Rizwanhussain87@yahoo.

com
1.
2.
3. AN INTRODUCTION TO PFIZER
Pfizer Inc, founded in 1849, is dedicated to better health and greater access to healthcare
for people and their valued animals. Our purpose is helping people live longer, healthier,
happier lives. Our route to that purpose is through discovering and developing
breakthrough medicines; providing information on prevention, wellness, and treatment;
consistent high-quality manufacturing of medicines, consumer products; and global
leadership in corporate responsibility. Every day we help 38 million patients, employ
more than 100,000 colleagues, utilize the skills of more than 12,000 medical researchers,
and work in partnership with governments, individuals, and other payers for healthcare to
treat and prevent illnessesadding both years to life, and life to years.
Pfizer is a research-based global pharmaceutical company. Pfizer discovers, develops,
manufacturers and markets leading prescription medicines for humans and animals, as
well as many of the worlds best-known over-the-counter medicines and consumer
healthcare products.
Pfizer operates through five distinct divisions:
1. Pfizer Global Research & Development PGRD
PGRD is dedicated to drug discovery and to the development of
medicines ready for the market.
2. Pfizer Global Manufacturing PGM
PGM is the manufacturing and largest division of Pfizer Inc. PGM
supports our global manufacturing and distribution of Pfizer products.
3. Pfizer Global Pharmaceuticals PGP
PGP markets a wide range of prescription-only medicines and
consists of all the commercial departments responsible for supporting
the business.
4. Pfizer Animal Health PAH
PAH provides some of the most innovative and successful medicines
for companion animals and livestock.
5. Pfizer Consumer Health Products Company PCH
PCH is responsible for the sales and marketing of all consumer
healthcare products, over-the-counter medicines, and other health
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related and personal care products.

The company produces the impotence treatment Viagra, cholesterol lowering Lipitor and,
for high blood pressure and angina, Norvasc. The animal division produces treatment
both for livestock and pets. The company's consumer division produces the consumer
drugs Listerine, Certs, Dentyne. Pfizer engages in international business both through
their subsidiaries and distributors. The company's headquarters are located in New York,
US.

3.1 HISTORY
1849 - 1899
In 1849 cousins Charles Pfizer and Charles Erhardt founded Charles Pfizer &
Company in a red brick building in Brooklyn, NY.
1900 1950
The new century brought prosperity to Pfizer. The pioneering of the mass
production of citric acid from sugar through mold fermentation fueled growth for
years.
1951 1999
The second half of the 1900's saw intense research and great successes for Pfizer.
2000
After successfully merging with Warner-Lambert and Pharmacia to create the
world's fastest-growing major pharmaceutical company, Pfizer continues its
mission to become the world's most valued company to patients, customers,
colleagues, investors, business partners, and the communities where we work and
live.
2001
In June 2001, Hank McKinnell announces a new mission for Pfizerto
become the world's most valued company to patients, customers, colleagues,
investors, business partners, and the communities where we work and live. In
July, he announces a commitment to fund the building of a regional treatment
and training center on the campus of Makerere University in Kampala, Uganda
as part of the Academic Alliance for AIDS Care and Prevention.
Pfizer launches Geodon (ziprasidone hydrochloride), a new antipsychotic
for the treatment of schizophrenia.
2003
Pfizer Inc and Pharmacia Corporation combine operations, bringing together
two of the world's fastest-growing and most innovative companies
Pfizer launches Relpax (eletriptan HBr), a medication developed specifically
for the treatment of migraines.
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2004
Caduet (amlodipine besylate and atorvastatin calcium), the first single pill that
treats both high blood pressure and high cholesterol, is launched.
2005
Pfizer launches Lyrica (pregabalin), the first treatment approved by
the U.S. Food and Drug Administration to treat two distinct forms of
neuropathic pain associated with diabetic peripheral neuropathy (DPN),
postherpetic neuralgia (PHN) and adjunctive treatment of partial onset
seizures in adults with epilepsy.
2006
Pfizer's roster of outstanding drugs grows with the launch of Sutent (sunitinib
malate), a new, oral, multikinase inhibitor to treat patients with metastatic renal cell
carcinoma (mRCC), or advanced kidney cancer, and gastrointestinal stromal tumor
(GIST) after disease progression on, or intolerance to, imatinib mesylate.
Pfizer launches Eraxis (anidulafungin), a new medicine to treat certain infections
caused by Candida, a yeast-like fungus that can cause serious infections in hospitalized
patients or patients with compromised immune systems.
Exubera (insulin human [rDNA origin]) Inhalation Powder, the first diabetes
treatment for adults with type 1 and type 2 diabetes that can be inhaled, is launched by
Pfizer.
Chantix (varenicline), a prescription medicine to help adults stop smoking, is
launched by Pfizer.

3.2 COMPANY PROFILE

CEO (Pfizer Inc., New York, USA):

Henry A. McKinnell, Ph. D.

Country Manager Pakistan:

Iqbal Bengali

Head Office in Pakistan:

Khi.

12 - Dockyard Road, West Wharf,

Manufacturing Facilities in Pakistan: Karachi and Islamabad.

Subsidiaries of Pfizer Inc., USA:
Pakistan

Pfizer Laboratories Limited,

Parke, Davis & Company Limited

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Pharmacia Pakistan Limited

http://www.pfizer.com.pk

Website Address:

Key Pfizer Pharmaceutical

Products:

Aromasin Relpax
Caduet
Revatio
Camptosar Spiriva
Celebrex Sutent
Chantix
Vfend
Detrol/DetroViagra
l
Xalatan/Xalacom
Exubera

Genotropin Zmax
Lipitor
Zoloft
Lyrica
Zyrtec
Norvasc
Zyvox

Key Pfizer Consumer Health Care

Products:

Benadryl
Cortizone
Desitin
Listerine

Key Pfizer Animal Health Products:

Clavamox/Synulox
Equimax
Naxcel/Excenel
Rimadyl
Dectomax
Respisure/Stellamune
Revolution/Stronghold

Lubriderm
Rolaids
Sudafed
Visine

3.3 CORPORATE PHILOSOPHY

At Pfizer, the importance of creating an inclusive environment where diversity
of background, thought and experience is practiced and valued. Our policies
reflect that philosophy by mandating equal treatment for all employees globally
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without regard to sexual orientation, gender identity or gender expression. So too

does our recognition of same-sex domestic partners for benefits ranging from
medical coverage to adoption assistance as well as our thriving LGBT networking
groups, which are involved with many charitable and educational activities both
within Pfizer and in their local communities. Pfizers score of 100% for the
Human Rights Campaign Corporate Equality Index for the second consecutive
year reflects our active commitment to attracting, developing and retaining the
most talented workforce available.

3.4 VISION STATEMENT

TO BE BEYOND NUMBER 1
BY WORKING TOGETHER
WITH OTHERS, WE CAN DO
MORE GOOD FOR MORE
PEOPLE THAN ANY OTHER
COMPANY ON THE PLANET."

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1.5 PFIZER MISSION STATEMENT

WE WILL BECOME THE WORLDS MOST

VALUED COMPANY TO PATIENTS,
CUSTOMERS, COLLEAGUES, INVESTORS,
BUSINESS PARTNERS AND THE
COMMUNITIES WHERE WE WORK AND
LIVE

Evaluating PFIZERS mission statement on 9 Elements

A good mission statement should comprise of the following elements:

Customers
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 Products and services

Market
Technology
Survival, growth & profit
Philosophy
Self-concept
Concern for public image
Concern for employee
The three features missing in Pfizers mission statement are

Products/services
Technology
Concern for survival and growth
Concern for employees

1.6 RECOMMENDED MISSION STATEMENT

WE BELIEVE OUR FIRST RESPONSIBILITY IS TO THE DOCTORS, NURSES AND PATIENTS ALONG WITH
THE INSTITUTIONS WHO USE OUR PHARMACEUTICAL PRODUCTS. WE ARE DEDICATED TO THE TOTAL
SUCCESS OF PFIZER AS A WORLDWIDE COMPETITOR THROUGH THE EFFECTIVE USE OF LATEST
TECHNOLOGY. IN THIS RESPECT THE COMPANY WILL CONDUCT ITS OPERATIONS PRUDENTLY AND
WILL PROVIDE THE PROFITS AND GROWTH, WHICH WILL ASSURE PFIZERS ULTIMATE SUCCESS. WE
WILL ACHIEVE CORPORATE SUCCESS THROUGH A FIRM COMMITMENT TO PROVIDE CUSTOMERS
HIGH QUALITY PRODUCT TO THEIR ULTIMATE SATISFACTION. WE WILL VIGOROUSLY PROMOTE AND
SAFE GUARD THE INTEREST OF OUR EMPLOYEES, OUR SHAREHOLDERS, OUR SUPPLIERS AND ALL OUR
OTHER BUSINESS ASSOCIATES. WE SHARE OUR OBLIGATION TOWARDS THE WORLD IN THE
PROTECTION OF THE LIFE, HUMANITY AND ENVIRONMENT.

