Pfizer Marketing Plan

Executive Summary: The following marketing plan will focus on how Pfizer, the leading company in the pharmaceutical industry will perform in tough competition conditions. A brief introduction of the field of pharmaceutical will be highlighted along with a short introduction about the company and its history. A market analysis will be performed to study the different factors affecting the pharmaceutical industry as a whole and our company specifically. The market analysis will give us a clear idea about where we stand and the competition present in our market and the market share of each competitor compared to ours.

SWOT analysis of the company will give us an indication of the strengths that we should maintain, the opportunities that we need to capture, and the weaknesses or departments that we need to get rid off.

A BCG matrix tool will be used to define and allocate our marketing resources that will help us with our marketing plan. Also Micro and Macro environmental analysis will be performed to help us define our objective. Management information systems will be highlighted to follow the progress of our internal and external environment in order to direct us into choosing the right objective.

An objective will be set based on the analysis that has been done through studying the market. Easily implemented and cost effective scenarios will be suggested to help us reach our objective. An action plan will be executed using different modules suggested in the different scenarios chosen to achieve the objective at hand.

A final result of the action plan will be presented, either with a success or failure of the objective, followed by recommendations to better choose the data at hand or suggesting different ways to achieve the objective. 1. Introduction 1. 1 General Introduction Pharmaceutical companies are all around the globe. This explains the importance of such an industry. Organic chemistry is the foundation of the pharmaceutical industry.

The industry started in the European region as a dye industry in the nineteenth century, which then evolved to start the first full drug companies. The pharmaceutical industry moved to New Jersey and the surrounding areas around the twentieth century, making it the headquarters for many of the premier pharmaceutical companies in the world.

Now, hundreds of companies are present in all regions of the world. The biotech industry found its way into the pharmaceutical industry, helping into finding new cures. Research is the most important asset that a pharmaceutical company could have in order to have a competitive edge with its new research results for new drugs.

Much of the reason for the recent mergers is the need to have critical mass and money for research. 1. 2 My position Identifying a problem in the company is the first step into its growth. I work as a medical representative at Pfizer.

The main purpose of this job is to develop a good perception at different doctors’ minds and convince them into prescribing our products to their patients to increase our revenues, and ultimately our market share.

1. 3 History of the Company Pfizer started as a fine chemicals business, Charles Pfizer and Company, in 1849 in New York. One of the major events that helped Pfizer with its success is the production of citric acid through fungal fermentation of sugar, which was originally produced using calcium citrate, which was originally imported from Italy.

Citric acid was used in the production of an antibiotic, and this new way of producing it was very useful to treat injured allied soldiers during World War II. The discovery of other products through research in the 1950s moved the company on the path of change from a manufacturer of fine chemicals to a research pharmaceutical company.

Pfizer also began a program to discover drugs through chemical synthesis, along with its research in fermentation technology. Pfizer also established an animal health division in 1959.

Now, Pfizer is the largest company in pharmaceutical and biotechnology industry ranked by healthcare revenue as of 2008 after its mergers with Warner-Lambert (2000), with Pharmacia (2003), and with Wyeth (2009). As of March 2010, Pfizer ranked number two in pharmaceutical companies according to revenues. Vision and Mission Pfizer will strive to achieve and sustain its leading place as the world’s premier research-based pharmaceutical company.

The company’s continuing success benefits patients, customers, shareholders, business partners, families and the communities in which they operate all around the world.

Pfizer’s mission is to become the world’s most valued company to all of these people. Our Mission Statement We will become the world’s most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live. Our Purpose We dedicate ourselves to humanity’s quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer, and animal health products. To achieve this purpose and mission, Pfizer affirm the values of Integrity, Leadership, Innovation, Performance, Teamwork, Customer Focus, Respect for People Community, and Quality. Our Values

Pfizer seeks to demonstrate a number of core values in the way it conducts its business around the world.

[pic] Integrity We demand of ourselves and others the highest ethical standards, and our products and processes will be of the highest quality. Our conduct as a company, and as individuals within it, will always reflect the highest standards of integrity. We will demonstrate open, honest and ethical behavior in all dealings with customers, clients, colleagues, suppliers, partners, the public and governments. The Pfizer name is a source of pride to us and should inspire trust in all with whom we come in contact.

We must do more than simply do things right—we must also do the right thing [pic] Leadership Leaders advance teamwork by imparting clarity of purpose, a shared sense of goals and a joint commitment to excellence. Leaders empower those around them by sharing knowledge and authority and by recognizing and rewarding outstanding individual effort.

We are dedicated to providing opportunities for leadership at all levels in our organization. Leaders are those who step forward to achieve difficult goals, envisioning what needs to happen and motivating others.

They utilize the particular talents of every individual and resolve conflict by helping others to focus on common goals. Leaders build relationships with others throughout the company to share ideas, provide support, and help assure that the best practices prevail throughout Pfizer. [pic] Innovation Innovation is the key to improving health and sustaining Pfizer’s growth and profitability.

The quest for innovative solutions should invigorate all of our core businesses and pervade the Pfizer community worldwide. In our drive to innovate, we support well-conceived risk-taking and understand that it will not always lead to success.

We embrace creativity and consistently pursue new opportunities. We look for ways to make our research and development capabilities, our products and our services more useful to our customers, and our business practices, processes and systems more efficient and effective. We listen to and collaborate with our customers to identify and make widely available potential new products.

[pic] Performance We strive for continuous improvement in our performance. When we commit to doing something, we will do it in the best, most complete, most efficient and most timely way possible. Then we will try to think of ways to do it better the next time.

We will measure our performance carefully, ensuring that integrity and respect for people are never compromised. We will compete aggressively, establishing challenging but achievable targets and rewarding performance measured against those targets. We wish to attract the highest-caliber employees, providing them with opportunities to develop to their full potential and to share in the success that comes from winning in the marketplace.

