The pharmaceutical industry is characterized by intense competition. However, Pfizer has managed attain an optimal market position as a result of its effectiveness in formulating and implementing operational strategies. Pfizer has adopted a comprehensive diversification strategy that has enabled it develop an extensive product portfolio.
The effectiveness of the firms diversification strategy has been enhanced by the commitment of the firms management team in investing in a lean research and development program. Additionally, the firms management team is focused at ensuring that effective marketing of the firms products is undertaken (Bronson, Bhenderu, Gatti& Srivastava, 2011).
According to Kozami (2005), diversification entails increasing the scope of a firms operation. One of the ways through which diversification can be implemented is by focusing at different customer groups. Additionally, the firm may also undertake diversification by expanding into divergent business lines (Kozami, 2005).Through diversification strategy, Pfizer has been able to establish a number of business units some of which include animal health, nutrition, capsugel and consumer healthcare.
Considering the fact that firms are affected by changes in the macroeconomic environment, the firms diversification strategy is faced by a number of opportunities and problems. Hence, it is essential for the firms management team to focus on improving the diversification strategy.
This will culminate in the firm developing a high level of competitiveness. In line with aforementioned issues, this paper seeks to identify the problems and opportunities that the firm faces, their solutions, resource needs or constraints and the metrics to assess the success of the solutions suggested.
Problem/opportunity
Solution identified
Resource needs or constraints
Metrics of success
Expiry of the firms product portfolio patent protection (Bronson, Bhenderu, Gatti& Srivastava, 2011).
Pfizers management team should consider refocusing and optimizing its product patent protection.
Pfizer should ensure that its meets the statutory requirements with regard to patenting. The firms products should be characterized by novelty and non-obviousness.
Assessing the degree of market exclusivity attained (Crosse, 2007).
Expansion of operations into the emerging markets
Establishment of franchises in the identified emerging markets such as China.
A strong marketing team to ensure that the products are effectively introduced in the emerging markets.
Continuous assessment of the percentage contribution of the marketing program instituted in the emerging markets to the firms profitability.
Developing culture of continuous product improvement and innovation.
Instituting a comprehensive research and development program. The program should be continuously updated in order to take into account the market changes hence minimizing product failure.
Develop a strong research and development team in order to improve the effectiveness and efficiency with which market research will be conducted.
Evaluating the number of products added in the respective business units.
Currently, Pfizer focuses its operations on nine main areas of competition in its healthcare businesses which include primary care, oncology, specialty care, animal health, consumer healthcare, capsugel and established products. Considering the fact that consumers are faced by a variety of healthcare products to select from, diversifying its product portfolio will result to the firm increasing its revenue generation for example by establishing multiple businesses.
Additionally, diversifying the firms product portfolio will enable Pfizer to gain a higher leverage against its suppliers. As a result, Pfizer will not be required to rely on one supplier. Upon expiry of patent protection in the domestic market, the firm should consider marketing such products in the emerging markets.
Reference List
Bronson, R., Bhenderu, L., Gatti, B. & Srivastava, J. (2011). Pfizer: up to the challenge? Web.
Crosse, M. (2007). Pediatric drug research: studies conducted under best pharmaceuticals for children act. New York: Diane Publishing.
Kozami, A. (2005). Business policy and strategic management. New Delhi: McGraw-Hill Publishers.
Pfizer organization has a high level of liquid assets. With its diverse healthcare services such as primary healthcare, special oncology and care, animal healthcare, and nutrition products among others, it is clear that the companys amount of health services is likely to continue increasing.
The increasing demand of animal medical products and many unexploited business products are major business opportunities for the company. However, the evident problem is that the company has very little fixed assets. This is reflected by the fact that Alcon comprises 24.5% of the companys liquid assets.
Amount of debts
At the amount of both long-term and short-term debts, Pfizers debt level leads in its risk factors. Its major expansion strategies are based on long-term debts. The company uses both debt instruments and equity debts to address its financial needs and enhance the efficiency of its operations.
The existence of many financial instruments presents a major opportunity for the companys quick expansion. However, it is a challenge to some of the shareholders since some of them prefer to have quick returns on their investments. Pfizer has got an unfavorable credit rating.