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2 PHARMACEUTICAL INDUSTRY IN
PAKISTAN
The pharmaceutical industry of Pakistan comprises of over 400 manufacturing
units including 31 multinationals, besides 10,000 retail chemists, 6,000 drug
wholesaler/distributors and about 1,500 importers. Total sales of Pharmaceutical
products, both locally manufactured and imported, in a year (from march 03 to
march 04) was reported Rs. 60 billion1, out of which 55% sales ( Rs.33 billion)
comes from multi national companies while remaining is distributed among local
pharmaceutical companies of Pakistan.

2.1 INDUSTRY HISTORY

The foundation of the pharmaceutical industry of Pakistan was formally laid in
1950 with the establishment of local subsidiaries of foreign firms and formulation
of imported raw material based medicines by local entrepreneurs. By 1980, 170
pharmaceutical companies were set up in the country of which 150 were local
companies and 20 were multinational firms. The industry was able to attract
considerable investments as more firms and local entrepreneurs entered the
industry due to its high profitability and prospects for growth.

2.1.1 INDUSTRY STRUCTURE2

The pharmaceutical industry of Pakistan is a highly fragmented industry. The
Multinational companies in Pakistan hold 55% of the share in the market while
the local manufacturers hold the rest, the table below shows the top 15
pharmaceutical companies in Pakistan, along with their annual sale and market
share.
1
2

Source: International Medical Statistics.

International Medical Statistics

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2.2

COMPANYS MARKET SHARES

S.N
O

COMPANY

SALES (DEC 0405)

MARKET
SHARE

RS.
1.

GSK

7,987,750,135

13.20%

2.

Abbott

2,904,640,250

4.80%

3.

Aventis

2,699,991,179

4.46%

4.

Novartis

2,268,555,782

3.75%

5.

Pfizer Upjohn

1,861,564,832

3.08%

6.

Merck Marker

1,834,187,026

3.03%

7.

Wyeth

1,442,285,909

2.38%

8.

Roche

1,356,600,371

2.24%

10.

Bristol Myers

1,250,593,204

2.07%

11.

Parke Davis

1,180,453,290

1.95%

12.

Merck Sharp Dohme

1,143,787,197

1.89%

13.

Nestle

1,062,838,419

1.76%

14.

AGP

988,883,618

1.63%

15.

Knoll

975,283,711

1.61%

16.

Searle

957,283,711

1.58%

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17.
Total

Others

29,364,541,868
60,536,968,907

48.89%
100%

3 MACROENVIRONMENT ANALYSIS AND

INDUSTRY ATTRACTIVENESS
3.1 Analysis of the Industry Using Michael
Porters Five
Competitive Forces

Potential
Entrants
High

Moderate

Suppliers

Industry
Competitors

Low

Buyers

Rivalry Among
Existing Firms

High

High

Substitutes

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3.1.1 THREAT OF NEW ENTRANTS

Entry in Pharmaceutical industry of International standard require high level of

market understanding and technological know how it needs all in one skill,
knowledge and abilities of the employees and advanced manufacturing and
laboratory system which needs a large sum of investment but in Pakistan the
situation is quite different because of Governments inclination towards
National pharmaceutical industry and corruption in providing licenses to them.
3.1.2 BUYERS
The prices of medicines are fixed and it is an emergency good people are bound
to buy them for their cure from disease or prevention so there is no bargaining
power of buyers in pharmaceutical industry.
3.1.3 SUPPLIERS
Pharmaceutical industry has various suppliers of raw materials and packaging.
Glass industry is one of the major suppliers of the pharmaceutical industry;
agriculture sector is also required for supply of the plants to get some extracts
from them, biochemical industry other packaging materials like aluminum,
paper, and plastics.
3.1.3 SUBSTITUTES
There are substitutes available in form of herbal and homeopathic medicines
and various house hold cures.
3.1.5 EXISTING COMPETITORS
The competitors in pharmaceutical industry are all those who have extensive
knowledge about there products and are manufacturing high quality
medicines. In terms of generic medicines industries face a tough competition.

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3.1.1 THREAT OF NEW ENTRANTS

CRITICAL FACTORS

YES
(+)

1) Do large firms have a cost or

performance advantage in your
segment of the industry?
2) Are there any proprietary differences
in your industry?
3) Are there any established brand
identities in your industry?

NO
(-)

4) Do your customers incur any

significant costs in switching suppliers?

5) Is a lot of capital involved to enter

your industry?

6) Is serviceable used equipment

expensive?

7) Does the newcomer to your industry

face difficulty in accessing distribution
channels?
8) Does experience help you to
continuously lower cost?
9) Does the newcomer have any
problem in obtaining the necessary
skilled people, materials or supplies?
10) Does your product or service have
any proprietary features that give you
lower costs?

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11) Are there any licenses, insurance or

qualifications that are difficult to obtain?

12) Can the newcomer expect strong

relation on entering the market?

Low

Moderate

High

There is high threat of new entrant because of governments favorable policy for
the local pharmaceutical firm. Most of the new companies do not even have the
valid license they can easily get it through bribery or there influences.

3.1.2 BARGAINING POWER OF BUYERS

CRITICAL FACTORS

YES
(+)

1) Are there a large number of buyers

relative to the number of firms in the
business?
2) Do you have a large number of
customers, each with relative small
purchases?
3) Does the customer face any
significant costs in switching suppliers?
4) Does the buyer need a lot of
important information?

NO
(-)

5) Is the buyer aware of the need for

additional information?
6) Is there any thing that prevents your
customers from taking your function in
house?

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7) Your customers are not highly

sensitive to price?

8) Your product is unique to some

degree or has accepted branding?

9) Your customers business is

profitable?

10) You provide incentives to the

decision makers?

|
Moderate

Low

Strong

Customers are bound to buy pharmaceutical products due to their sensitive

nature. Buyers are neither the decision makers nor they have required
information or skills to take a decision. They have to rely upon the advice of their
doctors.
Due to a lot of similar brands with little or no difference, buyers have acquired
the power to buy the cheaper one and to reject the expensive one. But this power
is simply not effective in brands with high differentiation.
There is a low bargaining power of buyers because the prices are controlled by
government regulatory authorities and also change due to currency rates and
inflation rates. Medicines are life savers which the customers are bound to buy
for their wellbeing.

3.1.3 THREAT OF SUBSTITUTES

CRITICAL FACTORS

YES
(+)

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NO
(-)

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1) Substitutes have performance

limitations that do not completely off
set their lower price. Or, their
performance is not justified by their
higher price?
2) The customer will incur costs in
switching to substitutes

3) Your customer has no real substitute

4) Your customer is not likely to

substitute?

Low

|
Moderate

Strong

There are a lot of generic products emerging in the industry lowering the overall
profitability of the industry. Availability of the herbal and homeopathic
medicines increases competition and the threat of substitutes. Increased
competition for Viagra as its high cost encourages use of cheaper alternative
treatments. Generic products are in rise, as people tend to spend lesser amount
on allopathic medications because of slow economy. There is a moderate to
strong threat of substitutes because of availability of the herbal and homeopathic
medicines and customers illiteracy rate. They get the cure from these medicines
along with this there has been a failure towards the governments end to washout
fake and smuggled medicines from the market.

