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Strategic Analysis of Pfizer Case Solution & Answer

Strategic Analysis of Pfizer Case Solution

  1. Introduction:

Pfizer is the pharmaceutical company with the largest research and development area and has huge investment in the market. It has wider market capitalization in the pharmaceutical industry. Pfizer has an integrated system of manufacturing drugs by first making research, develop, target, market and then sell its products to the end customers. It deals in the product which is for human health and animal health.

Pfizer is multinational company with almost $41,908 revenue in past years. It has almost 80 plants and spread in different countries of the world mainly; US, Belgium, Italy, Japan, France and Pakistan, Mexico, UK etc. It has top famous medicines which are the most lucrative like Lipitor (lower the cholesterol), Celebrex (reduces pain) and Eliquis (makes the blood thin). It directly deals with the hospitals,doctors and mainly with distributors. It also do campaigns on medical awareness, different health issues and the remedies for them.(John J.Scarcelli, 2017)

The strategic and financial operations of the firm are the effective and efficient in order to get the profitable and prominent position in the pharmaceutical industry. It has minimum 46.08m shares in the market outstanding in the past years with the current price of 34.74USD per stock. Moreover, the company position is well and foretasted to be higher in upcoming years. ((A.Cannella, 1989)

Company Background:

Pfizer was established by two German immigrants who came to USA named, Charles Pfizer and Charles Erhart. The pioneers started by taking loan and initiated their initial products which were anti-parasitic.(P.P. Kleutghen, 1985) Further they started making different products which gradually captured the higher market. In the starting, the company faced ups and downs and challenges which were as an incubated firm in the market.By the time, it made its product line broader and wider and became the top pharmaceutical company in the global pharmaceutical industry.(Taryn Vian S. C., 2007)

  1. SWOT Analysis:

SWOT analysis describes the internal position and the capacity of the firm. The firm is quite significant in terms of its internal capacity but there are some negative aspects as well which are described below.

 

Strengths

1.Expansion of the products which is directing to economies of scale

2.High profit generating

3.Research and developments

 

 

Weaknesses

1.Over reliance on the top products

2.Affected Brand Reputation

3.Loss on the Prime drug mainly Lipitor

 

 

Opportunities

1.Expansion in industry

2.New CEO conducts new outlooks

 

Threats

1.Changing industry

2.Cheap Substitutes

 

Strengths:

  • Expansion of the products which is directing to economies of scale

The company is having large size of products manufacturing which directly decreases its manufacturing costs and gives the advantage of economies of scales.(Author Baião, 2015)

  • High profit generating

The current position of the firm is quite profitable and the company has been generating the high revenue for the past years.

  • Research and developments

The strength of the firm is it has the finest research and development department which forecasts the market demand and adopts new ideas and also do different health awareness campaigns.

Weaknesses

  • Reliance on the top products

The weak point of the firm is that it has over dependency only on the top products. However, the other products are given less attention.

  • Affected Brand Reputation

When the company works with other firms so its market reputation is affected and a firm gets negative results because of some external factors.

  • Loss on the Prime drug mainly Lipitor

The company is facing loss on its prime product which is Lipitor because of the different competitor’s product which is mainly about reducing cholesterol.

Opportunities

  • Expansion in industry

The expansion in the pharmaceutical industry is a great opportunity for the Pfizer and it can have broader portfolio.

  • New CEO conducts new outlooks

The new CEO is bring advancements and the new outlooks in the company which is a great opportunity for the firm to increase and expand its business.

Threats

  • Changing industry

There is a threat for the industry is the changing of the industry which is quite beneficial for but also can be problem positional for some companies because of external factors.

  • Cheap Substitutes

The new entrants and the existing firms in the industry can have the substitutes in the lower price and can downsize the company’s sales. The main competitors of Pfizer are Abbott and Gsk.

  1. Porters Five Forces Model:

The Porter’s five forces model are used to analyse the external environment of the firm and its surroundings. The most important factor is the US pharmaceutical industry is giving chance to the firm to make the same products rather than identical which is creating direction competition in the market.

Internal Rivalry:

In the pharmaceutical industry, there is a huge competition among the companies. Every company tries to make the top famous product and increase its product line in order to take competitive advantage. As far the Pfizer is concerned, it has the Lipitor, which was the most lucrative product but because of the competitors and industry change, almost every company has the same product which is a now has many substitutes in the market.(Alnabhan, 2016)

Moreover, the industry change has given chance to every small company to make product and directly compete with the giants and big companies. Other than that, there is a direct competition with the giants companies as well like Gsk, Novartis and Abbott laboratories. It is now a challenge for company to be the no 1 in the industry and leave its competitor behind.

Threat of entry:

In the modern era, there is a great chance to do research and development and make the new product for the existing diseases. It is now easy for the new entrants to make research and make the product according to it with low costs. Nowadays, the industry change and its expansion made easier to the incubated firms to come ahead and make their good market position.

Pfizer has a threat of having new entrants in the market who can decline its market position and market capitalization. As the product line of Pfizer is vast even then it has threat of new entrants who can have the better R&D department which can go ahead among all firms.

On the contrary there is a threat of exit with the entry as well because if a firm gets bad image and public loose the trust on it, so they can exit from the market……………………….

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