Product-lines bringing in cash
The sale of its products is a good way of generating cash revenues. As an opportunity for improvement, the company should pursue markets in underdeveloped states across the Globe. Unfortunately, repatriating revenue from its foreign investments has increasingly become a major problem to the top level managers.
The company can still get more income avenues by innovating new medical and health products. The acquisition of King presents a new revenue generating opportunity (Mennen, 2010).
Extent and specifics of borrowings
As the worlds leading research institution, the company borrowing ability is focused on generating revenue for its research operations (Ferell & Hartline, 2010). This approach presents a lot of financial constraints to the companys demand for finances to address its financial demands that relate to expansion of its operations and infrastructure development.
The company does not have a huge borrowing capacity as it would otherwise be assumed. Pricing of products or services Fund transfer is a pricing mechanism employed by the Pfizer organization. The point that the company often increases prices of old drugs due to the fact that the patent protection for such drugs is lost over time could make some clients shy away.
Although aimed at compelling customers to switch to new and better products and services developed by Pfizer, there is a risk for pricing mechanisms to portray the company products and services as very costly in the healthcare market.
Identified Solutions
Pfizer has got a high level of liquid assets that presents a major challenge to the future strategic investment mechanisms for the company. To address this problem, the company should endeavor to have many fixed assets that would help generate income and thus encourage sustainable growth due to state income.
While debts could be unavoidable in business, Pfizer organization should focus on minimizing its short-term debts and instead utilize long-term debts such as government and corporate bonds that have a long maturity period with fairly low interest rates.
Bowing should be restricted to acquiring finances aimed at expanding company operations, improving the state of infrastructure and enhancing the level of manufacturing and cost effectiveness in Pfizers business operations (Ahati, 2008).
On challenges facing its products that bring some cash in, the company should streamline its operations and ensure that matters related to foreign operations and Global Health strategies stocking of large multinational health corporations are focused on maximizing its revenue streams.
The solution to the possible challenges facing its pricing strategy is to focus on enhancing the level of efficiency and cost effectiveness. The company could also opt to sell its products to managed-care organizations at a lower or affordable cost thus minimizing its market prices hence enhancing its competitiveness.
Organizational structure can be described as the hierarchical arrangement of people and departments that determine how authority, communication, rights and duties are performed in the organization. A well organized structure is instrumental to the success and performance improvement of any organization. This paper discusses how Pfizer Inc., the worlds largest pharmaceutical company has organized its structure (Pfizer Inc., 2007). The focus is also on the necessary adjustments needed to make the organization effective in effecting its operational planning.
Is there a relationship between an aspect of the structure and a problem in the business?
There is a problem between the aspect of the structure and a problem in the Pfizer organization because the shareholders are not fully engaged in the decisions of the company (Pfizer Inc., 2007). There is a gap between the top management team and shareholders. In this case, the engagement process is not clear. This creates conflicts in the organization because the shareholders feel that their decisions are not valued (Kondalkar, 2009).
Breakdown in the component of the structure
There is a breakdown in the component of the structure. Thus, the Board of Directors (BoD) is separated from the shareholders. In normal circumstances, the BoD should work hand-in-hand with the shareholders in developing the policies of the company (Druckman, Singer, Van, & National Research Council (U.S.), 1997).
Is the structure a framework or a product of the way the organization does business?
The structure of the company is a framework because the company manufactures several products. Being the worlds largest pharmaceutical company, Pfizer Inc. deals with different pharmaceutical products.
Pfizer organizations challenges, solutions, resource needs and their success metrics
From the organizational structure of Pfizer organization, we learn that the company is facing several challenges which include; lack of engagement of shareholders in the process of making decisions. The board of directors should include the shareholders while making decisions for the company. Involving the shareholders is vital because they get to understand the organizations activities. The success metric will be getting feedback from the shareholders about the decisions made. Secondly, the companies policies and documents are not consolidated. The board of directors together with the shareholders should consolidate the documents and policies because the company may be required to have an effective system of documentation with the aspects of the shareholders policy documents, processes and implementations. The metric of success in this case is the consolidation of documents and policies.