3.1.4 BARGAINING POWER OF SUPPLIERS

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YES
(+)

NO
(-)

1) My inputs (materials, labor, supplies,

services, etc) are standard rather than
unique or differentiated?
2) I can switch between suppliers
quickly and cheaply?

3) My suppliers would find it difficult to

enter my business or my customers
would find it difficult to perform any
function in house?
4) I can substitute inputs readily?

5) I have many potential suppliers?

6) My business is important to my
suppliers?

7) My cost of purchases has no

significant influence on my overall
costs?

Low

Moderate

Strong

There is moderate to low bargaining power of the suppliers because

pharmaceutical industry have specialized suppliers and those suppliers
are also dependent on the pharmaceutical industries for the well being
of their business. The raw material which is supplied to the
pharmaceutical companies like chemicals, glass, plastic etc also has
regulated prices which are affected by the government policies and
economical changes.

3.1.5 DETERMINANTS OF RIVALRY AMONG

EXISTING COMPETITORS
CRITICAL FACTORS

YES
(+)

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NO
(-)
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1) The industry is growing rapidly?

2) The industry is not cyclical with

intermitted over capacity?

3) The fixed costs of the business are

relatively low portion of total costs
4) There are significant product
differences and brand identities between
the competitors?
5) The competitors are diversified rather
than specialized?

6) It would not be hard to get out of this

business because there are no
specialized skills and facilities or long
term contract commitments, etc
7) My customers would incur significant
costs in switching to a competitor?
8) My product is complex and requires a
detailed understanding on the part of my
customer?
9) My competitors are all of
approximately the same size as I am?

Low

|
Moderate

Strong

There is a moderate to high competition among competitors in terms of brand

equity because prices are regulated by government and political forces so they
need to build strong consumer loyalty to remain in business.
MNCs are using their superior technology and research and development skills
to introduce new products tailor made for specific target market needs, On the
other hand, national companies are offering low prices and trying to outclass
MNCs in a price war.
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The rivalry is not only among national and multinational companies, National
companies are against each other on battle field of cost management to offer
FAVOURABLE
Threat Of
New Entrants
Bargaining
Power Of
Buyers
Threat Of
Substitutes
Bargaining
Power Of
Supplier
Intensity Of
Rivalry Among
Competitors
TOTAL

MODERATE

UNFAVOURABLE

21

16

lowest possible cost, same as; MNCs are striving to outclass each other through
advanced products based upon research and technology.

3.1.6 OVERALL INDUSTRY RATINGS

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3.2 PEST ANALYSIS

The factors that affect any industry are:
1. POLITICAL FACTORS: The government designed policies and laws for the
operational functions of the pharmaceutical industry tax and trade laws etc.
2. ECONOMIC FACTORS: The ups and downs in the market prices, currency
rates, currency exchange rates are the factors that influence the pharmaceutical
industry.
3. SOCIAL FACTORS: Peoples awareness about the importance of medicines
there trend to get a cure for there diseases.
4. TECHNOLOGICAL FACTORS: The manufacturing and operational systems
through which medicines are manufactured and processed. Technology in
modern organizations is the know-how, the Equipment, the experience, the
knowledge and skills that are required for better production and better service.
Growth in R&D activities is an important factor affecting the industry.

3.2.1 POLITICAL FACTORS

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Following political factors are affecting the pharmaceutical industry:

Multilateral laws
All the pharmaceutical industries have to comply with the rules that are
formulated by WHO and Intellectual Property Rights (TRIPS). Along with that
there is strong government influence in pricing strategy of the industry.

Political disturbance
Local pharmaceutical industry also suffers because of the political disturbances
in the country like strikes in both public and private sectors.
Legal factors
Ministry of healths strong regulations about the pharmaceutical industry for
launching new medicine and changing the prices for the specific medicine has
affected the profit margin of the industry.

Easy issuance of license to sell drugs to the local companies has increased the
price competition in the industry there are 370 national pharmaceutical units
while 30 MNCs.

Import Duty
Import duty on the raw material for the medicine is quite high (35%) which
increase the cost of manufacturing the medicine and strict regulation about the
price increase inversely affect the profitability of the industry. Most of the import
takes place from UK, Switzerland & India.

Pricing policies
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In Pakistan, government decides the price for pharmaceutical products, since the
past 4 years government has not allowed increasing the prices of pharma
products. This creates problem with profitability of products and keeps back
companies to profit from their new innovative products

Strict government control over pricing has made many medicines uneconomical,
with the result that they either become available only on the black market at
inflated prices, or disappear completely. In this environment, manufacturers,
both local and foreign-owned, have proved unable to generate the profits needed
for capital investment. This is not helped by a regulatory system best described as
rudimentary.
There is virtually no public drug reimbursement or IP protection; patent law was
officially tightened in December 2000, although the effectiveness of this has been
questioned. In 2002, further changes were made, making Pakistan's IP laws even
weaker Prices of medicines are officially controlled, although the government
lacks the capacity to enforce its policies in this area. Some price rises have been
allowed since 2000, but the current government shows little sign of enacting any
serious reform of the pharmaceutical sector, preferring to allege profiteering on
the part of the pharmaceutical industry.
Import Law
An import law allowing Indian-made drugs to enter the market was signed in
June 2005, although after several months, not one permit has so far been issued.

3.2.2 ECONOMIC FACTORS

A cost increase of 90% for pharmaceutical industry has arisen over the last five
years generated by three factors - an inflation of 76%, a devaluation of Pakistani
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currency by 85% in relation to the U.S. Dollar, and an introduction of duties of

10% beginning June 1996.
Insufficient price increases which do not compensate for the cost increases for
"Controlled" medicines, the price increase was only 21% in the last five years for
"Decontrolled" medicines, and the price increase was only 29% in the last five
years.

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3.2.3 SOCIAL FACTORS

Low human development
Like homeopathic, and hakimi products, due to the fact that more than half of
the population of Pakistan is poor and uneducated and they often resort to
cheaper medicines used by their fore fathers.
Viagra Registration
One opportunity that company seeks is the registration of Viagra in Pakistan.
Pakistani government has banned Viagra in Pakistan due to some ethical and
religious reasons but Pfizer claims that except for in Pakistan Viagra is being sold
in all Muslim countries including Saudi Arab. According to a WHO report, there
are 25% spurious/counterfeit/substandard drugs in the under developed
countries. About 10% on the whole world markets, including the developed
countries have such medicines.
Self Medication
Low literacy rate cause self medication or going to the chemist for reference
instead of doctor to save the cost.

3.2.4 TECHNOLOGICAL FACTORS

Pharmaceutical Products for incurable diseases
By using its financial and human resources of Research and Development, Pfizer
can make great contribution to the world by creating pharmaceutical products
for AIDS, HIV and Cancer.
Research and Innovation
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Rapid technological advancement and the development of the new methods to

cure diseases have affected the industry. New medicines for fatal diseases are the
growing sector of the industry like Cancer drugs, Hepatitis drugs and vaccines,
AIDS drugs, diabetes medicines etc.

Emerging Diseases
Now pharmaceutical industry after the coming of viruses like bird flu, anthrax,
Dengue Virus is involved in extensive R&D to find the cure or vaccines for these
diseases.

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3.2.6 EFFECT OF PEST ON PORTERS FIVE

FORCES
Factor and

Opportunity

Buyer

Supplier

New

Substitute

Rivalry

Effect
or Threat
Research
and Opportunity

Power
Low

Power

entry
Low

Low

High

Innovation
Emerging

Opportunity

Low

High

High

High

Opportunity

Low

Low

Low

Low

Threat
Opportunity

High

High
Low

High
Low

High

High

High

High

High

Low

High

High

Low
High

High
High
High
High

Low

Diseases
Pharmaceutical
Products

for

incurable
diseases
Self Medication
Viagra

Registration
Low
human Threat
development
ECONOMIC

Threat

FACTORS
Import Law
Pricing policies
Import Duty
Legal factors
Multilateral

Threat
Threat
Threat
Threat
Opportunity

High
High
High

High
High

Low
Low
Low
High
Low

laws

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3.3 EXTERNAL FACTOR EVALUATION MATRIX

In the CPM it reflects clearly that GSK is highly competitive with 3.25, followed
by ABOTT and PFIZER. The product quality of all the three companies is very
strong. The market share of GSK (market leader), ABOTT, and PFIZER is 7%, 4%
and 3.08% respectively.

