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Case

Analysis

CEO:

Fast Facts

Jeffrey B. Kindler (2006 -2010)

Location:
New York, USA (Corporate Headquarters)

Web Site Address:


http://www.pfizer.com

Stock Exchange Listings:

New York Stock Exchange (PFE)


London (PFZ)
Euronext
Swiss

The History of
Pfizer

The History of Pfizer

1849

1862

1880

1891

Founded
Charles
Pfizer &
Company

First
domestic
production of
tartaric acid
& cream of
tartar

Begun
production
of citric
acid

Death of
Charles
Erhart

The History of Pfizer

1900

1919

1928

1936

Offered
shares
of
commo
n stock
to the
public

Successfully
pioneered
mass
production of
citric acid
from sugar

Alexander
Fleming
discovered
the
antibiotic
properties
of
penicillin
mold

Developed
a
fermentatio
n free
method for
producing
ascorbic
acid

The History of Pfizer

The History of Pfizer

The History of Pfizer

Key Products

Pharmaceuticals

Cardiovascular and
Metabolic Diseases

Central Nervous System


Disorders

Arthritis and
Pain

Ophthalmology

Urology

Endocrine Disorders

Infectious and
Respiratory Diseases

Oncology

Animal Health

Animal Health

Mission and Vision


Statements

Vision

We dedicate ourselves to
humanitys quest for longer,
healthier, happier lives through
innovation in pharmaceutical,
consumer, and animal health
products.

Mission

We will become the worlds most


valued company to patients,
customers, colleagues, investors,
business partners, and the
communities where we work and
live.

Internal
Assessment

Financial Analysis

Financial Charts

Assets (in millions)

$116,000

$115,268
$115,000

$114,837

$114,000
$113,000
$112,000
$111,148
$111,000
$110,000
$109,000

2006

2007

2008

Financial Charts

Liabilities (in millions)


$60,000
$50,258

$50,000

$53,592

$43,479
$40,000
$30,000
$20,000
$10,000
$0

2006

2007

2008

Financial Charts

$48,000
$47,000

Current Assets (in millions)


$46,949

$46,849

$46,000
$45,000
$44,000
$43,076

$43,000
$42,000
$41,000

2006

2007

2008

Financial Charts

Current Liabilities (in millions)


$30,000

$27,009

$25,000
$21,389

$21,835

2006

2007

$20,000
$15,000
$10,000
$5,000
$0

2008

Financial Ratios

Current Ratio
2.5
2.2
2.0

2.1

1.6

1.5

1.0

0.5

0.0
1

Financial Charts

Long Term Debt (in millions)


$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0

2006

2007

2008

Financial Charts

Stockholders' equity (in millions)


$80,000
$70,000

$71,358
$65,010
$57,556

$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0

2006

2007

2008

Financial Ratios

Long Term Debt to Equity Ratio


0.3
0.3

0.3
0.2
0.2
0.1
0.1
0.1
0.1
0.0
2006

2007

2008

2006

Financial Charts

Assets (in millions)


$116,000
$115,268
$115,000

$114,837

$114,000
$113,000
$112,000
$111,148
$111,000
$110,000
$109,000

2006

2007

2008

Financial Charts

Net Income (in millions)


$25,000

$20,000

$19,337

$15,000

$10,000

$8,144

$8,104

2007

2008

$5,000

$0

2006

Financial Ratios

ROI
0.2
0.2
0.2
0.1
0.1
0.1
0.1

0.1

0.1

2007

2008

0.1
0.0
0.0
0.0
2006

2006

Financial Charts

Stockholders' equity (in millions)


$80,000
$70,000

$71,358
$65,010
$57,556

$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0

2006

2007

2008

Financial Charts

Net Income (in millions)


$25,000

$20,000

$19,337

$15,000

$10,000

$8,144

$8,104

2007

2008

$5,000

$0

2006

Financial Ratios

ROE
0.3
0.3
0.3
0.2
0.2

0.1

0.1

0.1
0.1
0.0
2006

2007

2008

2006

Management Analysis

Marketing Analysis

Current Markets

Marketing Strategies

Market Development

Lower Class People and Emerging Markets

Market Penetration
Penetration of the current market in the US
during the recession

Vision
(Emerging
Markets)

We will be recognized for meeting the


diverse medical needs of patients in
Emerging Markets around the world in
an innovative, socially responsible, and
commercially viable manner.

