvisation
Technological:
-Adoption of technologically advanced production facilities
-Government’s massive investment in R&D of the pharma industry
Legal:
-Pfizer operates in multiple countries and thus regulatory compliance from different operating countries is creating trouble
Environmental:
–Poor waste management from the company side
-Positive attitude toward eco-friendly or green products
-Investment in sustainability practices
Section 2:
The USA has been selected for a detailed analysis of Pfizer as it is the home country of the company and is one of the most emerging markets for the pharmaceutical industry.
- Political risk assessment
Surging price pressure in the US market is leading Pfizer to limit its pricing portfolio within a limited range which might cause them a huge monetary loss. The pharmacy industry has been predicted to lose nearly $50 billion within 2024 based on recent price politics.
- Threat of expropriation
According to the Fifth Amendment Clause of the US Court, no authority can expropriate property without giving proper compensation. This amendment diminishes the threat of expropriation for Pfizer in the US market.
- Mandatory labor benefits legislation
Under the “National Labor Relations Act of 1935” in the US, employers like Pfizer cannot interfere in their employee’s practice of organizing, reforming, or joining in a trade union. Such labor beneficial legislation is increasing the threat of labor union protest for the company.
- Recent forms of violence
Pfizer in the US has been accused of selling off-label products which is a violation of the “Good Manufacturing Practice (GMP)”. This excessively impacted the image of the brand in the market.
- Inflation and its impact
The US in 2021 can observe an inflation rate of 2%-4% which can majorly impact the production cost of new drugs (Tulum and Lazonick, 2018). It can negatively impact the value-based contracts of Pfizer.
- Increased taxation
An increase in America’s “corporate tax rate” will make the market less competitive. This will limit the external entry in the pharmaceutical industry which is a positive sign for Pfizer.
- Impact of Covid-19
The US has already registered 8.9 million Covid-19 cases which forced Pfizer to pause its ongoing and new clinical trials and restructure the R&D plans. However, Pfizer appeared to offer effective service during this pandemic.
Section 3:
- Web of Culture
Web of Culture for Pfizer is;
Stories: Diversification and Inclusion are the key purposes of Pfizer’s culture as CEO Albert Bourla said: “To be successful, the first thing a business must get right is its culture”.
Rituals: The Company offers innovative programs to ensure that its diversified workforce is providing long-term solutions for the customers.
Symbols: In 2018, Pfizer launched “Diversity & Inclusion programs” to make themselves as diverse as the customers and communities they serve.
Organizational Structure: The Company has nine operating divisions to manage service diversity.
Control System: The Company has been controlled by empowering their colleagues under the “OWNIT!” leadership values.
Power Structures: The operating teams across the organization work under the “ownership culture” where the managers always prioritize the team’s first.
- Cultural Influence
The OWNIT! Culture inaugurated in 2017 is a series of programs specifically designed for the managers, leaders, and colleagues to enable them for learning, accepting, and embracing the work opportunities and organizational objectives. It fosters an environment where employee’s passions are channelized towards integrity and serve the stakeholders completely. Under D&I program, 21,000+ colleagues, 105+ business leaders, 2000+ SBE suppliers of Pfizer are relentlessly working to “unlock its power to serve patients”. Over the past five years, the firm spent $3.4 billion on “Small Business Enterprises (SBE) Colleagues” and $2.8 billion on “Minority Women Business Enterprises (MWBE) Colleagues”.
- Ethics, Sustainability and Corporate Governance
Ethics: Pfizer follows dedicated internal standards and laws to ensure that the information shared with the stakeholders is scientifically proven, logical, balanced, helpful, and easy to acknowledge under the “Direct-to-Consumer Advertising” standards of the US (forbes.com, 2020).
Sustainability: Since 2017, Pfizer is working with “Business for Social Responsibility (BSR)”, a non-profit enterprise intended to build a sustainable world by addressing Human Rights like fair business operations, and production of eco-friendly products.
Corporate Governance: The governance structure of Pfizer is guided by official documents, “Corporate Governance Principles” and Committee charters to govern responsibilities of the “Board of Directors” as well as its committees.
- Balanced Scorecard
| Perspective | Goals | Measures |
| Financial Perspective | Increase the number of R&D sites in Asia, the US, and Europe (hbr.org, 2020). | Increase in the R&D budget up to $10 billion |
| Internal Business Perspective | Implement a global operational framework for developing effective pharmaceutical products and project engineering. | Implemented by 2022 |
| Customer Perspective | Meet the customer needs in therapeutic areas like rare disease and oncology. | Taking feedbacks from the customers |
| Innovation and Learning Perspective | Implement a facility center through and “Standard Operating Procedure (SOP)|” to scrutinize the assets, demographics, and internal system of the company. | Implemented by 2022 |
- Entry Strategy
The market entry strategy of Pfizer at the global level believes in three entry modes namely; Mergers, Acquisitions, and Joint Ventures. In order to amplify global market entry mode, the company collaborates with the existing private sector of that region. Following this, Pfizer merged with many organizations in the past. For instance, it merged with Warner-Lambert in 2001 which facilitated its R&D portfolio up to 85%.
Reference List
forbes.com, (2020), Pfizer Business outlook, Available at <https://www.forbes.com/sites/greatspeculations/2018/09/10/a-look-at-pfizers-business-and-outlook/> [Accessed on: 20:10:2020]
hbr.org, (2020), about balanced scorecard, Available at <https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2> [Accessed on: 20:10:2020]
pfizer.com, (2020), about Pfizer Pharmaceutical Company, Available at <https://www.pfizer.com/> [Accessed on: 24:09:2020]
statista.com, (2020), about biggest pharmaceutical companies, Available at <https://www.statista.com/topics/1719/pharmaceutical-industry/https://www.pfizer.com/> [Accessed on: 24:09:2020]
Tulum, Ö. and Lazonick, W., 2018. Financialized corporations in a national innovation system: the US pharmaceutical industry. International Journal of Political Economy, 47(3-4), pp.281-316. Available at <https://www.theairnet.org/v3/backbone/uploads/2019/02/Tulum-Lazonick.FCINIS-20190215.pdf> [Accessed on: 20:10:2020]