The third challenge is that the shareholders only meet once a year. They should meet regularly as this will enhance operational planning. Since operational planning is done regularly, the shareholders will improve the engagement of top management hence the success of the company. The metric of success will be the effect of operational planning and the improved performance of the organization. The fourth challenge is that the company allows the outside directors to hold meetings in the absence of the management. The directors should engage management in their meetings to enhance the performance of the operational managers and make them feel like a family and appreciated. The increased idea generation and performance improvement will be used as a metric for success. The company also lacks transparency. Pfizer should develop transparency by disclosing information for good practice. There is a need for being transparent as this will help the management, communities, and the wider public to access information for good practice. The extent at which the communities and the wider public will access information about Pfizer will help to measure the transparency of the organization.
Conclusion
Organizational structure determines the improvement and success of any organization. To perfect the structure of the organizations, enhancing or several adjustments are necessary to effect operational activities for the better. Pfizer, the worlds largest pharmaceutical company is still required to make adjustments to its organizational structure to gain competitive advantage. Technology changes and advances every single day and so should organizations, at all costs. A Pfizer company needs to find solutions or need to make adjustments to make sure that; the shareholders engage in decision making, the companys documents and policies are consolidated, shareholders meet regularly, the directors involve the management in their meetings and that the company develops transparency.
References
Druckman, D., Singer, J. E., Van, C. H. P., & National Research Council (U.S.). (1997). Enhancing organizational performance. Washington, D.C: National Academy Press.
Kondalkar, V.G. (2009). Organization development. [S.l.]: New Age International Pvt.
Pfizer Inc. (2007). Organisational Information. Web.
Nowadays, the pharmaceutical industry is one of the fastest-growing industries. Drug sales in 2018 reached $900.7 billion, an increase of 3% compared to 2017 (Lakdawalla, 2018). This industry remains one of the most profitable, with a return on sales of 17%. The pharmaceutical market is oligopolistic, the main share of which is concentrated in the hands of about the 20 largest manufacturers from the USA, Switzerland, Germany, France, and Japan. The largest pharmaceutical company in terms of global drug sales is Pfizer, with $45 billion in annual sales (Lakdawalla, 2018). Therefore, it seems worthwhile to understand the difference between Pfizer’s strategy and its competitors to understand what allows this company to outperform them.
Differences between the Strategies of Pfizer and its Competitors
Unlike many competitors, Pfizer has a broad differentiation business-level strategy. It produces high-quality, innovative drugs that require extensive research and development and patent protection. Kinch and Weiman (2021) note that although differentiation forces Pfizer to increase costs, which drives up the value of the product, it increases the customer’s perceived value. Thus, Pfizer’s differentiation strategy allows the company to serve a large market and, at the same time, create value for its product.
Moreover, Pfizer actively participates in integration processes. According to Hoffman and Bowditch (2020), in 2014, Pfizer acquired the pharmaceutical company Innopharma Inc as well as the Baxter product portfolio. Two years later, in 2016, Pfizer also acquired Anacor for $49 billion (Hoffman & Bowditch, 2020). Thus, absorbing its industry competitors, the company reaches a new level of development. Moreover, since 2018, Pfizer has actively collaborated with BioNTech on vaccine development. The companies received the world’s first regulatory approval for a COVID-19 vaccine through this collaboration. Therefore, integration with competitors is also a hallmark of Pfizer’s strategy.
Another key feature of Pfizer’s strategy that sets it apart from its competitors is its commitment to innovation. Pfizer continually improves R&D productivity by identifying the compounds most likely to succeed and focusing its resources on areas of high value. Kinch and Weiman (2021) assert that such areas include oncology, diabetes, obesity, schizophrenia, and Alzheimer’s disease. These areas are characterized by significant unmet medical needs as well as a high potential for market growth. Pfizer continues to complement its internal R&D with the best external scientific data to help create a series of valuable new drugs. Thus, the desire for innovation distinguishes Pfizer from its competitors.
Recommendations for Deterring Competitors
The company’s success over the years shows that its strategy is the right one. Thus, based on the identified features of Pfizer’s strategy, some recommendations can be made that will help deter the company’s competitors. It is important to note that Pfizer Inc. pursued an aggressive approach to research and development. R&D capabilities are an important competency that a company can leverage to support business growth. Aggressive research and development is a necessary approach to mitigate the effects of competitive forces in an industry. Another recommendation is to expand strategic alliances that complement Pfizer’s current business. For example, a company may enter into agreements with many large distributors and sellers in emerging markets to strengthen its presence around the world. On the other hand, diversification is a recommendation to reduce Pfizer’s exposure to the risks associated with the restrictions resulting from the business’s focus, primarily on the pharmaceutical industry. Thus, while maintaining the current strategy, the company will be able to contain competitors.