(EFE)
KEY EXTERNAL FACTORS

WEIGHT RATING

WEIGHTED
SCORE

Opportunities
1. Customers interest and
preference for buying foreign
.15
medicines rather than local
medicines

.45

2. Increased awareness about

allopathic mode of medicine

.08

.24

3. Pakistan has a population

growth rate of 2.6% per
annum. Higher population
growth means that there
would be a larger market
available for the
pharmaceutical industry.

.05

.20

4. Emerging diseases

.12

.36

5. Acquisition of local
companies

.12

.12

6. Governments interest in
having trade with India in
medicines

0.05

.10

7. Allowing of TRIPS to have

parallel trade on some generic 0.06
medicines.

.12

Threats
1. Continued weakening of the .10
PKR & fluid GOP policies
will put pressure on profit

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.20

26

margins & can impede sales

2. The sale of FAKE AND
SMUGGLED MEDICINES at .06
low prices

.18

3. Economic
fluctuations

.09

.18

.06

.24

5. Government inclination of
encouraging more national
pharmaceutical companies

.11

.22

6. Self medication

0.05

.15

7. Strong brand name of major

competitors such as GSK,
ABBOTT.

0.06

.18

TOTAL

1.00

and

political

4. Use
of
herbal
homeopathic medicines

and

2.94

3.3.1 Interpretation of EFE Matrix

The Total Weighted Score of 2.94 in the External Factor Evaluation (EFE) Matrix
denotes that Pfizer is responding in an average way to existing opportunities and
threats in the Pharmaceutical Industry. In other words, Pfizer strategies are only
ordinarily taking advantage of existing opportunities and somewhat minimizing
the potential adverse effect of external threats.
The strategic signals Customers interest and preference for buying foreign
medicines rather than local medicines Emerging diseases, Acquisition of local
companies, Continued weakening of the PKR & fluid GOP policies will put
pressure on profit margins & can impede sales, Government inclination of
encouraging more national pharmaceutical companies) from the EFE are giving a
clear picture of their opportunities and industry threats, on which Pfizer has
started and should do more to increase their market share and revenues. By
acquiring good strategies to achieve potential opportunities to reduce the effects
of the threats Pfizer should adopt good strategies.

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4 MICRO-ENVIRONMENTAL ANALYSIS
4.1 INDUSTRY ANALYSIS
From the internal analysis, we get the strengths and weaknesses of the company.
Which are derived from the following four components:

Value chain
Core Competencies
Strategic Costs
Financial Trends

4.1.2 VALUE CHAIN ANALYSIS

Raw material
from China,
India &
Germany

Operations

Distributors

Sales &
Marketing

Retail
pharmacists

Final
Consumer

Product Research& Development

Human Resource Management
General Administration

SUPPLIERS OF RAW MATERIALS

SUPPLIERS FOR CHEMICALS: PFIZER purchases its raw materials from
regional supplier that is selected by the head office after inspection and testing
their chemicals according to their quality standards and also approved by the
FDA. Presently for Asia china is the major supplier.

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SUPPLIERS FOR PACKAGING: PFIZER purchases its packaging material from

the local manufacturers of the company in which its operating.

OPERATIONS
Operational activities are done at the plant located at 12 Dockyard Road, West
Wharf, Karachi in Pakistan.

DISTRIBUTORS
PFIZER uses four major channels for the distribution of their products: drug
wholesalers, retail pharmacists, hospitals, and doctors.
The distributors are hired by PFIZER. PFIZER distributors have structured route plans
for distributing all its products. No expenses are shared by the company.
Trade Margin: The trade margin is set for this industry, 10% for distributors and 15% of
retailers. However there are trade promotions deals to keep them happy and also
incentives provided by PFIZER to retailers on good performance.

SALES AND MARKETING

PFIZER has a well trained sales and marketing staff who personally visit the
doctors and tell them about the effectiveness of their medicines they also go to
the chemists for the same purpose.

RETAIL PHARMACISTS
Drugs can only be sold through authorized chemists. Retailers have to get
registration approved by the government to sell drugs. The main focus of
companies like PFIZER is to convince doctors through their sales team to
prescribe their drugs. This sales team is on the companys payroll and especially
trained. The distributors sales force is responsible for distributing medicines to
chemists, retailer-cum-chemists and hospital pharmacies.

4.1.2 CORE COMPETENCY

A core competency is a well-performed internal activity that is central (not
peripheral or incidental) to a companys competitiveness and profitability. Often,

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a core competency results from collaboration among different parts of an

organization.
The core competency of PFIZER is their research and development department.
Research & Development
With a 2006 estimated Pfizer budget of $7.8 billion in research & development
(R&D), Pfizer boasts the industry's largest pharmaceutical R & D organization:
Pfizer Global Research and Development.
Pfizer's search for new treatments spans hundreds of research projects across 18
therapeutic areas - more than any other company. Pfizers scientists, clinicians,
technicians, and other professionals employ state-of-the-art tools ranging from
robotic high-throughput screening (a method pioneered by Pfizer) to
sophisticated genomic studies, to deliver a steady stream of innovative new
products that enhance human and animal health.

Painkiller medicine, antibiotics and cardiovascular. Pfizer has largest share

in antibiotics
Animal Health product
Skilled, Technical, Innovative and diversified staff because Pfizer has 4
companies under one name Pfizer, Pharmacia, Upjohn and Parke Davis.

Links with more than 250 partners in academia and industry strengthen its
position on the cutting edge of science and biotechnology by providing access to
novel R&D tools and to key data on emerging trends. A half century ago, despite
daunting odds and great risk, Pfizer pioneered the mass production of penicillin,
ushering in the modern pharmaceutical era. Now, more than 12,500 Pfizer
scientists at our research facilities around the world continue the quest for new
medicines with the same pioneering spirit.

4.1.3 STRATEGIC COST MANAGEMENT

PROCESSES
Strategic costs are found through Activity based Costing, which entails
defining expense categories based on the specific activities being performed
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and then assigning costs to the appropriate activity responsible for creating
the cost. The Strategic costs of Pfizer include the following costs:
Operational Cost (packaging and warehousing)
Raw Material Cost

4.1.4 FINANCIAL TRENDS

The trends of the financial ratios tell about the strength or weakness of the
company in the particular area which the ratio is reflecting.

4.2 STRENGTHS AND WEAKNESSES

STRENGTHS
1. A strong product portfolio
Pfizer has established itself as a global provider of innovative healthcare
solutions, and rather than focusing on a small number of specialist
therapeutic areas, Pfizer has, instead, concentrated on product innovation in
any attractive therapy area, and its current portfolio and R&D pipeline reflect
this. It has strengths in a number of therapeutic areas, and its size and strong
market presence is sufficient to support this diversity.
Pfizer has seven blockbuster drugs, each with revenues exceeding $1B each
year. Topping the list is Lipitor, a cholesterol reduction drug (Sales of $6.3B
per year). The list continues: Norvasc, a calcium channel blocker for treatment
of hypertension and angina ($3.7B); Zoloft for treating depression and panic
attacks ($2.4B); Neurontin for epilepsy and neuropathic pain ($1.7B); Viagra
($1.6B); Zithromax, an oral and injectable liquid azalide antibiotic ($1.5B); and
Diflucan, also an injectable and oral broad-spectrum antifungal medication
($1.1B).
2. Research & Development
With a 2006 estimated Pfizer budget of $7.8 billion in research & development
(R&D), Pfizer boasts the industry's largest pharmaceutical R & D
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organization: Pfizer Global Research and Development. Pfizer's search for