[pic] Teamwork We know that to be a successful company we must work together, frequently transcending organizational and geographical boundaries to meet the changing needs of our customers.

We want all of our colleagues to contribute to the best of their ability, individually and in teams. Teamwork improves the quality of decisions and increases the likelihood that good decisions will be acted upon. Teamwork sustains a spirit of excitement, fulfillment, pride and passion for our business, enabling us to succeed in all of our endeavors and continually learn as individuals and as a corporation. [pic] Customer Focus We are deeply committed to meeting the needs of our customers and constantly focus on customer satisfaction.

We take genuine interest in the welfare of our customers, whether internal or external.

We recognize that we can prosper only if we anticipate and meet customer needs, respond quickly to changing conditions and fulfill customer expectations better than our competitors. We seek long-term relationships based on our comprehensive understanding of all our customers’ needs and on the value we provide through superior products and services. [pic] Respect for People We recognize that people are the cornerstone of Pfizer’s success. We come from many different countries and cultures, and we speak many languages.

We value our diversity as a source of strength.

We are proud of Pfizer’s history of treating employees with respect and dignity and are committed to building upon this tradition. We listen to the ideas of our colleagues and respond appropriately. We seek a business environment that fosters personal and professional growth and achievement. We recognize that communication must be frequent and candid and that we must support others with the tools, training and authority they need to succeed in achieving their responsibilities, goals and objectives. pic] Community We play an active role in making every country and community in which we operate a better place to live and work, knowing that the ongoing vitality of our host nations and local communities has a direct impact on the long-term health of our business. [pic] Quality Since 1849, the Pfizer name has been synonymous with the trust and reliability inherent in the word “Quality”.

Quality is ingrained in the work of our colleagues and all our Values. We are dedicated to the delivery of Quality health care around the world.

Our business practices and processes are designed to achieve Quality results that exceed the expectations of patients, customers, colleagues, investors, business partners, and regulators. We have a relentless passion for Quality in everything we do. 2. Market Study (Analysis) 2.

1 Market definition The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies can deal either in generic or brand medications. They are subject to a variety of laws and regulations regarding the patenting, testing and marketing. 2. Industry Trend The Middle East combined with the African Pharmaceutical market is projected to grow at a compound annual growth rate of around 11% during 2010-2012. The development of infrastructure and rapidly changing regulations in this region are being seen as the cause of its growth.

Also there is a high prevalence of diseases and huge population base that increases the overall pharmaceutical sales in this part of the world. Presently South Africa, Saudi Arabia and Israel dominate the region’s pharmaceutical industry due to their better infrastructure and regulatory environment.

However, The Middle East pharmaceutical market depends on imported pharmaceutical drugs and therapeutics. The governments of countries in this region are taking measures to raise their domestic production through heavy investments in the pharmaceutical industry. How far they are successful in the attempt of becoming considerable pharmaceutical production center remains to be seen. 2.

3 Market Segmentation Segmentation analysis is actually based on the theoretical belief that every consumer has different attitudes, perceptions and purchasing behaviors. However, these differences are not wholly idiosyncratic.

Hence, consumers with similar needs and preferences must be grouped together apart from other groups with other preferences. This further stresses the importance of market segmentation to business. Market segmentation refers to the practice of dividing the total market into several groups, where the preferences of each consumer on products, services and distribution methods are all taken into account. This strategy appears to be an effective tool primarily in addressing mature markets.

This is mainly because markets of this type are typically huge in size and highly diversified.

Market segmentation pertains to marketing efforts provided to a group of potential buyers based on various characteristics. These characteristics may include demographic, geographic, lifestyle and behavioral data. Hence, market segments are typically based on age, income, occupation, gender and behavioral aspects. Through market segmentation, the company is able to include efficiency and specialization into its marketing operations.

By designing certain marketing programs, companies can align their products with the specific needs of their market segments, resulting to better marketing results.

The preferences, needs and tastes of consumers tend to change over time. Hence, identifying a new market, or a market niche, is essential. Aside from developing a new product for this new market, Pfizer may also apply newer approaches that will include the new market segment. Research perhaps may be the most valuable tool that the company can use to gather significant data for these new market segmentation approaches Selecting a single method to create a market segment is not possible. This is because a number of variables on segmentation would have to be evaluated alone and in combination to other variables.

In order to create an effective market segmentation approach, a step by step process must be conducted. This process include the identification of the market segmentation bases, the development of market segment profiles, the identification of the segment size and profitability, selection of target markets, product positioning for every target market and the development of an appropriate marketing mix to reach every target market. In order to enhance the current market segmentation applied by Pfizer, the process described above should be performed.

In addition, below are some of the approaches that can be applied by the company: • Behavioristic Segmentation In this approach, consumers are segmented into groups based on their attitudes, uses, knowledge or responses to a certain product. In this segmentation approach, the focus is on buying situations, which tend to vary depending on circumstances and buyers’ time.

With behavioristic segmentation, Pfizer may be able to identify other market segments. Current trends suggest that customer preferences tend to change rapidly, and that most businesses are becoming more and more customer-oriented.

Hence, applying the behavioristic segmentation approach is very much applicable to this industrial change. In implementing this approach, Pfizer may conduct a consumer study focusing on their product and brand preferences as well as current needs. Buying trends may also be included in this market segmentation approach.

Rather than focusing on market size alone, Pfizer need to be more focused on the needs of the customers found in other market segments. • Usage Segmentation Usage segmentation is aptly named as this approach focuses on how arket segments use a particular product. When a company makes use of this segmentation approach, a new and distinct product is usually developed. In addition to product development, special prices, promotional activities and distribution methods are established. In most instances, these special activities are beneficial as they enable the establishment of customer loyalty.

In utilizing the usage segmentation for identifying market segments, companies and marketers are able to target various segments even when the customers are the same.