References
Hoffman, D., & Bowditch, A. (2020). The global pharmaceutical industry: The demise and the path to recovery. Routledge.
Kinch, M., & Weiman, L. (2021). The price of health: The modern pharmaceutical enterprise and the betrayal of a history of care. Simon and Schuster.
Lakdawalla, D. N. (2018). Economics of the pharmaceutical industry. Journal of Economic Literature, 56(2), 397-449.
Organizations operate in a highly competitive environment. Therefore, it is critical for an organization to produce high quality products that meet customer expectations.
However, production of high quality products is not enough, an organization must engage in extensive product promotion campaigns to increase customer awareness on the products.
An organization should formulate a product promotion campaign in such a manner that it would elicit customer interest and portray the product as superior to other products in the market.
However, in some instances, a company may be tempted to lie to customers in effort to increase its sales.
An organization may engage in puffery or false advertising. Puffery is simply making exaggerated claims about a product. An organization may engage in puffery by using provable superlatives in the advertisements. Such superlatives include ‘new improved, best, and super’ (Salinger 652).
Puffery is common in various advertising campaigns. An organization may also engage in false or deceptive advertising through giving false claims on the product. The US Federal Trade Commission (FTC) considers false advertising as a fraud.
Pfizer is a leading pharmaceutical company that produces the drug Lipitor. Lipitor is one of the best drugs for lowering cholesterol. Cholesterol is the main cause of cardiac diseases. Therefore, it is vital for the company to formulate advertising campaigns that would portray the drug as being beneficial to the heart.
The company sought the help of Dr. Robert Jarvik to in promoting the image of the drug. Association of the drug with Dr. Javik would greatly improve the image of the drug, as Dr. Javik is an inventor of an artificial heart.
However, Dr. Javik is not a practicing physician. Inclusion of Dr. Javik in the advertising would greatly improve the image of the drug regardless of what he says in the advertisements. Consumers would easily trust the claims of an individual who invented an artificial heart.
However, since Dr. Javik is not a practicing physician, he has no right to feature in medical advertisements. Regardless of whether the claims in the advertisement involving Dr. Javik are right or wrong, the company is involved in puffery.
It is a fact that Lipitor is one of the best drugs for reducing cholesterol available in the market. However, being the best drug in reducing cholesterol does not guarantee that the company that customers will embrace the drug.
The company must still engage in extensive marketing campaigns. One of the strategies that the company may use to promote use of the drug is through collaboration with various renowned hospitals that treat heart patients.
Getting the endorsements of the hospitals would greatly improve the image of the drug. The company may also involve patients who have had positive results after using the drug in its future advertising campaigns.
A company should ensure that it does not engage in puffery or deception through its advertising campaigns. Puffery usually involves making exaggerated claims on a product. Deception refers to a situation where a company makes tricks the customer into buying products through making false claims.
The difference between deception and puffery is that whereas puffery is making exaggerated claims, deception is making outright false claims. Therefore, deception is injurious to the consumer.
FTC considers deception illegal (Blocher 13). In future, Pfizer an avoid puffery or deception by avoiding making exaggerated or false claims of its products.
Works Cited
Blocher, Harald. Advertising ethics – an oxymoron? Santa Cruz, CA: Grin Verlag, 2008. Print.
Salinger, Lawrence M. Encyclopedia of white-collar & corporate crime, Volume 1. London: SAGE publications, 2005. Print.
The message of the advertising is that Pfizer is a company that cares for its consumers. It is committed to their overall well being and does not just limit itself to the medication it sells. The company probably offers solid customer care as well other services that show how holistic it is (Pfizer (b) 12).
Different cultures would interpret the message differently. Certain people would object to graffiti painting on public property. Others would not associate creeping around with the beautiful image on the wall if their culture has no spray painters. Some viewers might object to the sentimentality of the piece. They might feel that it is exploiting human feelings.
The most effective SCR for the advertisement is American culture. A person from this community would be familiar with spray painting, caring for the ill and doing something special for them. They would also deduce that Pfizer is compassionate.