new treatments spans hundreds of research projects across 11 therapeutic
areas - more than any other company. Medicines library includes
approximately 2 million compounds, and our pipeline holds more than 160
projects in development and over 300 projects in discovery research in 11
therapeutic areas.
3.
Strong Marketing
Pfizer has a global marketing strength, which has made it a very attractive
marketing partner for, smaller or less experienced companies. The company's
recognized marketing strength will mean that opportunities for promising
products are likely to be discussed with Pfizer, giving it access to an array of
promising compounds for sale on the international market.
Pfizers strong marketing and sales operations have enabled the company to
become the partner of choice for the marketing innovative products
developed by others. Pfizer has been extremely skilled in creating alliances
with other pharmaceutical companies via co-promotion agreements. Through
co-promotion and licensing agreements, Pfizer promotes and markets such
highly promising products as Celebrex, Bextra, Aricept, and so on with
alliance partners
4. Mergers , Acquisitions and Collaborations
One of the strengths of Pfizer is its ability and strategy of mergers,
collaborations and acquisitions. The recent and most important such act was
acquisition of Pharmacia On July 15, 2002. Pfizer with Pharmacia moved from
fourth to first in Europe; from third to first in Japan; and from fifth to first in
Latin America in pharmaceutical sales. Before the acquisition by Pfizer,
Pharmacia merged with Upjohn. Pfizer had also acquired Parke Davis,
making Pfizer the biggest Pharmaceutical Company in world.
Other alliances include a partnership with IBM and Microsoft to create
Amicore, an independent company that is developing practice management
systems; and a chronic disease management program developed with the
State of Floridas Agency for Health Care Administration.
5. Worlds largest Animal Health company

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Pfizers animal health units market is one of the largest selling and broadest
product lines in its field.
6.

Social Responsive
Pfizers tradition of Philanthropic activities in making every community a
better place to work and live like wise Helping the tsunami orphans, Teaching
about vaccine preventable diseases and Women and children in health
education program etc.

7.

Worlds largest selling medicine, Lipitor

Lipitor totaled Full-year sales of $12.2 billion reflected 12-percent growth over
2004. Lipitor totaled $3.4 billion in the fourth quarter, reflecting growth of 3
percent over the previous year's quarter, a difficult comparison in light of
Lipitor's 23-percent revenue growth in the fourth quarter of 2004, exacerbated
by four fewer business days in the 2005 quarter. Full-year sales of $12.2 billion
reflected 12-percent growth over 2004.

8. Competent sales force

Pfizer has a competent and strong workforce reaching the customers needs.
Majority of the sales revenue is generated by the efforts of the sales force.

WEAKNESSES
1. Decreasing market share
After 2003, Pfizer is facing a decline in the market share of pharmaceutical
industry.

2. No internal supplier network

Pfizer rely on the imports from limited suppliers, which are China, India, and
Germany. This increases the import duties and thus the cost of the output.

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4.3 Internal Factor Evaluation Matrix (IFE)

Internal Analysis evaluates Strengths and Weaknesses in the functional area of
Pfizers business and it also provide the basis for identifying and evaluating
relationships among those functional areas. The strategy formulation tool used
for Internal Analysis is called Internal Factor Evaluation (IFE).
Internal Factor Evaluation Matrix (IFE)
Weight

Rating

Weighted
Score

0.12

.36

2. Strong Research and development

0.20
Network

0.80

3. Strong Marketing

0.07

0.21

0.17

0.51

Health 0.12

0.48

0.09

0.27

Worlds largest selling medicine,

0.09
Lipitor

0.36

Key Internal Factors

Internal Strengths
1. A strong product portfolio

4. Mergers,
Acquisitions
Collaborations
5. Worlds
company

largest

Animal

and

6. Socially responsive
7.

Internal Weaknesses
1. Decreasing market share

0.08

0.08

3. No internal supplier network

0.06

0.12

TOTAL

1.00

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35

Interpretation of IFE Matrix

The Total Weighted Score of 3.19 in Internal Factor Evaluation (IFE) Matrix
indicates that Pfizer is above average in its overall internal strength. The major
strengths are strong Research and Development Network, largest animal health
company and mergers and acquisitions whereas the major weakness is
decreasing market share.
The strategic signals from the IFE indicates as follows:
Strong Research and development Network
Mergers, Acquisitions and Collaborations
Worlds largest Animal Health Company
Decreasing market share
These indicators could be utilized for improvement of there strategic
implementation as, by strong RD Global using as a cousion in Pakistan, Pfizer
can develop a strong RD division to have more research base medicines to be
produced according to the current needs and emerging dieses of Pakistan.
Pfizer can also utilize their skills of mergers and acquisitions (as previously
done with Pak Davis, which made them very strong globally) in order to retain
its market share and have strong grip in Pakistan by acquiring those local
companies that have a powerful supplier and distributions which will help it in
integration.
As Pfizer is worlds largest animal health care research base institute, they can
utilize there this strength over their weaknesses of decreasing market share, by
catering more products in animal sectors, which will also help them, as Pakistan
is already an agricultural state requiring more animal health care products.

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5 COMPANY AND COMPETITOR ANALYSIS

5.1 KEY SUCCESS FACTORS
After analyzing the Pharmaceutical industry (issues) and the comparative
analysis we believe that the main factors which contribute to the success are:
Marketing
Product Quality
Research and Development skills
New geographical regions
Financial Position
Distribution network
Market Share
Mergers and acquisitions
Price competitiveness

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5.2 COMPETITIVE PROFILE MATRIX

CPM
GSK

PFIZER

ABBOTT

CRITICAL
SUCCESS
FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

Marketing

0.05

0.15

0.20

0.20

Product
Quality

0.15

0.6

0.6

0.6

0.1

0.60

0.60

0.45

New
Geographical
Regions

0.05

0.15

0.10

0.10

Financial
Position

0.10

0.4

0.3

0.4

Distribution
Network

0.10

0.4

0.3

0.3

Market Share

0.1

0.52

0.39

0.26

Mergers &
Acquisitions

0.075

0.15

0.225

0.225

Price
0.075
Competitiveness

0.225

0.225

0.225

R&D Skills

TOTAL

1.0

2.89

3.25

2.95

Note: The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 = major
strength.

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Interpretation of CPM
According to the competitive profile matrix as per pharmaceutical industry in
Pakistan, the evaluation of key success factors led the MNCs in order that GSK
as being the leader in Pakistan lies with 3.25 and Abbott with 2.95, while Pfizer is
lagging behind with a 2.89.
According to the market share GSK has the 7% and Abbott ahs 3.4% , while Pfizer
has only the 3.09 v% from a 15% population of Pakistan using pharmaceuticals.
Working with the above-mentioned success factors, as the competitors are
working, Pfizer should also consider doing some good practices.
Such as GSK and Abbot recently installed a MIS system in order to cover their
suppliers, byres, distributors, and retailers more in a systematic way. Therefore
they should also work hard to achieve strength in the industry success factors.

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5.3 TOWS MATRIX

Strengths-S

Weaknesses-W

S1. A strong product portfolio

S2. Strong Research and
development Network
S3.
S4.Marketing and Promotional
skills/ activities.
S5. Strong management team
S6. Largest Market Share
globally
S7. Mergers, Acquisitions and
Collaborations

W1.
No clear
Statement
W2. Discontinuation
products

Opportunities-O

SO- Strategies

WO- Strategies

O1. Customers interest and

preference for buying foreign
medicines rather than local
medicines
O2. Increased awareness about
allopathic mode of medicine
O3. Pakistan has a population
growth rate of 2.6% per annum.
Higher
population
growth
means that there would be a
larger market available for the
pharmaceutical industry.
O4. Emerging diseases
O5. Acquisition of local
companies
O6. Governments interest in
having trade with India in
medicines
O7. Allowing of TRIPS to have
parallel trade on some generic
medicines.