For instance, a market segment may be price sensitive in one situation, such as purchasing a vaccine for everyday use, and price insensitive to other situations, like purchasing vaccines in times when epidemics are likely. Hence, inexpensive vaccines may be offered to consumer for everyday use and more expensive vaccines for other cases and emergencies. • Psychographic Segmentation This approach is primarily composed of motivation, lifestyle and personality variables. A single psychographic variable may be used on it own in identifying a market segment, or it may be combined with other psychographic variables.

Consumer personalities like compulsiveness, aggressiveness, introversion and extroversion are some examples which can be used to divide a market.

Motive on the other hand, is the drive that provides the consumers with the direction to move towards goal achievement. While it is hard to accurately measure the extent of a motive, marketers have used this segmentation approach to markets. Among the most common motives that may affect the types of products purchased and where these products are purchased. Lifestyle is also part of this segmentation approach.

Lifestyle and market segmentation are considered to be related concepts and are potent tools for maximizing profitability and satisfying consumer preferences. When lifestyles are analyzed, opinions, interests and activities of the consumers are usually considered.

Thus, activities like work, hobbies and leisure, or opinions such as on social, political and educational issues are take n into account in this segmentation approach. This approach can help Pfizer identify which of the consumers are considered hobbyists or traditionalists. 2. 4 Company’s 4 P’s 2. 4. 1 Product

Pharmaceutical Segmentation [pic] Pfizer’s Pharmaceuticals Segment includes its human pharmaceuticals and animal health businesses, as well as Capsugel, a producer of two-piece capsules used in manufacturing prescription and over-the-counter pharmaceuticals and nutritional supplements.

Pharmaceutical: The Company’s Pharmaceutical business segment includes products that treat cardiovascular and metabolic diseases, central nervous system disorders, arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye disease, endocrine disorders and allergies.

Most of the company’s human pharmaceutical revenues come from products in three major therapeutic classes: cardiovascular diseases, infectious diseases and central nervous system disorders. The company also has products for the treatment of diabetes, erectile dysfunction and allergies, as well as a co-promoted product for arthritis. In 2000, the company had eight human pharmaceutical products with sales to third parties of $1 billion or more each. These products were Lipitor, Norvasc, Zoloft, Neurontin, Celebrex, Zithromax, Viagra and Diflucan.

Lipitor, Pfizer’s largest-selling product, is for treatment of high lipids, cholesterol and triglycerides, in the bloodstream. Norvasc is a once-a-day medication for hypertension (high blood pressure) and angina (heart pain). The company’s other cardiovascular products include Procardia XL, Cardura and Accupril/Accuretic. In the infectious disease medicine category, the company’s major products are Zithromax, Diflucan and Viracept. Pfizer’s other major pharmaceutical products include Glucotrol XL, for the treatment of diabetes, and Zyrtec, used for the treatment of allergies and related problems.

In February 1999, Pfizer participated in the launch of Celebrex with G. D. Searle ; Co. , a division of Pharmacia Corporation, the discoverer and developer of Celebrex. Celebrex is used for the relief of symptoms of adult rheumatoid arthritis and osteoarthritis. Animal Health: Pfizer’s Animal Health business segment discovers, develops and sells products for the prevention and treatment of diseases in livestock and companion animals.

Make vaccines, antibiotics, heartworm, etc. Consumer Products Segmentation In 2000, Pfizer’s Consumer Healthcare (CHC) Division had sales of $2. 5 billion.

Consumer Healthcare’s products include non-prescription, over-the-counter (OTC) medications, and compete primarily in the oral care, upper respiratory care, skin care, digestive health and eye care categories. Among the company’s brands in the United States are Listerine mouthwash and toothpaste; Benadryl antihistamine for allergies; Sudafed treatment for sinus congestion; Zantac 75 for prevention and relief of heartburn; Rolaids antacid tablets; Actifed for relief of cough, cold and flu; Benylin cough products; Sinutab for sinus pain relief; Efferdent denture cleaner; Neosporin antibiotic ointment; Nix lice treatment; e.

. t. home pregnancy tests; Visine eye care; BenGay topical analgesic; Cortizone hydrocortisone skin cream; Lubriderm skin care lotions; Unisom sleep aids; Desitin ointments for treatment of diaper rash; Plax pre-brushing dental rinse; and Barbasol shave creams and gels. Pfizer’s Adams Division markets a broad range of confectionery products. Among the Company’s brands are Halls cough drops; Trident sugarless gums; Bubbaloo, Bubblicious, Chiclets and Freshen-Up gums; and Dentyne, Certs, Clorets and Max Air breath-freshening gums and mints.

Pfizer’s shaving Products business consists of Schick and Wilkinson Sword razors and blades, and a range of manicure and toiletry products. The Company’s Shaving Products business includes Protector razor products with wire-wrapped blades to prevent nicks and cuts, the Silk Effects and Lady Protector razor line for women, Slim Twin razors with a rubber handle for increased control, the FX product line with flexible cartridges and Xtreme III razors with a triple-blade system. Another subsidiary of the company, Tetra, provides of products for the ornamental fish food market.

These products include TetraMin fish foods and various fish care accessories. 2. 4.

2 Price Pfizer’s reputation depends on the quality and safety of the products it sells. Whether medicines are produced internally or through agreements with external sources, Pfizer takes an active role in ensuring a secure supply chain to protect the patients who use its products. This could explain the high prices of Pfizer’s different products. 2. 4.

3 Promotion Pfizer uses different ways to reach out for its customers and increase their awareness about its different products.

Pfizer uses different ways of advertising to increase consumers’ knowledge about its products such as TV commercials, print media, internet etc. Also Pfizer increases their products’ awareness through sales promotions done with different selected doctors in order to increase their prescription rates. Medical representatives market the products directly to physicians and other healthcare providers to increase their awareness for specific new drugs or products. 2. 4.