Products
The organization sells a range of medicine for HIV, diabetes, erectile dysfunction, arthritis, bipolar disorder and other medical conditions. It is difficult to decode what the company sells from the advertisement because it seems disconnected from the message.
In the advert, the company emphasises that sometimes it takes more than medication to care for someone. One would thus deduce that it sells something in that field. Unless one is already familiar with the brand name, one would presume that Pfizer offers medical services, palliative care or other aspects of medication that have nothing to do with their products (Pfizer (a) 12).
Pfizer sells consumer products that are mostly prescription-based. These medicines are tangible and portable. Some of them are perishable while others are not. They deal with complicated conditions as well as embarrassing ones like erectile problems.
While doctors prescribe those medications, sometimes consumers may request for them. Overall, the company should have placed greater emphasis on their core products rather than patient care, which is an implied service that they might not even offer.
Country markets
The most plausible country markets for these products are western countries like the UK, France and the United States. Western countries have a lot of experience with graffiti painting and some of them would appreciate the spontaneous nature of the art. They are also expressive people who would appreciate the message. Conservative nations like Iraq and Saudi Arabia would not resonate with the message.
These nations have a respect for authority and would shun adverts that endorse countercultures. Furthermore, a poor country like Bangladesh or Mali would not even know what graffiti painting is. Therefore, some would presume that the protagonist is stealing something. Their level of economic development would not allow for such an indirect message (Cateora & Graham 9).
International integrated marketing campaign
If the company wants to relate to all its key markets, it needs to include a series of posters that have a picture of the ailing child in the advertising taking its products. It also needs to work on the advertisement itself by incorporating its key products in the company. Instead of using graffiti painting, it could change the piece to another act of kindness. The firm needs to use internet advertising to make the work relatable.
Additional factors
One should consider the exposure of various target markets to the company name. Mostly American consumers know about Pfizer; therefore, the company needs to make its brand name more implicit. Messages that focus on urgent situations are more effective than sentimental ones for diverse audiences. The campaign should replace internet advertising with radio and television promotions in countries with a low development index.
Works Cited
Cateora, Phillip & John Graham. International marketing. NY: McGraw-Hill, 2004. Print.
The value the company attaches to its customers contributed to its thriving into limelight of drug business in the year 1941. This was due to the mass production of penicillin which saved many lives during the World War II. This was then later followed by the manufacture of Viagra.
Before the firm developed Viagra, it had to create around 1,500 chemicals, tested their effectiveness as compared to previous drugs and finally screened them to come up with the best quality for the consumers (Magretta 3-8). The firm also went as far as researching to find out which of the age groups suffered most from the erectile dysfunction (Hedman).
The Viagra invention had the ability to cause erections only during sexual stimulation. This was contrary to other injection therapies provided by other companies which at times induced the patient to prolonged erections, making the patient uncomfortable. Hence, the invention of Viagra was so much encouraging to the consumers who expressed their willingness to continue with the treatment as it satisfied their expectations.
The firm had a stated maximum prescription for each patient diagnosed with erectile dysfunction, this ensured reimbursement of up to 6 tablets per month for each patient 18 years and above. The plan ensured that consumers were protected from any form of misuse of the drugs and danger (Mahadavan 4).The use of Viagra was dropped from the formularies since it became one of the lifestyle drugs. This helped majority to cut on Medicaid expenses.
The introduction of online sales made it possible for the company to reach so many customers within the shortest time possible. This helped in increasing the revenues of the firm; this included the consultation and the shipping fee offered by the company which was averagely $ 715 for one year supply (Magretta 3-8).
Capabilities
The Pfizer firm recorded the highest earnings growth in the Pharmaceutical industry, which was rated at 25% between 2000 and 2002. This growth rate was attributed to the strong drug pipeline and its stability in blockbuster drugs. The firm also had the lowest risk when it came to the market share loss from the drugs as compared to other pharmaceutical firms.
This was due to the fact that most of its pharmaceutical sales were given to generic cannibalization before 2005. The firm’s capability to increase its research and development expenses saw it venture into new field of medicine. This enabled the firm to invent new pharmaceutical drugs and also open many operational facilities all over the world (Army).
For the Pfizer firm to overcome the competitors they embarked on continuous launching of new products and aggressively acquiring the best possible strategies. They bought drug maker companies and also ventured into the consumer products, bought companies that produced hospital related products.