1. Strengthen the product

portfolio by catering the needs
of HIV and Cancer patients (S1,
O5)
2. Increase the market share by
acquiring local companies (S7,
S9, O4)
3. Availability of technical
know how and trained man
power for growth (S5, O1, O3)

1. Focus the untapped markets

of HIV and Cancer to gain the
first Mover Advantage (W4,
O5)
2. Decrease the development
time to enter into new
geographic markets. (W4, O2,
O3)
3.Can reduce overall unit cost
through zero rated tariff regime
of WTO (W6, O1)

Threats-T

ST- Strategies

WT- Strategies

T1. Continued weakening of the

PKR & fluid GOP policies will
put pressure on profit margins
& can impede sales
T2. Patent protection
T3. Threat from substitutes
T4. Increased competition for
Viagra and Celebrex
T5. Growing Bargaining power
of Suppliers and Buyers.

1. Backward Integration (S3,

S7, S9, T5)
2. Gain market advantage by
introducing
Celebrex
and
Viagra in Pakistan. (S1, S4, S5,
S6, T4)
3. Create brand loyalty (S4, S8,
S10, T3).

1. Reduce dependence on
Lipitor by launching Viagra and
Celebrex (W5, T4)
2. Decrease over all unit cost by
Backward/ Forward Integration
system. (W6, T5)
3.
Decrease
overall
development and launching
time to gain the First Mover
Advantage (W4, W7, T3).

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of

40

5.4 SPACE MATRIX

FINANCIAL STRENGTH

Ratings

leverage
liquidity
Net income

4.0
4.0
3.0
11.0

INDUSTRY STRENGTH

Growth Potential (increasing demand).

Capital Intensity (Requirement high)
Ease of entry into the market
Capacity utilization

4.0
4.0
1.0
6.0
15.0

ENVIRONMENTAL STABILITY

Competitive Pressure is High

Less-developed countries are experiencing high inflation
-1.0
and political instability.
-2.0
Government regulation has created price stability
-2.0
throughout the industry.
-2.0
-7.0
Demand is variable because of existence of different
diseases

COMPETITIVE ADVANTAGE

Market share
Research and Development

Control over suppliers and buyers

-3.0
-2.0
-5.0
-10.0

INTERPRETATION

ES Average is -7.0 4 = -1.75

IS Average is + 15.0 4 = 3.75
CA Average is -10.0 4 = -2.5
FS Average is +12.0 4 = 3.0
Directional
Vector
x-axis:
-2.5
+
(3.75)
y-axis: -1.75 + (3.0)= +1.25

Coordinates:
=
+1.25

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Pfizer should pursue Aggressive Strategies. That is Pfizer is in good position to

use its internal strengths to take advantage of external opportunities, over come
internal weaknesses and avoid external threats. Therefore, Market Penetration,
Market Development, Product Development, Backward/ Forward Integration,
horizontal integration can be feasible strategies, depending upon the specific
circumstances that face the firm.

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5.5 GRAND STRATEGY MATRIX

As per our analysis, we are well aware of that Pharmaceutical industry as a whole is a
rapidly growing market as the demand for medicines are increasing worldwide and also
due to this factor there is intense competition in the industry globally so in order to grow
and obtain additional market share, Pfizer stands in the 1st quadrant of the grand strategy
Matrix and hence can pursue following strategies depending upon the market
circumstances.

Rapid Market Growth

PFIZER

1.
2.
3.
4.
5.
6.

Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration

Weak Competitive
Position

Strong Competitive
Position

Slow Market Growth

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6 STRATEGIC ANALYSIS
6.1 CURRENT GENERIC POSITIONS AND
STRATEGY

Broad Range of
Buyers
Of

Differentiation

Differentiation
Strategy

Overall Low-cost
Provider Strategy
Best-cost
provider
strategy

Focused
Differentiation
Strategy

Focused Lowcost Strategy

Narrow Buyer
Segment

Market Target

Low Cost

all

the

generic

strategies,

PFIZER

is

currently

using

BROAD

DIFFERENTIATION STRATEGY. Pfizer is practicing Broad differentiation

strategy because:
1. With differentiation in the various divisions, Pfizer caters its customers
by providing products for animal health, consumer health care, and
personal care.

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2. Medicines which Pfizer manufactures serve larger segments of the

society. For example Pfizer is conducting a research in 11 therapeutic
segments, making medicines for cholesterol patients like Lipitor and
concentrating to maintain the worlds largest animal health segment.
3. Pfizer remains dedicated to serve people by making heavy investments
in Research & Development and producing and innovating new
products for various diseases better than rivals.

TYPES OF FEATURE
Strategic target

Basis of competitive
advantage

Product line

BROAD
DIFFERENTIATION
PFIZERS POLICIES
STRATEGY
A broad cross section of PFIZER international is
market
physically present in 180
countries
An ability to offer buyers PFIZER only
something different from pharmaceutical company
competitor
which deals in animal
health care and keeps on
innovating and
producing new
medicines, as a researchbased pharmaceutical
company
Many product variations, With a 2006 estimated
wide selection, emphasis Pfizer budget of $7.8
on differentiating
billion in research &
features
development
(R&D),
Pfizer
boasts
the
industry's
largest
pharmaceutical R & D
organization:
Pfizer
Global Research and
Development.
Pfizer's
search for new treatments
spans
hundreds
of
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research projects across

11 therapeutic areas more than any other
company.
Medicines
library
includes
approximately 2 million
compounds, and our
pipeline holds more than
160
projects
in
development and over
300 projects in discovery
research in 11 therapeutic
areas.
Marketing emphasis

Build in whatever
features buyers are
wiling to pay for.

BUSINESS POLICY

One of the main Pfizers

corporate philosophies is
the role of diversity
which in company means
that to be aware of the
contribution that can be
made by everyone with
whom they make
business including
customers and
stakeholders.

46

6.2 PORTFOLIO ANALYSIS

6.2.1 The BCG Matrix
Relative market
share in %

SBUs

Total market
size '000

Consumer Health care 0.67%

2881

Animal health

0.54%

332

Pharma products

0.59%

154

For constructing the BCG matrix, five Strategic Business Units of PFIZER have
been considered as follows:

Market Growth
Industry Sales
(In %s)

Star

Question Mark

Cash Cow
HIGH
1.0

Dog
MEDIUM
0.5

LOW
0.0

Relative Market Share

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Interpretation of BCG Matrix

According to the results of Boston Consulting Group (BCG) Matrix,
Pharmaceutical Segment, the Star of Pfizer businesses lies in the 2nd quadrant of
the matrix that represents organization best long-run opportunities for growth
and profitability. And because it is the segment with high relative market share
and a high industry growth rate it should receive substantial investment to
maintain and strengthen the dominant position. Appropriate Strategies include:
Forward, Backward, and Horizontal Integration; Market Penetration; Market
Development; Product Development; and Joint Ventures.
Consumer Health Care Segment is in the 1st quadrant of Pfizers BCG Matrix i.e.
it has a relatively low market share but yet compete in a high growth industry.
Therefore the cash
Needs of this segment are high while cash generation is low. This business is
called Question Mark because Pfizer must decide whether to strengthen it by
pursuing an intensive strategy (Market Penetration, Market Development, or
Product Development) or to sell it.

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6.2.1 Internal External (IE) Matrix

The IFE Total Weighted Scores
Strong
3.0 to 4.0
4.0

The EFE
Total
Weighte
d Scores

Average
2.0 to 2.99
3.0

Weak
1.0 to 1.99
2.0

1.0

High
3.0 to 4.0
3.0
Medium
2.0 to 2.99
2.0
Low
1.0 to 1.99
1.0

Interpretation of IE Matrix
According to the analysis of IE, PFIZER falls in the first division, which covers
the GROW AND BUILD strategies. Which includes Market
Penetration, Market Development, and horizontal integration.
Therefore they can go for the Pharmaceutical Business Segment and
should grow in its Consumer Health Care Business Segment plus
they can also go for the hair and skin care products as Pfizer are
already in ophthalmology.