4 Place

Pfizer is a leader of the world pharmaceutical industry with headquarters in New York City, USA, and the European headquarters in Brussels, Belgium. Pfizer operates in over 150 countries of the world meeting people’s needs in innovative and efficacious drugs. 2. 5 Competition and Market Share Pfizer finds its competition in many industries including the following: • Pharmaceutical manufacturers • Vitamins, nutritional ; other health-related products, • Over-the-counter medications, • Biotechnology, and • Biopharmaceutical ; Biotherapeutics, The following companies are Pfizer’s top competitors

GlaxoSmithKline [pic] The December 2000 merger of GlaxoWellcome and SmithKline Beecham created the GlaxoSmithKline, the world’s second largest pharmaceutical company with a global market share of 7%. GSK has global pharmaceutical sales of over $22bn and also the largest share in several therapeutic areas, including the vaccine and over-the-counter products (OTC).

However, GSK is still arguably a more global company (in terms of spread) than Pfizer, given that GSK generates a far higher proportion of its sales outside the North American market. GSK is ahead of Pfizer in every other region outside North America.

GSK generated a relatively high $6. 0bn, or 26. 6% of its sales, in the European market in the year to September 2002 compared to Pfizer’s $3. 8bn (16.

9%). The region in which Pfizer’s market share is closest to GSK’s is Africa, Asia and Australasia; this is due mainly to GSK’s strong position in the large Japanese market, which has been targeted by Pfizer for future growth. Merck ; Co. [pic] Merck helps those who are hooked on hamburgers. Drugs treating ailments associated with American eating habits — high cholesterol, hypertension, and heart failure — are Merck’s biggest business.

Its drugs include hypertension fighters Cozaar and Hyzaar, cholesterol combatant Vytorin, and Zetia which the pharma produces separately as well. Merck is the third-largest global pharmaceutical company. Excluding organic growth, for Merck to rival the top two it will have to acquire at least one of the 15 leading pharmaceutical firms in the world – a smaller acquisition would not gain it sufficient market share to overtake either Pfizer or GSK. While it has not gone for a full-blown merger, Merck, like other drug companies, has increased the number of collaborations with external and biotech firms.

It has so far signed close to 50 deals with research partners in the past 5 years. Merck has also teamed with Schering-Plough to develop respiratory drugs.

Merck’s strategy is to focus on breakthrough drugs, rather than go the consolidation route or imitate competitors with so-called “me-too” products. Unfortunately its current product pipeline is rather weak and Merck may come under increased pressure to merge as a means of gaining market share and growth. Analysts believe Merck’s ideal merger candidate would be Johnson & Johnson due to the little overlap with Merck’s pharmaceutical portfolio.

Novartis [pic] It is based in neutral Switzerland. Novartis has been aggressive in attacking illnesses. The company’s prescription drugs include treatments for nervous system and ophthalmic disorders, cardiovascular diseases, and cancer.

Bayer [pic] The company, which created aspirin in 1897, makes health care products (diagnostic equipment and pharmaceuticals), agricultural products (crop protection and animal health), and specialty materials(plastics and synthetic rubber). It operates in the US through Bayer corporation .

Bayer has reorganized, spinning off its divisions and becoming a management holding company. Table 1: Ranking of the top ten pharmaceutical corporations |Ranking |Corporation |Market Share (%) | |1 |Pfizer |7. 5 | |2 |GlaxoSmithKline |6.

9 | |3 |Merck ; Co. |5. | |4 |AstraZeneca |4. 4 | |5 |BMS |4. 1 | |6 |Novartis |3. 9 | |7 |Johnson |3.

8 | |8 |Aventis |3. | |9 |AHP |3. 2 | |10 |Pharmacia |3. 1 | [pic] Top Pharmaceutical Corporation Market Share Here is a comparison made based on performance on July 2nd, 2010. [pic] 2. 6 SWOT Analysis SWOT analysis is done on Pfizer to determine where the company stands and if it is in a good position as a business entity.

The result of this analysis defines the subsequent steps to be done, This SWOT analysis is used as a measurement tool for Pfizer. A result of 80 and higher means that the company is doing excellent. A total between 70 and 80 tells that the company is doing very well. A value between 60 and 70 does not give a clear indication if the company is doing well of not, also defined as a question mark. A result between 50 and 60 indicates that there is a serious problem which must be dealt with to drive the company to a higher level or it might get a score of lower than 50, which in this case means that the business should be killed.

Since inception in 1849, Pfizer has grown from a small family firm with two employees into a global enterprise with 95,000 employees on six continents.

Pfizer has increasingly focused its efforts on R;D and this remains its core business strategy. Pfizer’s strengths lie in its strong pipeline of innovative pharmaceutical compounds and strong marketing capabilities. Pfizer’s performance is characterized not only by size, but also by growth. In 1999, Pfizer achieved 20% revenue growth.

Pfizer has also set records in each of the past three years to 2003 with the most successful product launches in pharmaceutical history Lipitor, Viagra and Celebrex. Pfizer’s strength in R&D, marketing, and sales has made them a partner of choice for many companies in the pharmaceutical industry and they are involved in a wide variety of research collaborations and a large number of licensing agreements with universities, institutes and organizations.

An outline SWOT analysis of the world’s largest pharmaceutical firm follows next. Strengths R&D innovation with a broad therapeutic coverage39/40 • Marketing strength in major geographical and therapeutic areas18/20 • Existing Patent protection for a number of years on key products40/40 Total97/100 Opportunities • Decreasing development time through favorable R&D collaborations and internal efforts. 34/35 • Emergence of integrated global markets and globalization for new products. 34/35 • Co-marketing agreements with companies wishing to capitalize on Pfizer’s marketing strengths, providing Pfizer with strong products and therefore revenue growth. 28/30

Total96/100 Weaknesses • Discontinuation of products in the latter stages of development.

39/40 • Co-marketing agreements can limit Pfizer’s global presence. 34/35 • Increased size and operational complexity makes Pfizer a less agile company. 23/25 Total96/100 Threats • Increased competition for core products like Viagra as its high cost encourages use of cheaper alternative treatments. 29/30 • An increase in the number of safety issues surrounding Viagra. 28/30 • Competition from products similar to Pfizer’s in R;D that reach the market close to or before Pfizer’s products.