The company also extended an invitation hand to other related companies which saw it merge with some popular companies like Warner-Lambert. The company ventured in the sale of the brand name from its operating groups to the consumers. The brand name groups included Animal Health Group and Consumer Health care. These brand names made the company to be known as one which improved the health not only of human beings but also of livestock, hence became very popular to the consumers (Porter 62-78).
The introduction of the internet enables the firm to reach so many companies at any given time. It also enhances the devising of the strategies since the progress of other firms can easily be monitored from the internet. It has enabled international expansion of the company (Stabell 413).
Sustainability
For sustenance purposes the firm invested heavily on the research and development, half of the employees of the company taken to the section dealing with research and development. The mixture on the labor force was also a contributing factor, which comprises the British and the Americans (Sandberg 3).
The firm strategizes on conducting more clinical trials on Viagra as compared to its competitors. This made it to enlarge its market base since most of the patients came back with positive results. The firm also deployed a good number of sales representatives to that went direct to the doctors, who eventually prescribed the drug to the patients (Army).
The firm uses the Direct-to-Consumer Advertising which ensures that patients are updated on new medical treatments, right prescriptions and also allows them to discuss their health conditions with their physicians. The company also focused on raising awareness on how important men’s health was to them (Porter 62).
They used the brand name that made so many identify themselves with the brand i.e. so many became brand loyal to the company. The firm spent so much money in advertisement on medical journals, meetings and events that were mostly attended by the physicians. These promotional activities ensured some increase in revenue with the Direct-to-customer contributing around 16% in the year 2000. The use of the internet exposes the firms secrets to the competitors hence considered not safe at all for sustainability purposes (Porter 78).
Conclusion
The business model shows clearly the level of competition of the company, it reveals whether the company is the most cost-efficient company in the industry or not. The business model should be understood because it provides vivid information about the market and can be used by investors and financial analysts.
Works Cited
Army, Barret. “The formula at Pfizer. Don’t run with the crowd”. Business week, 1998.
Hedman, Thomas. “The Business Model: A Means to Understand the Business Context of Information and Communication Technology”. Institute of Economic Research Working Paper Series, School of Economics and Management, Lund University 2001.
Magretta, Joan. “Why Business Models Matter,” Harvard Business Review, 2002: 3-8.
Mahadevan. “Business Models for Internet-Based E-Commerce,” California Management Review, Vol. 42, summer 2000: 4 Porter, Michael. “Strategy and the Internet,” Harvard Business Review, 2001: 62-78.
Sandberg. Is it time to trade in your business model? Harvard Management Update, 2002: 3-5.
Stabell, Fjeldstad. “Configuring value for competitive advantage: On chains, shops and networks”. Strategic Management Journal, Vol. 19, 1998: 413–437.
The pharmaceutical industry is characterized by intense competition. However, Pfizer has managed attain an optimal market position as a result of its effectiveness in formulating and implementing operational strategies. Pfizer has adopted a comprehensive diversification strategy that has enabled it develop an extensive product portfolio.
The effectiveness of the firm’s diversification strategy has been enhanced by the commitment of the firm’s management team in investing in a lean research and development program. Additionally, the firm’s management team is focused at ensuring that effective marketing of the firm’s products is undertaken (Bronson, Bhenderu, Gatti& Srivastava, 2011).
According to Kozami (2005), diversification entails increasing the scope of a firm’s operation. One of the ways through which diversification can be implemented is by focusing at different customer groups. Additionally, the firm may also undertake diversification by expanding into divergent business lines (Kozami, 2005).Through diversification strategy, Pfizer has been able to establish a number of business units some of which include animal health, nutrition, capsugel and consumer healthcare.
Considering the fact that firms are affected by changes in the macroeconomic environment, the firm’s diversification strategy is faced by a number of opportunities and problems. Hence, it is essential for the firm’s management team to focus on improving the diversification strategy.
This will culminate in the firm developing a high level of competitiveness. In line with aforementioned issues, this paper seeks to identify the problems and opportunities that the firm faces, their solutions, resource needs or constraints and the metrics to assess the success of the solutions suggested.
