Assignment on Pfizer

Submitted to: Shahnawaz Adil

By Group Members

Kiran Qasim – 1498

Bushra Haris – 1316

Nida Javed – 1497

Rana Asim Hussain – 1517

Farah Yaqoob – 1297

Table of Contents

Company Overview

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Organizational Structure..............................................................................................................4

Organizational Size........................................................................................................................5

Organizational Effectiveness........................................................................................................6

Business Model...............................................................................................................................9

Leadership Style...........................................................................................................................11

Management Practices.................................................................................................................11

Pfizer’s Acquisition Of Wyeth....................................................................................................12

Conclusion....................................................................................................................................12

Recommendation..........................................................................................................................13

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Company Overview

Pfizer is the world largest pharmaceutical company. Pfizer was incorporated on June 2, 1942 originally based in New York City, with its research headquarters in Groton, Connecticut. The company deals with two business segments namely biopharmaceutical and diversified. Its known products include cholesterol-lowering Lipitor, pain management drugs Celebrex and Lyrica, pneumonia vaccine Prevnar, high-blood-pressure therapy Norvasc, and erectile dysfunction treatment Viagra. The company markets its pharmaceuticals directly to health care providers and patients. The current CEO of Pfizer is Jeffrey .B. Kindler. Pfizer faces great competition globally from Barr pharmaceuticals, Mylan laboratories, Teva pharmaceutical industries, Watson pharmaceuticals, Ranbaxy laboratories, Merck, GSK, J & J and Abbott laboratories.

Pfizer recorded revenues of $16.2 billion during the third quarter of 2010. And they also acquired king pharmaceuticals in October 2010 which will also help increase their revenues and market share.

History

Pfizer was founded by Cousins Charles Pfizer and Charles Erhart in 1849, and then up till now it is determined in developing research based products that help prevent from diseases in order to serve the humanity around the world.

Timeline

1849 – 1899

In 1849, cousins Charles Pfizer and Charles Erhart founded Charles Pfizer and Company in a red brick building in Brooklyn, New York.

1900 – 1950

The new century brought success to Pfizer. The pioneering of the mass production of citric acid from sugar through mold fermentation fueled growth for years.

1951 – 1999

The second half of the 1900´s saw intense pharmaceutical research and great successes for Pfizer.

2000 – Present

Pfizer increases its global existence through the acquisitions of Warner-Lambert and Pharmacia and also due to acquisitions of diversified businesses, such as Wyeth. Pfizer continues to do great research and development on its products focus on applying science in order to improve health and well-being of people at every stage of life.

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Organizational Structure

Pfizer is a professional bureaucratic organization. It relies for the coordination and specialization of skills. Its organizational structure, procedures, protocols, and set of regulations in place to manage activity, all are set by the top management at US headquarter. Then the regions are directed to follow the same. But, the regions also have given authority to take decisions according to the cultural context and the needs of the customers, by the consent of the Headquarter functional. It represent standardized procedure that guides the implementation of all processes, formal division of powers in hierarchy, and relationships, planned to predict needs and improve efficiency. It relies for its core tasks like Research on trained professionals and skilled people who have given significant control over their own work. The structure appears as much decentralized. The managers were given power over many decisions, both operating and strategic. Their supporting staff is also trained as they are working in the pharmaceutical company which highly believes in the quality of its products.

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Organizational Size

Employees

Pfizer is an innovation-intensive business, its employees are imperative to its success. They have good relations with their people. In the year 2010, they hired approximately 116,500 people in operations throughout the world. Total Pfizer’s headcount was over 74,000 while total Wyeth’s headcount was more than 42,000. In Pakistan the headcount is approximately 2000.

Operations

Pfizer has also developed an improved commercial operating structure. Pfizer has nine diverse health care businesses: Primary Care, Specialty Care, Oncology, Emerging Markets, Established Products, Consumer Healthcare, Nutrition, Animal Health and Capsugel. Each of these business units are directed by an executive with clear accountability for results - from product development following proof of concept to providing access to patients and through to the end of the product's life cycle. The businesses are provided with the resources to pursue attractive growth opportunities and to deliver benefits to all who rely on Pfizer around the world.