3/25 • The new economic potential of emergent China, India and competition in diverse regional markets. 12/15 Total92/100 Positives percentage: (Strengths + Opportunities) /2 = (97+96)/2 = 96. 5% Negatives percentage: (Weaknesses + Threats) /2 = (96+92) /2 = 94% Inverse: 100 – Negatives average = 100- 94 = 6% Final Result: Positives percentage – Inverse = 96. 5 – 6 = 90. 5% Pfizer has done quite well historically and analysis has revealed that they are looking to position themselves strategically for the future.

But as we enter a new era in the pharmaceutical industry with increased patent risks and lower marginal product returns, pharmaceutical firms like Pfizer must restructure their huge organizational mass to reduce structural inefficiencies, cut cost which is required to enable them complete better in the changing global environment.

Due to its massive R&D push, Pfizer suffers a relatively high rate of discontinuation in pre-approval products and more focus is required to reduce resources wastage. Pfizer’s lack of promising products in its early stage pipeline has left its combined pipeline relatively weaker.

This pipeline deficit will not manifest for a number of years yet, and Pfizer is perhaps well positioned than most to ensure that it balances its R;D pipeline before it (the US accounts for over 60% of Pfizer’s market area) may cause potential geographic limitations and can limit revenue growth should UD demand weaken. While the numbers of co-marketing and collaborative agreements, which Pfizer has established, are currently proving very favorable, agreements that geographically limit Pfizer’s activities will ultimately reduce its long term potential and must be guarded against. Finally, economic mergence of mass production economies like India; China into the pharmaceutical fray will require new containment strategies. While this is not an immediate threat, over time the nature of competition will change and the bug pharmaceutical firms must develop strategies to enable them reduce threats and seize the opportunities that era created in increasingly integrated global markets.

Now when we look at the SWOT analysis as a measurement tool for Pfizer, the total result was 90. 5% which indicates that the company is doing excellent and that we should not worry about the company being in a bad status. . 7 BCG Matrix |Stars |? | |Mergers with global company. |New training researchers. | |Research and Development Dept.

|New products. | | |Quality improvement program for suppliers | |Cash Cows |Dogs | |Well trained researchers. |Rest of the Labors. | |Marketing Dept. |Employees.

| |Products selling. | Increase Market share The BCG matrix tool identifies different departments or workers at the company which could be classified as cash cows, stars, question marks, or dogs. Recommendations on supporting the stars and cash cows are to be made, while trying to cut down the number of employees who are categorized under the Dogs title. 2. 8 Macro Analysis The macro analysis should be focused on as it will be a guide to know what we will do and the nature of the economic environment that is urrounding our company.

The following chart can help as a guide to show the steps we are going to discuss in mentioning the macro analysis. [pic] 2. 8. 1 Political Forces Over the years, the industry has witnessed increased political attention due to the increased recognition of the economic importance of healthcare as a component of social welfare. Political interest has also been generated because of the increasing social and financial burden of healthcare. 2.

8. 2 Social Forces Good health is an important personal and social requirement.

The unique role which pharmaceutical firms play in meeting society’s need for popular wellbeing cannot be underestimated. In recent times, the impact of various global epidemics as SARS, AIDS has also attracted popular and media attention to the industry. The effect of the intense media and political attention has resulted in increasing industry efforts to create and maintain good government-industry-society communications.

2. 8. 3 Technological Forces Modern scientific and technological advances in science are forcing industry players to adapt ever faster to the evolving environments in which they participate.

Scientific advancements have also increased the need for increased spending on research and development in order to encourage innovation. 2.

8. 4 Economic forces All organizations are affected by the economic conditions and fiscal policies of not only the country where they are located, but also globally as in the case with competition. 2. 9 Micro Analysis This section provides a summary positional analysis of Pfizer using Porter’s five forces model [pic] 2. 9.

1 Rivalry The rivalry among competitors in the Major Drug Industry has caused the buyout of several companies over the past few years.

For this reason Pfizer has almost tripled the size of its business over the past five years. The competitors push to get new and improved products out to the customers to improve their sales. The industry is growing so rapidly that no ceiling for profits has been hit. In other words, there are very few restrictions on how well a company can prosper and grow right now. This will change in the future when the companies start to slow down and compete for market share.

2. 9. 2 Threat of New Entrants Capital investment is very high; therefore, Pfizer took over five years to get approval from Federal Drug and Administration (FDA).

Main competitors in the Animal health products are focused on various animal products; skin infections, parasitic epidemics, pain relievers and dentals. Pfizer focused on well-care of the pets in addition to other Animal products.

Slentrol is a patented product. Pfizer drug technology is very sophisticated; Slentrol is a new chemical entity that triggers a lower fat absorption. Pfizer has a vast network of sales people (30,000), they cover most of the sales territories, locally and internationally. Distribution channels– wholesalers and retailers — are highly motivated to keep Pfizer products.

The end-users, pet hospitals and veterinarians are convinced on the usage of this drug.

2. 9. 3 Threat of Substitute Products: In the Major Drug Industry the subject of substitutes for products is unclear. Hospitals and doctors may tend to buy the cheapest of the drugs supplied, but because there are so many different aspects to each, it can diffuse some of the allowance for substitutes. Although some customers tend to be more conservative with their buying and chose generic brands, the majority of these brands are actually supplied by the same companies.

The threat of substitutes is low to moderate.

Generic competition is a major threat as it offers improved and or lower prices. There is also a low switching cost among generics. 2. 9. 4 Bargaining Power of Suppliers: Supplier power is moderate.

The industry is supported by the strong biotech industry in which many drugs are developed from. The industry’s long term growth depends on the ability to innovate and R&D make up a large part of the industry’s cost. Profitability for supplier is high. Once the drug side-effects are taken care of, suppliers can raise the price.