Problem/opportunity
Solution identified
Resource needs or constraints
Metrics of success
Expiry of the firm’s product portfolio patent protection (Bronson, Bhenderu, Gatti& Srivastava, 2011).
Pfizer’s management team should consider refocusing and optimizing its product patent protection.
Pfizer should ensure that its meets the statutory requirements with regard to patenting. The firm’s products should be characterized by novelty and non-obviousness.
Assessing the degree of market exclusivity attained (Crosse, 2007).
Expansion of operations into the emerging markets
Establishment of franchises in the identified emerging markets such as China.
A strong marketing team to ensure that the products are effectively introduced in the emerging markets.
Continuous assessment of the percentage contribution of the marketing program instituted in the emerging markets to the firm’s profitability.
Developing culture of continuous product improvement and innovation.
Instituting a comprehensive research and development program. The program should be continuously updated in order to take into account the market changes hence minimizing product failure.
Develop a strong research and development team in order to improve the effectiveness and efficiency with which market research will be conducted.
Evaluating the number of products added in the respective business units.
Currently, Pfizer focuses its operations on nine main areas of competition in its healthcare businesses which include primary care, oncology, specialty care, animal health, consumer healthcare, capsugel and established products. Considering the fact that consumers are faced by a variety of healthcare products to select from, diversifying its product portfolio will result to the firm increasing its revenue generation for example by establishing multiple businesses.
Additionally, diversifying the firm’s product portfolio will enable Pfizer to gain a higher leverage against its suppliers. As a result, Pfizer will not be required to rely on one supplier. Upon expiry of patent protection in the domestic market, the firm should consider marketing such products in the emerging markets.
Reference List
Bronson, R., Bhenderu, L., Gatti, B. & Srivastava, J. (2011). Pfizer: up to the challenge? Web.
Crosse, M. (2007). Pediatric drug research: studies conducted under best pharmaceuticals for children act. New York: Diane Publishing.
Kozami, A. (2005). Business policy and strategic management. New Delhi: McGraw-Hill Publishers.
Pfizer organization has a high level of liquid assets. With its diverse healthcare services such as primary healthcare, special oncology and care, animal healthcare, and nutrition products among others, it is clear that the company’s amount of health services is likely to continue increasing.
The increasing demand of animal medical products and many unexploited business products are major business opportunities for the company. However, the evident problem is that the company has very little fixed assets. This is reflected by the fact that Alcon comprises 24.5% of the company’s liquid assets.
Amount of debts
At the amount of both long-term and short-term debts, Pfizer’s debt level leads in its risk factors. Its major expansion strategies are based on long-term debts. The company uses both debt instruments and equity debts to address its financial needs and enhance the efficiency of its operations.
The existence of many financial instruments presents a major opportunity for the company’s quick expansion. However, it is a challenge to some of the shareholders since some of them prefer to have quick returns on their investments. Pfizer has got an unfavorable credit rating.
Product-lines bringing in cash
The sale of its products is a good way of generating cash revenues. As an opportunity for improvement, the company should pursue markets in underdeveloped states across the Globe. Unfortunately, repatriating revenue from its foreign investments has increasingly become a major problem to the top level managers.
The company can still get more income avenues by innovating new medical and health products. The acquisition of King presents a new revenue generating opportunity (Mennen, 2010).
Extent and specifics of borrowings
As the world’s leading research institution, the company borrowing ability is focused on generating revenue for its research operations (Ferell & Hartline, 2010). This approach presents a lot of financial constraints to the company’s demand for finances to address its financial demands that relate to expansion of its operations and infrastructure development.
The company does not have a huge borrowing capacity as it would otherwise be assumed. Pricing of products or services Fund transfer is a pricing mechanism employed by the Pfizer organization. The point that the company often increases prices of old drugs due to the fact that the patent protection for such drugs is lost over time could make some clients shy away.
Although aimed at compelling customers to switch to new and better products and services developed by Pfizer, there is a risk for pricing mechanisms to portray the company products and services as very costly in the healthcare market.
Identified Solutions
Pfizer has got a high level of liquid assets that presents a major challenge to the future strategic investment mechanisms for the company. To address this problem, the company should endeavor to have many fixed assets that would help generate income and thus encourage sustainable growth due to state income.
While debts could be unavoidable in business, Pfizer organization should focus on minimizing its short-term debts and instead utilize long-term debts such as government and corporate bonds that have a long maturity period with fairly low interest rates.
