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How to conduct strategic analysis
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Pfizer Analysis INTRODUCTION Pfizer is the largest American pharmaceutical company and one of the largest pharmaceutical companies in the world. It competes with Merck and Glaxo, and markets such well-known medications as Celebrex and Viagra. However, the pharmaceutical industry as a whole has undergone changes in recent years with significant consolidation taking place and with increased scrutiny regarding the ways in which drugs are developed, tested and marketed. In addition, recent controversies have erupted regarding Merck's drug Vioxx, and Pfizer has been the target of unwanted publicity regarding its painkiller Celebrex. This research considers the strategic position of Pfizer, including its strengths and weaknesses as well as the opportunities and threats that it faces, its strategic priorities and the acquisition strategy that it might follow. SWOT ANALYSIS Pfizer's primary strength is its size and expertise in the industry. Its reputation has suffered somewhat in recent months as controversy has surrounded the industry as a whole due to the Vioxx issue, and Pfizer has suffered because of its own problems with Celebrex. In general, however, the company's size gives it the ability to invest in new development that is necessary to succeed in the long-term. Pfizer's primary weakness is its lack of drugs in its pipeline and its inability to have new drugs approved for use. The company does not have significant drugs coming through the development process, at least not that will be ready for the market in the next few years. This puts the company in a weak position as it struggles with drugs that are already facing competition from generic alternatives. The highly successful epilepsy drug Neurontin lost patent ... ... middle of paper ... ...ong-run by developing strong new productsand a large variety of new productsrather than hoping that it will develop another blockbuster such as Viagra. REFERENCES Anderson, S. (2005, November 12). Pfizer says it eliminated 922 jobs in last quarter. The Ann Arbor News. Retrieved 12 Nov 2005 from: . Barrett, A. (2005, February 21). Henry McKinnell: Heroic measures. Business Week, p. 44. Berenson, A. (2005, October 21). Pfizer profit falls 5%. The New York Times, p. C7. Good business practices. (2005). Pfizer, Inc. Retrieved 12 Nov 2005 from: . Jarvis, L. (2005, October 21). Pfizer faces challenges to growth. Chemical Market Reporter, 266, p. 10. McTigue Pierce, L. (2005, July). Pfizer: Growth amid adversity. Food & Drug Packaging, 69, p. 60. Wood, A. (2005, August 10). Chemtura: Making a merger work. Chemical Week, 167, pp. 17-19.
In order to sustain the market share in this highly competitive industry, the pharmacies have to establish and maintain strong working relationships with PBMs that have power to divest particular clients from a pharmacy by denying reimbursement privileges to their customers. Buyer Power Strong It is not hard to obtain the same drugs from different sources, so the customer loyalty is virtually non-existent and the pharmacies have to try extremely hard to sustain their consumer base. Threats of substitutes Weak There are very few alternatives to drugs. Alternatives are practically limited to traditional medicine.
In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies.
The Clorox Company purchased Kingsford in 1973. Kingsford became one of the largest product groups within Clorox’s portfolio by 2000. Charcoal also represented a large percentage of Clorox’s revenues and net income. Therefore, a change in growth of the charcoal market would have a significant direct impact on Clorox’s annual sales and net earnings. Since the 1980’s Kingsford enjoyed growth in revenues ranging from a 1-3% increase each year. The charcoal industry had also experienced a steady growth as a whole. However, during the summer of 2000 charcoal sales declined and Kingsford’s summer results were projected to be below target. Clorox must now rely on Kingsford’s improvements in sales and profits to re-establish the company’s growth objectives. The two brand managers Marcilie Smith Boyle and Allison Warren will be challenged with determining the causes of decline, the impact of altering Kingsford’s current pricing, advertising, promotion, and production methods, and developing recommendations to increase profits.