Quality and service are excellent from Pfizer; there are hot-lines and web-sites that will help to resolve the after-effects of the drugs.

Even veterinarians and pet hospitals provide good guidance and support to the pet owners. It is easy for suppliers to find new customers; the switching cost is low. Products are well branded; the brand personality and brand equity is strong. Pfizer’s relationships with the pet hospitals and veterinarians are very strong. 2.

9. 5 Bargaining Power of Buyers: Buyer power is moderate.

Patients have the freedom to choose their medications and make purchasing decisions based on its unique value. There is a lack of substitutes for products in their early years, as well as a lack of brand loyalty in the industry as a whole. Product is not standardized; there is less differentiation.

The drug benefits for buyers are high. Pfizer can be tough on drug pricing. There is a high switching cost because there are no competitors in the market. 3. Management Information Systems 3.

1 External Information Systems System Audit

This covers the quality of the organization’s systems for analysis, planning and control. The NORG Information Management System (NIMS) developed at Pfizer Central Research as part of the systems where the information is stored as ASCII files in a directory structure managed by an analysis software. The data is uploaded to the SOCRATES database written in-house in S1032 running on the main VAX cluster. A full investigation of the system of the system would involve analysis, design, development and implementation. In the time that was available for the project, only the first stage, i. .

, the analysis was viable. The analysis comprised of examining in some detail the information needed to carry out the functions identified, and the information to be provided on the ire completion. This includes finding out in more detail what the system’s problems are and what users require of any new or changed system through structured interview questions and some discussion with the users. Data flow diagrams and entity-relationship models (data analysis) were used as tools for the analysis. Form the answers obtained, data flow diagrams were drawn.

The data flow diagrams (DFD) were used to help define user requirements.

The entity-relationship model was used to identify all the natural relationships between the basic information components. After the entity and relationship sets were identified, the attributed (or properties) of objects in the sets were also determined. Attributes are characteristics of the entity. In the investigation, the requirement list and problems of the system were classified under the following main headings: (a) Security (b) Computer System (c) System Users d) Data and Results (e) Samples (f) General Requirements Strategy Audit This focuses upon a review of the organization’s marketing objectives and strategy; with a view to determining how well suited they are to the current and forecasted market environment. Pfizer’s 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.

Pfizer promotes and markets such highly promising products as celebrex, bextra, aricept and so on with alliance partners. Pfizer provides cash, staff and other resources to further develop, market, promote and sell the products in exchange for a share of revenues. 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 Florida’s agency for health care administration. 3. 2 Internal Information System

Typically, financial ratios provide the most benefit when they are compared with other identical ratios. A company’s ratios are used comparatively in two main fashions: over time and against other companies. Comparing the same ratios for a firm over time is a great way to identify a company’s trends.

If certain ratios are steadily improving, it may suggest an improvement in a company’s operations or financial situation; conversely, if certain ratios seem to be getting worse, it may highlight some troubling prospects about the firm.

It’s also important to compare a company’s ratios against those of others in the industry. A company’s ratios may be improving over time, but how do they stack up against their peers’ ratios? If they are not as rosy as those of competitors, this may indicate that the company is not as well positioned or managed as well as other industry players. Four of the major types we consider are efficiency, liquidity, leverage, and profitability ratios. As we describe some of the main ratios within each category, we will discuss what each one attempts to measure and what changes in them may indicate.

Leverage Ratios A company’s leverage relates to how much debt it has on its balance sheet, and it is another measure of financial health.

Generally, the more debt a company has, the riskier its stock is, since debt holders have first claim to a company’s assets. This is important because, in extreme cases, if a company becomes bankrupt, there may be nothing left over for its stockholders after the company has satisfied its debt holders. Debt/Equity: The debt/equity ratio measures how much of the company is financed by its debt holders compared with its owners.

A company with a ton of debt will have a very high debt/equity ratio, while one with little debt will have a low debt/equity ratio. Assuming everything else is identical, companies with lower debt/equity ratios are less risky than those with higher such ratios.

Debt/Equity = (Short-Term Debt + Long-Term Debt) / Total Equity Interest Coverage: If a company borrows money in the form of debt, it most likely incurs interest charges on it. The interest coverage ratio measures a company’s ability to meet its interest obligations with income earned from the firm’s primary source of business.

Again, higher interest coverage ratios are typically better, and interest coverage close to or less than one means the company has some serious difficulty paying its interest. Interest Coverage = (Operating Income) / (Interest Expense) Activity (efficiency) Ratios No matter what kind of business a company is in, it must invest in assets to perform its operations. Efficiency ratios measure how effectively the company utilizes these assets, as well as how well it manages its liabilities.

Inventory Turnover: Inventory turnover illustrates how well a company manages its inventory levels.

If inventory turnover is too low, it suggests that a company may be overstocking or overbuilding its inventory or that it may be having issues selling products to customers. All else equal, higher inventory turnover is better. Inventory Turnover = (Cost of Sales) / (Average Inventory) Accounts Receivable Turnover: The accounts receivable turnover ratio measures how effective the company’s credit policies are. If accounts receivable turnover is too low, it may indicate the company is being too generous granting credit or is having difficulty collecting from its customers.

All else equal, higher receivable turnover is better.

Accounts Receivable Turnover = Revenue / (Average Accounts Receivable) Accounts Payable Turnover: You will notice that the accounts payable turnover ratio uses a liability in the equation rather than an asset, as well as an expense rather than revenue. Accounts payable turnover is important because it measures how a company manages paying its own bills. High accounts payable turnover may be a signal that a firm isn’t receiving very favorable payment terms from its own suppliers. All else equal, lower payable turnover is better.

Accounts Payable Turnover = (Cost of Sales) / (Average Accounts Payable) Total Asset Turnover: Total asset turnover is a catch-all efficiency ratio that highlights how effective management is at using both short-term and long-term assets.