Mission
(Emerging
Markets)

We will
Develop bold and innovative partnerships
Reach patients we have never reached before
Provide medicines and services in an
affordable manner
Be recognized in having the best talent in
healthcare
Become a leading biopharmaceutical
company in Emerging Markets

Research and
Development

R&D Facilities
Location

E-commerce

Pfizer.com

Strengths and
Weaknesses

Strengths

One of the largest pharmaceutical company in the


world and spread over more than 50 countries
Excellent research and development (R&D)
creating innovative and breakthrough products
Mergers and acquisitions with big pharmaceutical
companies increasing brand reputation
Has over 100,000 employees as a part of the
organization
Strong brand name and recall globally

Strengths

Number one pharmaceutical from sales point of view


and its marketing infrastructure is well established
throughout the world
Therapeutic coverage is very large and the
innovative researchers are broadening it further
Well established reputation for years on number of
products
Wide range of area being worked, that includes
human health, animal health, customer health, and
corporate groups
Involved in licensing agreements with different
companies for collaborative research work

Weaknesses

Tough competition from other major pharmaceutical


brands means limited scope for market share growth
Negative brand image due to involvement in largest
healthcare fraud of marketing its drug illegally
Very limited penetration of biologics market
Marketing with other companies and merging with
other pharmaceuticals can halter its global
popularity
Overreliance on the mature market (U.S.) and a small
number of distributors

Weaknesses

Irrational drug policies such as bringing over 70


percent of the drugs under price control
Inadequate infrastructure for fermentation-based
drug remedies and effluent treatment plants
Lack of or inadequate subsidies and fiscal incentives
for the industry
Inadequate quality testing facilities for the regulatory
authorities, which have more administrative and less
technical capabilities as a result
Limited emission rights

Internal Factor
Evaluation (IFE)
Matrix

Internal Factor Evaluation Matrix (IFE)

1.

Strengths

One of the largest pharmaceutical company in the world and spread over more
than 50 countries
2. Excellent research and development (R&D) creating innovative and
breakthrough products
3. Mergers and acquisitions with big pharmaceutical companies increasing brand
reputation
4. Has over 100,000 employees as a part of the organization
5. Strong brand name and recall globally
6. Number one pharmaceutical from sales point of view and its marketing
infrastructure is well established throughout the world
7. Therapeutic coverage is very large and the innovative researchers are
broadening it further
8. Well established reputation for years on number of products
9. Wide range of area being worked, that includes human health, animal health,
customer health, and corporate groups
10. Involved in licensing agreements with different companies for collaborative
research work

1.
2.
3.
4.
5.
6.
7.

Weight

Rating

Weighted
Score

0.03

0.12

0.05

0.15

0.07

0.28

0.04
0.07

3
3

0.12
0.21

0.05

0.20

0.03

0.09

0.05

0.15

0.04

0.16

0.07

0.21

Weighte
Weaknesses
Weight Rating d Score
Tough competition from other major pharmaceutical brands means limited scope
0.08
2
0.16
for market share growth
Negative brand image due to involvement in largest healthcare fraud of
0.05
2
0.10
marketing its drug illegally
Very limited penetration of biologics market
0.09
2
0.18
Marketing with other companies and merging with other pharmaceuticals can
0.05
3
0.15
halter its global popularity
Overreliance on the mature market (U.S.) and a small number of distributors
0.02
2
0.04
Irrational drug policies such as bringing over 70 percent of the drugs under price
0.03
4
0.12
control
Inadequate infrastructure for fermentation-based drug remedies and effluent
0.04
3
0.12

External
Assessment

Competitive Forces

Competitors

Merck & Co.