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6.2.4 Summary Matrix

ALTERNATIVE
STRATEGIES
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Concentric diversities
Conglomerate diversities
Horizontal diversification
Joint venture
Retrenchment
Liquidation

IE

X
X
X
X

SPACE

X
X
X
X
X
X
X

TOTAL

GRAND

COUNT

X
X
X
X
X
X
X

2
2
3
3
3
3
2

18

Interpretation
As per the summary matrix, based on the whole process they major strategies,
which are consistently, coming from the matrices are:
Product Development, Forward Integration, Backward Integration, Horizontal
Integration. These strategies can very well go with PFIZER for more better
results and improvement.
Therefore its suggested that they can go for any of these or either having a
combination of these strategies. Product Development: They can go for the new
varieties in the skin care products as per the growing industry in cosmetics etc. For
Forward Integration, they can go for forward integration through a good handshake
(merger and alliances) with any local company (e.g.: Bosch, Rosh, Hilton) to improve
their distribution and market share in the local industry. Backward Integration &
Horizontal Integration, like wise these two strategies Pfizer can have alliances with
other domestic pharmaceuticals of Pakistan in order to build a strong position and to
retain its market share, they can also for the companies which are having strong financial
positions, internal suppliers plus technology factor so that they can cover their weakness
as done with the PAK DAVIZ in 2004.
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6.3THE QSPM MATRIX

STRATEGY 1. Mergers And Acquisitions: Pfizer Can goes into alliances with
local companies to enhance trade within regional markets.
STRATEGY 2. Product Development: Pfizer should pursue Product
Development into more innovated and differentiated products.
A QSPM for Pfizer
Strategic Alternatives
Should go
into HIV/
AIDS/
Cancer
market
Key Factors

Should pursue
Forward
Integration

Weight

AS

TAS

AS

TAS

.10

.40

.40

.05

.05

.05

.10

.40

.40

.10

.20

.30

.12

.48

.36

.05

.10

Opportunities
8. Customers interest and preference
for buying foreign medicines rather
than local medicines
9. Increased awareness about
allopathic mode of medicine
10. Pakistan has a population growth
rate of 2.6% per annum. Higher
population growth means that there
would be a larger market available
for the pharmaceutical industry.
11. Emerging diseases
12. Acquisition of local companies
13. Governments interest in having
trade with India in medicines
14. Allowing of TRIPS to have parallel
trade on some generic medicines.

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51

Threats
8. Continued weakening of the PKR &
fluid GOP policies will put pressure
on profit margins & can impede
sales
9. The
sale
of
FAKE
AND
SMUGGLED MEDICINES at low
prices
10. Economic and political fluctuations
11. Use of herbal and homeopathic
medicines
12. Government inclination of
encouraging more national
pharmaceutical companies
13. Self medication
Strong brand name of major
competitors such as GSK, ABBOTT.

.07

.28

.28

.05

.20

.15

.45

.45

.10

.40

.30

.11

.22

.44

.10

.40

.40

.10

.40

.30

.07

.28

.28

.05

.20

.15

.05

.20

.15

.07

.21

.21

.07

.28

1.0

Internal Strengths
1. A strong product portfolio
2. Strong Research and development
Network
3. Strong Marketing
4. Mergers, Acquisitions, and
Collaborations
5. Worlds largest Animal Health
Company
6. Socially responsive
Worlds largest selling medicine,
Lipitor

Internal Weaknesses
1. Decreasing market share
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2. No internal supplier network

Sum Total Attractiveness Score

1.0

5.94

6.21

AS = Attractiveness Score; TAS = Total Attractiveness Score

Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably
acceptable; 4 = most acceptable.

Interpretation
Pfizer recently launched its new Strategic Imperatives, the overall theme being
"WORKING FOR A HEALTHIER WORLD. The imperatives that were
launched with fanfare all over the world & Pakistan are:

Deliver more new medicines more quickly to patients

Drive our advantages in size, reach, and productivity
Build the performance potential of each colleague
Shape a positive environment for better healthcare
Create new directions in health and wellness.

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7 STRATEGY IMPLEMENTATION
Implementing and executing strategy entails converting the organizations
strategic plans into action and then into results. The managements task is to
convert the strategic plan into action and get on with what needs to be done to
achieve the vision and targeted objectives and all the employees are participants.
Implementing strategy is far more difficult then formulating it.

Build a capable
organization

Exert strategic
leadership

Link budgets to
strategy
The strategy implementers action
Build a strategysupportive
corporate culture

agenda
What to do now vs. later
What requires much time and

Create strategysupport policies

personal attention?
Design strategysupportive
reward systems

What can be delegated to others?

Install support
systems

BUSINESS POLICY

Institute best practices

and commitment to
continuous
improvements

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7.1 Components of Implementing and Executing

Strategy
The principal strategy-implementing tasks for the Pfizer Inc are listed below:
1. Building a Capable Organization
A capable organization efficiently manages its human resources, build core
competencies, and create competitive advantages that are hard for the
competitors to imitate. After the merger of four pharmaceutical companies
Pfizers human resource base became much more complex which created a sense
of uncertainty resulting in a large number of retrenchments.
The aim of HR department is to promote a work force and environment that is
diverse in culture, beliefs, and background and academic qualifications. One of
the major issues, which HR is facing, is to create a harmonized culture to ease the
effects of the massive merger. In order to provide the employees with a secure
and comfortable environment the company started PFIZER which includes
workshops, training of employees, seminars, and teaching a synchronized new
values system.
PFIZER believes in continuous training of their employees, and its training
program consists following activities:
i.
On Job Training.
ii. Overseas Training.
iii. External Workshop and Seminars.
iv. In-house training Center (for following departments)
The HR also runs organization developmental programs, which cover
organization restructuring, reorganizing career management and talent tribute
programs.
Building core competencies, resource strengths and organizational capabilities
that rivals cant match is a sound foundation for sustaining competitive
advantage. Over the years PFIZER has proved itself in developing core
competencies in the areas of R&D, state-of-the-art plants and equipments and

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ownership of valuable patents, which places it at an extremely advantageous

position.

2. Linking Budgets to Strategy

Pfizers strategy entails consolidating and expanding the market share. It
achieves these objectives through efficient management of its value chain
activities by setting aside appropriate budget. The method for setting the
promotional budget is a mix of percentage of sales method and management
judgment.
One of the core areas of value chain activity of any pharmaceutical company is
R&D which delivers new ways of managing old problems and anticipates future
issues. . Pfizers R&D is mainly performed in its headquarters at UK where the
requirements for each of its offices across the world are considered. It is
recommended that the company may establish its R&D department in each of its
overseas offices or at least in different regions like Asia-Pacific to better
understand the local medical developments and then come out with effective
remedial medicines.
3. Establishing Strategy Supportive Policies
PFIZER has instituted policy guidelines/Standard Operating Procedures (SOPs)
for every department and there is an audit team which check its working. The
audit team is both local as well as from its headquarters. The local management
guides its employees in every value chain activity.
4. Instituting Best Practices and Continuous Improvement
Although PFIZER has an excellent R&D network which continuously works to
bring the innovative products, the company has yet to discover more and more
innovative products as the threats of new diseases emerge such as we mentioned
earlier bird flu and anthrax .
The company believes in innovation and total quality management (TQM). The
concept of TQM is extended to all activities of value chain. The companys
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operational excellence focuses on value creation. These initiatives are based on

five components:
Common Processes
Performance of management and benchmarking
Knowledge Management
Education
Lean Sigma
5. Installing Support Systems
PFIZER possesses excellent integrated support system, which has become a basis
for its competitive advantage. All the departments including production, R&D,
finance, HR, customer service truly integrate to add value in the company
service. For he company like PFIZER it should have regional headquarters which
have a control over all the regional operating activities then they should also have
links with each other and then ultimately to its headquarters.
6. Designing Strategy-Supportive Reward Systems
PFIZER provides competitive compensation packages based on qualification and
experience and market related forces. PFIZER also known as the leading salary
payer in the pharmaceutical sector. They also provide stock options to their
senior management along with providing them with the following rewards and
benefits.Thus monetary as well as no monetary incentives give a boost to
employees morale resulting in enhanced efficiency PFIZER should continue with
its policy.
7. Building a Strategy-Supportive Corporate Culture
It is already incorporated in PFIZER culture in form of commitment to diversity
in which company takes care of all the stakeholders who are part of the business.
8. Exerting Strategic Leadership
PFIZER is led by a team of highly professionals capable of bringing about
strategic direction to the company. During the last three years PFIZER has
recorded impressive financial growth and its market share has also increased
tremendously. The management believes in the technique of managing by
walking around (MBWA) by making frequent visits to company offices across the
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country and production sites. Now PFIZER should also give autonomy to its
regional operating units to freely experiment on the regional diseases by
establishing an R&D department locally. Because the inhabitants of the regions
will be more concerned about the health of there people and they will be more
aware of the problems faced in their society.

