PFIZER (2009)

CASE ANALYSIS FORMAT FOR STRATEGIC MANAGEMENT

I. CASE BACKGROUND:

Pfizer Inc. is the largest research based pharmaceutical company

founded by Charles Pfizer and Charles Erhart that is recognized for
meeting the diverse medical needs of patients and leading
biopharmaceutical company in an emerging market around the world
that is innovative, socially responsible and is conducted in a
commercially viable manner.

Opportunities are those favorable conditions that could affect the strategic decisions of the company. Threats are those unwanted conditions
that could affect the business environment.
II. ENVIRONMENTAL ANALYSIS:
A. External Environment Analysis
A.1. General Environment

General Environment Opportunities Threats

Political/Legal Proposed Wyeth Acquisition Regulation hurdles in the US and

European Commission

Partnership with Other Countries Lawsuits Abroad

Patent Litigation Settlement

Economic Global Distribution Take on Wyeth’s possible Litigation

Job Opportunities Over the counter drug availability

Supply Chain Distribution

Unpredictable Currency Fluctuation

 General Environment Opportunities Threats

Socio-Cultural Accessibility to quality and Social beliefs against medicine/

effective medicines across vaccine intake
communities

Technological Expansion into Biologics/ Vaccine Bio-hazard Product Development/

Market Disposal

Advance Facility/ Laboratory and Rapid Competitor Product

Highly Skilled Workforce Advancement
A. Industry Environment

Industry Environment Opportunities Threats

Rivalry R & D Collaboration Competitors getting the larger

market share

Competitor is first in technological

breakthrough

Competitor as first to be the

patent medicine distribution

Bargaining Power of Consumer Strengthening brand loyalty Lower revenue

Bargaining Power of Suppliers Exclusive supply of materials Higher cost of production

Impact in the supply chain

Additional: Industry Growth, Shareholder’s Action, Creditor’s Action and Community Perceptions
Identify the opportunities and threats in the industry where the company operates and competes and those affecting the competitive forces.
A. Industry Environment

Industry Environment Opportunities Threats

New Entrants & Entry Barriers Acquisition of services and/ or Consumes a portion in the market
products share

Threats from Product Substitution Innovate/ Improve existing product Less demand in products, less
revenue
B. Internal Environment Analysis
B.1. The Functional Areas

Functional Areas Strengths Weaknesses

Finance Largest Market Capital Amount of Debts

Ensured financial accuracy A lack of visibility in use of funds

Segregation of duties Complex processes cause inefficiency and

cost

Reimbursement from customers

Marketing Leading Pharmaceutical Company Settlement of Marketing Case (Bextra)

Greatest marketing power

Strong brand image
B. Internal Environment Analysis
B.1. The Functional Areas

Functional Areas Strengths Weaknesses

Org & Mgt Strong Sales Force Patent Protection & FDA Issues
Litigation in several courts
around the world

Production In-house production of raw material Too big to grow organically

HR Biggest Number of Employees Internal Politics

Prioritize learning and development Increasingly stricter employment

laws
Effective turnover management

High safety standard

Understand compliance
B. Internal Environment Analysis
B.1. The Functional Areas

Functional Areas Strengths Weaknesses

R&D Product Diversification No potential new blockbuster drugs

Risk mitigation Research cost

Detection of requirements and Time allotment for research

opportunities
Scrapped drugs that are potential
Available workforce successor of Lipitor

Patent expiration of Lipitor

B. Internal Environment Analysis
B.1. The Functional Areas

Functional Areas Strengths Weaknesses

Information Tech Launched of Regenerative Availability of technology advancement

Medecine Unit
Security against data breach
Fewer data errors
High cost of software development and
Secure and shareable data deployment

Efficient patient experience Difficulty in migrating from manual

processes, because both staff and
patients are used to the manual
processes and so are unable to speedily
cope with the new system.
 C. External Factor Evaluation Matrix
Evaluate the general environment and industry environments using the EFE. A Total Weighted Score of 2.5
and
WEIGHT
above means favorable opportunities for the company. RATING
Otherwise, threat WEIGHTED
outweighs opportunities. Rating Values
SCORE
OPPORTUNITIES:
1 - Poor response
2 - Average response
3 - Above average
4 - Superior response

THREATS:

4 - Highest score
3 – Above Average
2 - Average score
1 - Lowest score

TOTAL WEIGHTED SCORE: 1.0 OVERALL RATING:

CONCLUSION:
D. Internal Factor Evaluation Matrix
(IFE)
Evaluate the Internal Environment using the IFE. A Total Weighted Score of 2.5 and above means
favorable strength for the company. Otherwise, weakness outweighs strength.
WEIGHT RATING WEIGHTED Rating Values
SCORE
STRENGTH:
1 - Major weakness
2 - Minor weakness
3 - Minor strength
4 - Major strength