All else equal, the higher the total asset turnover, the better. Total Asset Turnover = (Revenue) / (Average Total Assets) Liquidity Ratios In a nutshell, a company’s liquidity is its ability to meet its near-term obligations, and it is a major measure of financial health. Liquidity can be measured through several ratios. Current ratio:

The current ratio is the most basic liquidity test. It signifies a company’s ability to meet its short-term liabilities with its short-term assets. A current ratio greater than or equal to one indicates that current assets should be able to satisfy near-term obligations.

A current ratio of less than one may mean the firm has liquidity issues. Current Ratio = (Current Assets) / Current Liabilities Quick Ratio: The quick ratio is a tougher test of liquidity than the current ratio. It eliminates certain current assets such as inventory and prepaid expenses that may be more difficult to convert to cash.

Like the current ratio, having a quick ratio above one means a company should have little problem with liquidity. The higher the ratio, the more liquid it is, and the better able the company will be to ride out any downturn in its business.

Quick Ratio = (Cash + Accounts Receivable + Short-Term or Marketable Securities) / (Current Liabilities) Cash Ratio: The cash ratio is the most conservative liquidity ratio of all. It only measures the ability of a firm’s cash, along with investments that are easily converted into cash, to pay its short-term obligations.

Along with the quick ratio, a higher cash ratio generally means the company is in better financial shape. Cash Ratio = (Cash + Short-Term or Marketable Securities) / (Current Liabilities) Profitability Ratios How good is a company at running its business? Does its performance seem to be getting better or worse? Is it making any money? How profitable is it compared with its competitors? All of these very important questions can be answered by analyzing profitability ratios. Gross Margin: Gross profit is simply the difference between a company’s sales of goods or services and how much it must pay to provide those goods or services.

Gross margin is simply the amount of each dollar of sales that a company keeps in the form of gross profit, and it is usually stated in percentage terms.

The higher the gross margin, the more of a premium a company charges for its goods or services. Keep in mind that companies in different industries may have vastly different gross margins. Gross Margin = (Gross Profit) / (Sales) Operating Margin: Operating margin captures how much a company makes or loses from its primary business per dollar of sales. It is a much more complete and ccurate indicator of a company’s performance than gross margin, since it accounts for not only the cost of sales but also the other important components of operating income such as marketing and other overhead expenses. Operating Margin = (Operating Income or Loss) / Sales Net Margin: Net margin considers how much of the company’s revenue it keeps when all expenses or other forms of income have been considered, regardless of their nature. While net margin is important to take note of, net income often contains quite a bit of “noise,” both good and bad, which does not really have much to do with a company’s core business.

Net Margin = (Net Income or Loss) / Sales Free Cash Flow Margin: The free cash flow margin simply measures how much per dollar of revenue management is able to convert into free cash flow. Free Cash Flow Margin = (Free Cash Flow) / Sales Return on Assets (ROA): Return on assets measures a company’s ability to turn assets into profit. (This may sound similar to the total assets turnover ratio discussed earlier, but total assets turnover measures how effectively a company’s assets generate revenue. )

Return on Assets = (Net Income + After-tax Interest Expense) / (Average Total Assets) We are adding back the company’s after-tax interest expense to net income in the calculation. Why is that? Return on assets measures the profitability a company achieves on all of its assets, regardless if they are financed by equity holders or debt holders; therefore, we add back in what the debt holders are charging the company to borrow money. Why are we adding interest back in on an “after-tax” basis? Interest expense is one of the many line items that are either added to or subtracted rom revenue to calculate the pretax income amount.

This pretax income amount is then taxed to come up with net income. Thus, when the income-reducing effect of interest expense is ultimately filtered down to net income, it is on an after-tax basis. A company’s after-tax interest expense is easy to determine. First, determine its tax rate by dividing its income tax expense by its pretax income. Then plug that figure into the following formula: After-tax Interest Expense = (1 – Tax Rate) x (Interest Expense) Return on assets is generally stated in percentage terms, and higher is better, all else equal.

Return on Equity (ROE): Return on equity is a straightforward ratio that measures a company’s return on its investment by shareholders.

Like all of the profitability ratios we’ve discussed, it is usually stated in percentage terms, and higher is better. Return on Equity = (Net Income) / (Average Shareholders’ Equity) 4. Objective The company’s main objective is to increase the market share from 7. 5% to 10% i. e. with an increase of the share by 2.

5% in a restricted time which is one year starting from June 2010 till June 2011. [pic] [pic] The previous diagram shows the new market share of Pfizer.

Pfizer will try to catch 1% of the new market share from its first direct competitor, GlaxoSmithKline, while capturing the other 1. 5% from the other competitors that are present in the market. 5. Customer Segmentation In this section we will classify Pfizer’s different products into four categories according to their prices since there are tens of products, and it will be relatively hard to divide the business portfolio on a drug by drug basis.

We will also need to divide the market into different market segments which are able to buy these different products that are divided into different groups.

The market will be divided into four groups. These groups contain different doctors who prescribe my products. These doctors are categorized based on the number of prescriptions written by them and the price of products written in each prescription. Accordingly, the following four groups are created 1- Doctors who prescribe drugs worth 2000 LE/month 2- Doctors who prescribe drugs worth 1000 LE/month 3- Doctors who prescribe drugs worth 600 LE/month 4- Doctors who prescribe drugs worth 250 LE/month As mentioned above we will also divide the business portfolio into four groups as follows: A- Products priced over 100 LE

B- Products priced between 50-100 LE C- Products priced between 10-50 D- Products priced under 10 LE [pic] [pic] [pic] [pic] Table 3: Amounts of products to be produced according to market demand.

| |A |B |C |D |Total | |1 |80 |15 |3 |2 |100 | |2 |15 |60 |20 |5 |100 | |3 |10 |15 |60 15 |100 | |4 |1 |2 |7 |90 |100 | |Total |106 |92 |90 |112 | | The previous table gives us an indication of some of the modifications that need to be done regarding manufacturing of these products.