Bowing should be restricted to acquiring finances aimed at expanding company operations, improving the state of infrastructure and enhancing the level of manufacturing and cost effectiveness in Pfizer’s business operations (Ahati, 2008).
On challenges facing its products that bring some cash in, the company should streamline its operations and ensure that matters related to foreign operations and Global Health strategies stocking of large multinational health corporations are focused on maximizing its revenue streams.
The solution to the possible challenges facing its pricing strategy is to focus on enhancing the level of efficiency and cost effectiveness. The company could also opt to sell its products to managed-care organizations at a lower or affordable cost thus minimizing its market prices hence enhancing its competitiveness.
Organizational structure can be described as the hierarchical arrangement of people and departments that determine how authority, communication, rights and duties are performed in the organization. A well organized structure is instrumental to the success and performance improvement of any organization. This paper discusses how Pfizer Inc., the world’s largest pharmaceutical company has organized its structure (Pfizer Inc., 2007). The focus is also on the necessary adjustments needed to make the organization effective in effecting its operational planning.
Is there a relationship between an aspect of the structure and a problem in the business?
There is a problem between the aspect of the structure and a problem in the Pfizer organization because the shareholders are not fully engaged in the decisions of the company (Pfizer Inc., 2007). There is a gap between the top management team and shareholders. In this case, the engagement process is not clear. This creates conflicts in the organization because the shareholders feel that their decisions are not valued (Kondalkar, 2009).
Breakdown in the component of the structure
There is a breakdown in the component of the structure. Thus, the Board of Directors (BoD) is separated from the shareholders. In normal circumstances, the BoD should work hand-in-hand with the shareholders in developing the policies of the company (Druckman, Singer, Van, & National Research Council (U.S.), 1997).
Is the structure a framework or a product of the way the organization does business?
The structure of the company is a framework because the company manufactures several products. Being the world’s largest pharmaceutical company, Pfizer Inc. deals with different pharmaceutical products.
Pfizer organization’s challenges, solutions, resource needs and their success metrics
From the organizational structure of Pfizer organization, we learn that the company is facing several challenges which include; lack of engagement of shareholders in the process of making decisions. The board of directors should include the shareholders while making decisions for the company. Involving the shareholders is vital because they get to understand the organization’s activities. The success metric will be getting feedback from the shareholders about the decisions made. Secondly, the companies policies and documents are not consolidated. The board of directors together with the shareholders should consolidate the documents and policies because the company may be required to have an effective system of documentation with the aspects of the shareholders’ policy documents, processes and implementations. The metric of success in this case is the consolidation of documents and policies.
The third challenge is that the shareholders only meet once a year. They should meet regularly as this will enhance operational planning. Since operational planning is done regularly, the shareholders will improve the engagement of top management hence the success of the company. The metric of success will be the effect of operational planning and the improved performance of the organization. The fourth challenge is that the company allows the outside directors to hold meetings in the absence of the management. The directors should engage management in their meetings to enhance the performance of the operational managers and make them feel like a family and appreciated. The increased idea generation and performance improvement will be used as a metric for success. The company also lacks transparency. Pfizer should develop transparency by disclosing information for good practice. There is a need for being transparent as this will help the management, communities, and the wider public to access information for good practice. The extent at which the communities and the wider public will access information about Pfizer will help to measure the transparency of the organization.
Conclusion
Organizational structure determines the improvement and success of any organization. To perfect the structure of the organizations, enhancing or several adjustments are necessary to effect operational activities for the better. Pfizer, the world’s largest pharmaceutical company is still required to make adjustments to its organizational structure to gain competitive advantage. Technology changes and advances every single day and so should organizations, at all costs. A Pfizer company needs to find solutions or need to make adjustments to make sure that; the shareholders engage in decision making, the company’s documents and policies are consolidated, shareholders meet regularly, the directors involve the management in their meetings and that the company develops transparency.
References
Druckman, D., Singer, J. E., Van, C. H. P., & National Research Council (U.S.). (1997). Enhancing organizational performance. Washington, D.C: National Academy Press.
Kondalkar, V.G. (2009). Organization development. [S.l.]: New Age International Pvt.
Pfizer Inc. (2007). Organisational Information. Web.