-

Vaccines
Prescription Drugs
Consumer Products
Animal Health

Strategies:

Mergers and Acquisitions


Product Development
Market Development
Partnerships

Competitors

Bayer AG
- Bayer HealthCare
- Bayer CropScience
- Bayer MaterialScience

Strategies:

Corporate Social Responsibility


Unrelated Diversification
Mergers and Acquisitions
Product Development

Competitors

Novartis AG
-

Pharmaceutical
Alcon Eye care
Sandoz Generics
Over-the-counter

Strategies:
Product Development
Related Diversification
Mergers and Acquisitions

Competitive Profile
Matrix (CPM)

CPM
CompetitiveProfileMatrix(CPM)
PFIZER

CriticalSuccessFactors
Advertising

NOVARTIS

MERCKCo.

Weigh
Rating Score Rating Score Rating Score
t
0.05
4
0.20
3
0.15
3
0.15

BAYER
Rating

Score

0.15

MarketPenetration

0.10

0.30

0.30

0.40

0.30

CustomerService

0.09

0.36

0.18

0.36

0.27

StoreLocations

0.04

0.16

0.08

0.12

0.08

R&D

0.14

0.42

0.56

0.56

0.42

EmployeeDedication

0.09

0.27

0.18

0.36

0.27

FinancialProfit

0.10

0.40

0.40

0.20

0.40

CustomerLoyalty

0.06

0.18

0.12

0.18

0.18

MarketShare

0.10

0.40

0.30

0.20

0.20

ProductQuality

0.09

0.27

0.27

0.27

0.27

TopManagement

0.05

0.15

0.15

0.10

0.10

PriceCompetitiveness

0.09

0.27

0.36

0.27

0.27

Totals

1.00

3.38

3.05

3.17

2.91

Economic Issues

U.S. Economy
Recession

Pfizer suffered from a slowdown in sales after


many of its drugs went off patent and genericdrug companies poached sales. The drug
maker was forced to cut R&D spending and
pare the size of its sales force in 2008.

Proposed Acquisition
of Wyeth

Potential Benefits

Opportunities and
Threats

Opportunities

Strategic agreements with other


pharmaceutical companies and
organizations to boost its research.
Increasing awareness of people about their
healthcare needs
Global penetration through mergers and
acquisitions
Increasing demand for quality healthcare
solutions
Restructuring strategy designed to cut
costs and leaner company

Opportunities

Funding available to facilitate


product/company
Acquisitions (Wyeth) and in-licensing/codevelopment opportunities
Expansion into biologics market
E-Commerce
High profits, revenues and funds are
available to uplift the company's progress

Threats

Risk of unsuccessful new products


Regulatory environment is becoming
more & more stringent
Economic slowdown in European
markets
Increased market competitions
Losing of patent individuality by
focusing on one product

Threats

Loss of patent protection of major products


Risk of Eisai terminating long-standing
partnership
Outstanding competition of regional markets
along with emerging markets of India and
China
Negatively publicized by being sued by their
customers
Healthcare reform in the US affects revenue
growth

External Factor
Evaluation (EFE)
Matrix

External Factor Evaluation Matrix (EFE)

2.
3.
4.
5.

Weighte
Opportunities
Weight Rating d Score
Strategic agreements with other pharmaceutical companies and organizations to
0.09
3
0.27
boost its research.
Increasing awareness about healthcare needs
0.06
3
0.18
Global penetration through mergers and acquisitions
0.07
4
0.28
Increasing demand for quality healthcare solutions
0.07
3
0.21
Restructuring strategy designed to cut costs and leaner company
0.03
3
0.09

6.
7.

Funding available to facilitate product/company


Acquisitions (Wyeth) and in-licensing/co-development opportunities

1.