We need to produce six extra units of the product A to meet the demand of our market, and to avoid the situation where we would be out of stock for these products. Product B production needs to decrease by eight units, since we only use 92% of what is generally produced. We need to decrease the amount produced of product C by 10 units since we have this amount stored in our inventory without use. Another increase in production needs to be implemented on product D since we are in need for an extra 12% of what is originally produced to meet the market demand.

. Scenarios In order to achieve such an objective in a critical period where the whole world is facing an economic crisis as well as recession and decrease in sales we have set different scenarios in order to overcome such situation and at the same time increase the market share. 6. 1 New Pricing Scenario One of the scenarios is aiming to decrease the prices of the current products through the concept of mass production, and that is for the sake of triggering customers to buy the product at lower prices.

As the prices decrease, the purchasing power of our customers will increase accordingly, giving them the ability to buy high quality products at lower prices.

Not only there will be an increase in the purchasing power, but a wider range of customers will be able to buy these products too. 6. 2 Marketing Scenario Another scenario that can be taken into consideration could be using different ways to increase advertising along with special promotions to different customer types such as physicians, veterinarians, pharmacists, or walk-in customers.

This way will increase the number of customers conversion from other companies, while maintaining the existing customers and increasing their loyalty. 6.

3 Product Portfolio Scenario Another approach that could be taken to increase the market share is the introduction of new products. These products could target new segments and thus increasing the total number of customers that are interested in our products, which were originally unable to buy our products. 7. Scenario Selection Table 2: Selection criteria for different proposed scenarios. Criteria |Product portfolio |New Pricing |Marketing |Total | |Competitive advantage |30% |50% |20% |100% | |Preparation ; Implementation |40% |50% |10% |100% | |time | | | | | |Profit margin |40% |40% |20% |100% | |Cost factor |(25)% |(50)% |(25)% |100% | |Total |85% |90% |25% | | 7.

1 New Pricing Scenario Modules

The previous table indicates that the new pricing strategy might be the best scenario to be taken into consideration in order to rise up with the company’s market share and thus improving its objective. As mentioned earlier, Pfizer’s products prices are relatively high compared to other pharmaceutical company’s products. This new pricing strategy will increase the ability of the customers to buy products that they never though of buying through Pfizer, and will also increase the number of customers buying these price-modified products. Also, this new pricing strategy might automatically open up a new customer segment to be targeted by Pfizer, which ultimately will also increase the market share of the company.

There are different modules to be taken into consideration in order to decrease the cost of goods sold and reduce the prices of the products accordingly. We can reduce the cost by negotiating the prices of raw materials from the supplier by getting any possible discounts or maybe change the supplier in the first place.

Another module that could be taken is to cut any unnecessary costs in the different departments such as Research and Development department. These cost reductions will give us a higher profit margin, which will give us more space to reduce prices in. A third way to reduce prices is to implement new ways in the manufacturing process, such as lean production. This is used to reduce the amount of waste that is created when you manufacture different products.

This program will increase the productivity because they get rid of waste and poor quality products, while not wasting time or energy on production cost.

Quality control performed on each step of the production process will decrease the number of products returned due to faulty production or manufacturing issues. This will decrease the cost of manufacturing while producing high quality products. A company can be efficient in every step of the production process, but still loses a huge amount of money because of its inefficient supply chain. The use of an efficient supply chain reduces costs tremendously and as a result gives a wider window for the company to reduce its prices. 7. 2 Product Portfolio Scenario Modules Changing the product portfolio could be done in different ways.

We can introduce new products, change existing products or eliminate some of the present products. Introduction of new products could be done in different ways. We can invent new products, which have never been produced before by anyone. This requires a fair amount of effort in order to come up with an idea of a product and will also use money to cover the research performed to come up with a good product. We can also produce different packages of existing products to cover a different market segment, while keeping the original products.

We might also need to eliminate some of the products present which do not generate cash, while a considerable amount of money is being spent on them to keep them operating. 7. Marketing Scenario Modules This scenario will find similar customers to the ones already present and make them use our products instead of the competitor’s products. This can be an effective route to increasing market share as it may need minimal adaptations to the products to meet similar customers’ needs. Direct mail could be an effective way to reach for customers that have been identified to be potential customers. Advertising in newspapers, magazines, television, or internet is a useful way to reach specific customers.

The use of certain media will specify the customer that these products will be targeted to. 8. Action Plan [pic] 9. Conclusion

After extensive study of the market and the pharmaceutical industry as a whole, taking into consideration the tough competition present between the top companies and analysis of the internal and external factors of Pfizer, an objective was set and an action plan was taken to reach this objective. The objective of Pfizer was to gain an extra 2. 5% of the market in one year.

Different scenarios were taken into consideration to reach this objective. An ultimate scenario, new pricing scenario, was picked and different modules were proposed. Also modules of supporting scenarios were set to help with the chosen scenario. An action plan was set and different modules were carefully selected to reach the objective at hand. Changes in the supply chain and implementation of new ways in the production process were two urgent modules that needed to be started by the start of the project to reach the objective.

Two moderately important modules were implemented from the first scenario to reach the objective. One module of product portfolio scenario was taken into consideration along with another module from the marketing scenario to accomplish the chosen objective. When this action plan was implemented, there was an increase in the market share of Pfizer of only 1%. This means that the objective was not accomplished. This goes back to more than one reason. One thing that played an important role in the failure of this objective is the tough competition present in the pharmaceutical market, which prevented Pfizer from acquiring the targeted new market share.

Another reason that prevented Pfizer from reaching its objective was the time constraint; one year is quite a short time to achieve such an objective. This gives us a clear idea about the recommendations that should be done to reach such an objective. There were no defects in the modules that were chosen. To achieve such an objective, we can simply increase the time needed to implement these same exact modules on a period of about two years instead of just one year. ———————– Increase Market growth Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Modules Efficient Supply chain Implement new ways in production process Lower supplier prices Cut unnecessary costs Advertising New packages of existing products