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7.2 Pitfalls of strategy implementation

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7.3 Balanced Business Scorecard

The balance scorecard is a management system that helps organizations to clarify
their vision and strategy and put them into action. It provides feedback around
both the internal business processes and external outcomes in order to
continuously improve strategic performance and results.
The balanced scorecard retains traditional financial
measures. But financial measures tell the story of past events, an
adequate story for industrial age companies for which investments
in long-term capabilities and customer relationships were not
critical for success. These financial measures are inadequate,
however, for guiding and evaluating the journey that information
age companies must make to create future value through
investment in customers, suppliers, employees, processes,
technology, and innovation.
The balanced scorecard suggests that we view the organization from four
perspectives, and to develop metrics, collect data and analyze it relative to each
of these perspectives:

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Measurers of Balanced Business Scorecard applied at Pfizer Inc:

Financial Measures
Financial: How do we look to shareholders?
The inventors do not disregard the traditional need for financial data. Timely and
accurate funding data will always be a priority and managers will do whatever
necessary to provide it. Will achieve Profitable growth within the targets of Growth in
net margin annually, i.e. Yr 1: 50 % and Yr 2: 70% and will also achieve a target of
Return on investment for shareholders.

Operational Measures
Customers: How do customers see us?
Recent management philosophy has shown an increasing realization of the
importance of customer focus and customer satisfaction in any business.
These are leading indicators: if customers are not satisfied, they will
eventually find other suppliers that will meet their needs. Poor performance
from this perspective is thus a leading indicator of future decline, even
though the current financial picture may look good.
Internal process: What must we excel at?
This perspective refers to internal business processes. Metrics based on this
perspective allow the managers to know how well their business are running,
and whether its products conform to customer requirements.
Innovation and Learning: Can we continue to improve and create value?
This perspective includes employee training and corporate cultural attitudes
related to both individual and corporate self-improvement. In the current
climate of rapid technological change, it is becoming necessary for knowledge
workers to be in a continuous learning mode.

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Four dimensions of a learning organization

Organizational Design
Learning organizations are boundary less. People work in teams. Employees are
sufficiently empowered to take their decisions (MBO).
Organizational Culture
The culture of a learning organization is based on strong mutual relationship.
People feel like one community working for common objective. Every one cares
for others. There is environment of mutual trust and respect.
Information Sharing
In learning organization, the flow of information is open, timely, and accurate.
Leadership
The leadership of learning organization has vision, where he wants to steer the
organization. To achieve this objective he believes in collaboration with others.

Organizational Design
Boundary less
Teams

Organizational Culture
Strong Mutual Relationship
Sense of Community
Caring
Trust

Empowerment

THE LEARNING
ORGANIZATION

Information Sharing
Open
Timely
Accurate

Leadership
Shared Vision
Collaboration

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BALANCED BUSINESS SCORECARD (PFIZER)

OBJECTIVES
FINANCIAL

TARGETS

INITIATIVES

Growth in
net Margin
ROI Ratio

Growth in net
margin annually
Yr 1 50 %
Yr 2 70%

Through
questionnaire
s
Percent of
Service Level
Agreements

Present
Global
Health
Fellows
model (GHF)
Develop
Corporate
performance
measurement
s
Percent of
development
project
within effort
estimates

MEASURES

Profitable growth
Return on
investment for
shareholders.

Create value for

customers to
make
differentiation
from our
competitors.
Create/ retain
loyalty customer
loyalty
Improving access
to medicines

Discovering and
Developing New
Medicines
Apply advanced
science and
technology in the
manufacture of
medicines to
produce costeffective, highquality products

Improving local
market Pakistan
Improving
profitability

CUSTOMER

INTERNAL
BUSINESS
PROCESS

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International
recognition by
Global
Reporting
Initiative (GRI)
50 % increase
in
Doctors
loyalty till
2007.

20 new
medicines for
FDA approval
till end of 2007.

Communicating
access for doctors
through regional
forums, meetings,
and seminars
Perform Activities
focused on
education, public
health, safety and
improvement of the
environment

Ensure that
contract
manufacturers and
key suppliers have
responsible
environment,
health and safety
management
related to
production of
materials for Pfizer

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INNOVATION,
LEARNING &
GROWTH

Educate
physicians new
prescription
medicine prior to
beginning TV
and print
advertising.
Employee
efficiency for
increase in
productivity.
Skills,
technologies, and
corporate culture
needed to
support your
strategy

To create local
R&D department
under the
supervision of
regional and then
main
headquarters

Expanding the
focus of the to
sustainable
health
solutions.

To create
awareness
about the
effectiveness of
allopathic
medicines and
overcome the
threat of fake
and smuggled
medicines.

Provide training for

employees to most
effectively work with
NGOs in developing
countries

Interpretation
The name Balanced Scorecard of Pfizer reflects the Balance between shortterm and long-term objectives, financial and non-financial measures, lagging and
leading indicators, external and internal performance perspectives. It proves a
complete Balance revenue growth and production improvement, Differentiate
your organization from competitors, Identify operational, customer-relationship,
and innovation processes to support your customer and financial goals and they
had, Define the skills, technologies, and corporate culture needed to support
your strategy.

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8. STRATEGY EVALUATION
The most important element of Pfizers management control process is evaluation.
Evaluation of the sales force is an action undertaken to verify the success of selling
program that is comparing planned and actual results, identifying reasons for variations
and making appropriate changes in the sales goals and strategies. After the execution of
any program by the company, it demands immediate feedback.
This feedback assists the managers to evaluate the performance of the employees.
Through evaluation the managers are assured whether the program is designed and
implemented properly or not.
A successful management control program promises the company a competent and able
workforce. It spots individuals who are ready for promotion, salary increases or
assignment to new territories and responsibilities, keeps sales job descriptions current and
on target, provides evidence about salespersons, which should be eliminated.
Top sales executives design the evaluation plan at PFIZER because they have the most
sales experience; they know the company, its products, and markets in the greatest detail.
PFIZER believes that the program is only effective if the knowledge and the
improvements meet the criterion. The evaluation process at PFIZER also includes a
follow-up and as soon as the program shows positive results it indicates that the
evaluation was done in an adequate manner.

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9. RECOMMENDATONS
The best strategies will be Mergers And Acquisitions with the local
companies to strengthen the regional trade and product development by
producing more innovative and differentiated products.
PFIZER should not change its strategy and should stick to the broader
differentiation but at the same time it should work to maintain its position.
It should grab the opportunity of the regional trade this will help it to be
present physically in the regions and it will also minimize the threat of the
economic instability of the countries because then it will work more under the
umbrella of international trade system like WTO and TRIPS.
It should also avail the opportunity of increasing customer needs by
product development by Creating new directions in health and wellness such
as skin care products, it should communicate doctors about its differentiated
products. This will increase its sales and create its brand recognition.
Deliver more new medicines more quickly to patients, Drive our
advantages in size, reach, and productivity, Build the performance potential
of each colleague and Shape a positive environment for better healthcare.

10.

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10. Bibliography
http://www.pfizer.com.pk/Default.aspx?tabid=44
http://www.dcomoh.gov.pk/pharma/layoutplans.php
www.dailytimes.com.pk/default.
www.patent.gov.pk/notification

http://www.pfizer.com/pfizer/main.jsp
Corporate citizenship report Pfizer 2005-2006
Main campus Pfizer Inc at Doc Yard

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