8. Expansion into biologics market


9. E-Commerce
10. High profits, revenues and funds are available to uplift the company's progress

0.02
0.07

3
4

0.06
0.28

0.05
0.03
0.04

3
2
4

0.15
0.06
0.16

Weighte
Weight Rating d Score
0.04
2
0.08

Threats

1.

Risk of unsuccessful new products

2.

Regulatory environment is becoming more & more stringent

0.05

0.15

3.

Economic slowdown in European markets

0.03

0.06

4.

Increased market competitions

0.06

0.18

5.

Losing of patent individuality by focusing on one product

0.08

0.24

6.

Loss of patent protection of major products

0.07

0.27

7.

Risk of Eisai terminating long-standing partnership


Outstanding competition of regional markets along with emerging markets of
India and China
Negatively publicized by being sued by their customers

0.04

0.12

0.03

0.06

0.04

0.16

10. Healthcare reform in the US affects revenue growth

0.03

0.09

1.00

8.
9.

TOTALS

2.88

Strategy
Formulation

SWOT Matrix

Strengths

1. One of the largest pharmaceutical company in the world and spread


over more than 50 countries
2. Excellent research and development (R&D) creating innovative and
breakthrough products
3. Mergers and acquisitions with big pharmaceutical companies
increasing brand reputation
4. Has over 100,000 employees as a part of the organization
5. Strong brand name and recall globally
6. Number one pharmaceutical from sales point of view and its
marketing infrastructure is well established throughout the world
7. Therapeutic coverage is very large and the innovative researchers are
broadening it further
8. Well established reputation for years on number of products
9. Wide range of area being worked, that includes human health, animal
health, customer health, and corporate groups
10. Involved in licensing agreements with different companies for
collaborative research work

1.
2.
3.
4.
5.
6.
7.
8.
9.

Weaknesses

Tough competition from other major pharmaceutical brands means


limited scope for market share growth
Negative brand image due to involvement in largest healthcare fraud
of marketing its drug illegally
Very limited penetration of biologics market
Marketing with other companies and merging with other
pharmaceuticals can halter its global popularity
Overreliance on the mature market (U.S.) and a small number of
distributors
Irrational drug policies such as bringing over 70 percent of the drugs
under price control
Inadequate infrastructure for fermentation-based drug remedies and
effluent treatment plants
Lack of or inadequate subsidies and fiscal incentives for the industry
Inadequate quality testing facilities for the regulatory authorities,
which have more administrative and less technical capabilities as a
result

Opportunities

1. Strategic agreements with other pharmaceutical companies and


organizations to boost its research.
2. Increasing awareness about healthcare needs
3. Global penetration through mergers and acquisitions
4. Increasing demand for quality healthcare solutions
5. Restructuring strategy designed to cut costs and leaner company
6. Funding available to facilitate product/company
7. Acquisitions and in-licensing/co-development opportunities
8. Expansion into biologics market
9. E-Commerce
10.High profits, revenues and funds are available to uplift the
company's progress

Threats

1.
2.
3.
4.
5.
6.
7.
8.

Risk of unsuccessful new products


Regulatory environment is becoming more & more stringent
Economic slowdown in European markets
Increased market competitions
Losing of patent individuality by focusing on one product
Loss of patent protection of major products
Risk of Eisai terminating long-standing partnership
Outstanding competition of regional markets along with
emerging markets of India and China
9. Negatively publicized by being sued by their customers
10.Healthcare reform in the US affects revenue growth

SO Strategies

It can use its reputation as one of the largest


pharmaceutical company in the world to gain
strategic agreements with other companies
and organizations to boost its research (S1,
O1)
It can use its fully integrated manufacturing
facilities to expand into the biologics market
(S10, O8)
It can use its marketing infrastructure to have
a marketing agreements with leading
companies (S6 O10)