WEAKNESS:

>2.5 - Strong
2.5 - Average
<1.0 - Weak

TOTAL WEIGHTED SCORE: 1.0 OVERALL RATING:

CONCLUSION:
E. Competitive Profile Matrix (CPM)
Provide table comparison and scores among major competitors.
C O M PA N Y
Critical Success Company A Company B Company C Company D
Weight
Factors
Rating Score Rating Score Rating Score Rating Score

Capitalization
Brand reputation
Market Share
Advertising
Employees
Profitability
Financial position
Total 1.0
Conclusion:
F. Assumptions On The Analysis
F.1 General Environment Stability

Political/Legal - Pfizer operates in many countries and it may encounter

different political systems and governments. Countries
lacking political stability can negatively impact Pfizers
operations in that country
Economic - Economic factors such as exchange rate, recession
and labor costs will affect Pfizers investment plans
Socio-Cultural
Technological
F.2 Industry Growth Prospects
F.3 Financial Strength and competitive position

F.4 Relevant ratios

III. PROBLEM STATEMENT:
A. General Statement of the Problem:
A.1Support evidence of the problem
A.2Time Context
A.3View Point
IV. ALTERNATIVE COURSES OF ACTIONS
A. TOWS / SWOT Matrix
STRENGTHS WEAKNESSES
1. Strong brand image 1. Patent expiration
2. Top pharma company 2. Too big to grow organically
3. Readily available cash 3. No potential new blockbuster drugs
4. Strong sales force 4. Lawsuits
5. Blockbuster drugs 5. Internal politics

OPPORTUNITIES SO STRATEGIES WO STRATEGIES

1. Technology advancement ● Focus on vitamins & supplements
2. New emerging markets (S1,O3)
3. Longer life expectancy ● Finance all R&D proposal (S3,O1)
4. High entry barriers
5. Increase of chronic disease
6. Emerging new diseases

THREATS ST STRATEGIES WT STRATEGIES

1. Increase strength of US Dollar
2. Higher tax rate
3. Patent Litigation settlement
4. Medicaid or other similar govt
programs
5. Devt of blockbuster drugs by
competitors
B. IFE/EFE MATRIX (IEM)

IFE TOTAL WEIGHTED SCORE =

Strong Average Weak

(3.0 – 4.0) (2.0 – 2.9) (1.0 – 1.99)

II
High I III
(grow &
(3.0 -4.0) (grow & build) build) (hold & maintain)
EFE TOTAL
WEIGHTED Medium IV V VI
SCORE = (2.0 – 2.9) (grow & build) (hold & maintain) (harvest or divest)

Low VII VIII IX

(1.0 – 1.99) (hold & maintain) (harvest or divest) (harvest or divest)
C. SPACE MATRIX (SM)

Indicates whether aggressive, conservative, defensive or competitive strategies are most appropriate
for a given organization. Focuses on strategy formulation especially related to competitive position.
D. GRAND STRATEGY MATRIX (GSM)
Focus on choosing the long term plans from the set of available alternatives.

RAPID MARKET
GROWTH
Q2 Q1

Market Dev Market Dev

Market Pen Market Pen
Prod Dev Prod Dev
Horizontal Int Forward Int
Divestiture Backward Int
Liquidation Horizontal Int
Related Diversification

WEAK COMP STRONG COMP

Retrenchment Related Diversification
POSITION Related Diversification Unrelated Diversification POSITION
Unrelated Diver Divestiture Liquidation Joint Venture

Q3 Q4

SLOW MARKET
GROWTH
E. SUMMARY OF STRATEGIES
STRATEGY OPTIONS TOWS IFE/EFE SPACE GSM TOTAL
Integration
Forward
Backward
Horizontal
Intensive
Market Penetration
Market Development
Product Development
Diversification
Concentric
Conglomerate
Horizontal
Defensive
Retrenchment
Divestiture
Liquidation
Joint Venture
V. RECOMMENDATION
A. Quantitative Strategic Planning Matrix (QSPM)
KEY FACTORS Weight STRATEGY 1 STRATEGY 2 STRATEGY 3
OPPORTUNITIES Rating Score Rating Score Rating Score
1.
2.
3.
4.
THREATS
1.
2.
3.
4.
Sub Total:
STRENGHTS
1.
2.
3.
4.
WEAKNESSES
1.
2.
3.
Sub Total:
OVERALL SCORE: 1.0
RECOMMENDATION:
VI. ACTION PLAN

Functional Areas Objective Strategy Time Frame Budget

Marketing

Production

Organization

Finance

HRD

Information
System

R&D
VII. FINANCIAL PROJECTIONS (3 Years)

1. Projected Income Statement

2. Projected Balance Sheet
3. Projected Statement of Cash Flow
4. Projected Ratio Analysis