...s: each was licensed to a much larger firm because the originator firm lacked the capability to market the drug. the larger analysis of blockbuster drugs showed that this thread is common across blockbusters that originated with smaller firms. The largest firms appear to hold a significant advantage in commercialization—they are highly effective at extracting the value of innovative drugs . The study suggests some qualified reasons for skepticism that the end of the blockbuster era will bring a major upheaval in the industry. Large firms’ advantage in commercialization suggests that they may maintain their dominant position. Marketing of pharmaceuticals may move from broad-based to targeted approaches, but a company with a broad reach may still have an advantage in identifying markets for niche drugs and commercializing the drugs within those more narrow market
On the basis of these findings, I recommend that Johnson & Johnson is a considerable place for employment for someone who is seeking to be part of a pharmaceutical organization
The Procter and Gamble Company. (2013, November 17). Company Strategy. Retrieved March 22, 2014, from http://www.pginvestor.com: http://www.pginvestor.com/GenPage.aspx?IID=4004124&GKP=208821
Although Lafley has had success, the underlying problem remains. How will Lafley return P&G to its rightful place in Corporate America? P&G's solution to its problems is through product line extensions, expansion into non-premium brands, as well as acquisitions, licensing, reinforcing market orientation through consumer focus, and outsourcing. This recommendation was based on following items;
Johnson & Johnson is one of the most successful companies and it can still be if it maintains doing the right thing continuously. They should keep being smart and fast decision makers to always be on top and ahead of their competitors.
Macroeconomic Forecast Pfizer, Inc. - Pfizer, Abstract This paper is a Macroeconomic Forecast Outline of Pfizer, Inc. This outline will identify the main economic indicators for Pfizer as a business entity and as a representative of the pharmaceutical industry. This paper will identify sources of various data collected based on economic activity and relationships between different economic indicators.
The first social problem surrounding the health care system in the United States is the growing problem with pharmaceutical companies. The industry averages a 17% profit margin and it has been booming for decades, but the industry is being heavily led by a core group of companies (Dr. Pratt). “In 1992 the top 10 companies accounted for roughly one-third of global pharmaceutical revenue, after a period of consolidation, by 2001 the top 10 accounted for nearly half.”( Leon-Guerrero, Zentgraf, 172). These companies hold a large majority of the market share and make most of their money off patented drugs. This growing core of companies that are dominating the market are causing more problems rather than solving them. These companies are all about making as much money as they can and it shows through the salaries of the executives of these companies (Dr. Pratt). The pharmaceutical industry should have their number one priority be to the users of their products rather than profit gains.
Pfizer also provides their Medical and Academic partnership grant, which rewards industrious employees with grants to pursue their own ideas or partner with medical professionals. Pfizer did have to implement cutbacks, 10 percent of their employees, but still receives a high job satisfaction rating of 73% from its employees. The opportunities provided are a big part of that
Alan G Lafley, the former CEO of Procter & Gamble, once said “Let’s execute along this strategy, but know that we’ll probably get some of this wrong, so be open to changing it (AZQuotes.com). Procter and Gamble has undergone many strategic changes in the last 15 years which have had a profound impact on the company’s profits and market share. The strategic changes that Procter & Gamble has undergone have been both positive and negative. While it is important to document the financial impact of the changes under Alan Lafley, it is also important to track the changes and growth under the current CEO David S. Taylor, while also showing Procter & Gamble’s competitive advantage.
Once America’s most innovative consumer products company, Procter and Gamble (P&G) started by selling soaps and candles in a small Cincinnati storefront in 1837 (Procter and Gamble, 2008). After a hundred and seventy-one years P&G has grown to over one hundred household brands in over eighty countries (Markels 2006). Their products range from air fresheners to prescription drugs. However, as P&G headed into the twenty-first century they announced that they would not be meeting their 1st quarter earnings forecast [Lafley, 2003]. Revenue margins were dropping and P&G was quickly losing market share to Kimberly Clark and Johnson & Johnson. After missed earnings P&G’s stock price fell from $59.18 to $26.50 between January 2000 and March 2000 (PG). Upset, the board of directors pressured then CEO Durk Jager to resign after a lack luster attempt at turning P&G around and replaced him A.G Lafley, an unproven CEO, whom analysts felt lacked the experience to give P&G a much needed clean up (Lafley, 2003).
This allowed Pfizer to make decisions based on patterns and trends before other companies. The ability to use real-time data to drive the decision process based on market trends could be considered a competitive advantage for Pfizer.
“Our products are available in over 100 countries; sales in 2005 totalled $24 billion, with an operating profit of $6.5 billion; we spend over $14 million every working day on the research and development of new medicines that meet patient needs (total R&D spend in 2005: $3.4 billion); we employ around 12,000 people in research and development at 11 R&D centres in seven countries: Sweden, the UK, the US, Canada, France, India and Japan; we have some 14,000 people at 27 manufacturing sites in 19 countries, in total, we employ over 65,000 people worldwide: 58% in Europe, 28% in the Americas and 14% in the rest of the world” (AstraZeneca, 2006).