ST Strategies

It can use its excellent research and


development (R&D) program to reduce the
threats or unsuccessful new products (S2 T1)
It can use its mergers and acquisitions
strategies to reduce the increasing market
competition (S3 T4)
Its strong brand name and recall globally can
reduce the threats given by increasing entries
of private individuals (S5 T9)

WO Strategies

Use E-commerce to reduce reliance to US


markets and small number of distributors (W6
O8)
Marketing agreements with other
pharmaceutical companies to broaden the
scope of market share growth (W1 O10)
Use excess funds to penetrate into the
biologics market (W3 O6)

WT Strategies

Allocate further research efforts before new


inductions in the market (W6 T1)
Fund capital expenditures on infrastructures
for fermentation-based drug remedies and
effluent treatment plants (W7 T1)
Provide added marketing efforts to regain an
acceptable public image for previously sued
products (W1 T7)

SPACE Matrix

SPACE Matrix
FINANCIAL POSITION

STABILITY POSITION

Return on Investment (ROI)

Rate of Inflation

-4

Leverage

Technological Changes

-3

Liquidity

Price Elasticity of Demand

-4

Working Capital

Competitive Pressure

-4

Cash Flow

Barriers to Entry into Market

-3

4.6

Stability Position (SP) Average

-3.6

Financial Position (FP) Average

COMPETITIVE POSITION

INDUSTRY POSITION

Market Share

-2

Growth Potential

Product Quality

-3

Financial Stability

Customer Loyalty

-2

Ease of Entry into Market

Technological know-how

-4

Resource Utilization

-2

Profit Potential

Control over Suppliers and

Conservative

-6

-5
-4
-3

Defensive

-2

CP -7

FP
7

-1

-1

-2

-3

-4

-5

-6

-7
SP


Aggressive

Xaxis
Yaxis

1.4

1.0

Integration

Strategies

Market

Penetration

Market
Development

Diversification

Strategies

3
4
5
6
7 IP

Competitive

BCG Matrix

BCG MATRIX

Division by Geographic Area


US

International

Profits

15,326,250,000

20,059,000,000

Revenues

20,435,000,000

27,861,000,000

RelativeMarketSharePosition
HighMedium
Low
1.0.50
High+20 0.0
Star

Question Mark

US

Internationa
l

Medium

Cash Cow

Dog

BCG MATRIX

Division by Business Segment


Pharmaceuticals

Animal health

Corporate/Other

Profits

35,339,200,000

2,118,750,000

778,200,000

Revenues

44,174,000,000

2,825,000,000

1,297,000,000

RelativeMarketSharePosition
HighMediumLow
High+20 1.0.500.0
Star

Question Mark

Pharmaceutica
ls

Animal Health

Corporate

Medium 0

Cash Cow

Dog

Internal-External
Matrix

The Total IFE Weighted Scores


Strong

Average

Weak

4.0 to 3.0
IFE
3.06 I
EFE 3.08

2.99 to 2.0
II

1.99 to 1.0
III

4.0

High

Pfizer

Grow and Build

Integration Strategies

Intensive Strategies

3.0

IV

VI

Grand Strategy
Matrix

Weak

Competitive
Position

Quadrant II

Quadrant III

Rapid Market Growth

Quadrant I

Integration

Strategies

Pfizer

Intensive
Strategies

Related

Diversification

Strong

Competitive

Position

Quadrant IV

Slow Market Growth

Quantitative
Strategic Planning
Matrix

Recommendations

Recommendation

Therefore we recommend the company to continue


in acquiring Wyeth for it has the highest sum of total
Alternative score of 6.41.
Since the patent of Eisais Aricept will expire on 2010
the company need to increase its funds in research
and development so that it can develop new
products to cure diseases.
But since Pfizer fund for research and development is
not that high, it is better to acquire small company
first to increase more sales before the company can
increase its research and development funds.

Strategy
Implementation

Potential Risks

Regulatory Hurdles
Increases Pfizers debts
Assumption of Litigations of Wyeth
Cost cutting and Lay-offs

End