With this improved structure, Pfizer is able to quickly capitalize on opportunities to advance business by increasing support for successful new medicines, building partnerships with key customers, entering into co-promotion and licensing agreements, investing in new technologies to add value to core product offerings, and acquiring new products and services from outside the company in order to serve more patients more rapidly.

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Organizational Effectiveness

Overall effectiveness

Pfizer Inc, the world’s leading research-based pharmaceutical company, ascertain, widen, produce and promote prescription medicines in 10 therapeutic areas including oncology, cardiovascular, pain, neuroscience and infectious diseases, including HIV/AIDS. Pfizer is also the world’s biggest animal health company.

Profit

Pfizer, confronted with expected sharply lower 2009 earnings, has vowed to cut 15 percent of the combined company's workforce of about 130,000 employees and close some manufacturing sites. As with big past deals, that would provide huge cost savings that will support earnings for awhile.

Quality

Medicines are used mainly successfully to complete longer and improved lives. This comprises recommending and providing access to the accurate medicine for every patient.

Accident

Pfizer strives for workplace health and safety. Injury reductions reflect continuous improvements through the years. They have placed significant focus on building and reinforcing awareness and participation in safety efforts. Upgrading workplace safety, one of their most important missions, and is supported by senior management. Overall, Pfizer has a good health record and safety performance.

Growth

Pfizer sustained growth from its key medicines. The company is acquiring other giant pharmaceutical organizations to enlarge its portfolio of important medicines.

Motivation

Appreciate colleagues and employees if they do something extraordinary. They motivate by giving awards and rewards to the deserving. Appreciation encourages people to work more and create interest in them to achieve further.

Value of HR

Most essential quality in Pfizer is: Respect for all. Their employees have great worth in the organization. They are considered as Pfizer’s valuable asset.

Flexibility and Adaptability

Following the rules is must but not all the time and in every critical situation. The management bends the rules when employees/subordinates face critical life situations.

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Roles

Employees are liable for Continuous Improvement program in the organization with an endeavor to develop organizational success, i.e. enhancement in lead time for business procedures, lessening in operational expenses, and expansion in of cash flow and revenue growth opportunities.

Morale

Giving respect to the colleagues at Pfizer is must as it will help managers and employers to get much better output at work. By doing so, colleagues also develop a sense of belongingness to the work environment, which lead to reduction in attrition rates.

Participation

Pfizer management provides equal opportunities to everyone like Project Manager, Team Leader, Senior Engineer, including programmers and trainee programmers to offer ideas and suggestions on how to deal with an issue. The management considers and values the suggestions of their employees.

Training and development

Pfizer certainly demonstrates its continuing commitment to training. Pfizer also has made considerable investments in its sales training infrastructure, the largest training organization in the company with regard to budget and people. Pfizer also developed new training programs for new hires working in specific pharmaceutical areas such as diabetes, cardiovascular and infectious diseases.

Goal setting

Pfizer believes without a goal you have no direction and you will keep on going in circles.

Absenteeism

Over the last nine months, Pfizer’s team has handled to cut absenteeism by 40%. At Pfizer they have made it a point that their people do not have to set foot outside from their offices in order to access wellness support systems. They can visit a doctor, nurse, physiotherapist and psychologist, all are available in the same building as their offices.

Turnover

In year 2009 Pfizer’s performance was helped by its acquisition of Wyeth, The US drug firm posted net income for the year of $8.6bn, up 7 per cent on 2008, helped by a quarter 4 sales boost. The firm explained that sales for the final three months of the year, which grew 34 per cent, quarter were favorably impacted by 27%, due to the addition of Wyeth products.

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Job satisfaction

Human Resource department and philanthropy initiatives in Pfizer have extended employee volunteering programs as a social responsibility initiative. Such programs have been successful in leveraging employee job satisfaction

Farzain Messman, Manager Talent Acquisition & HR Services said that, “The employees’ love the way they are being treated their employers. The employers make everyone experience an equal opportunity for advancement.”

Stability of Growth

Pfizer focuses on three prospects to derive continual growth. First, to deliver the range of medicines by maximizing productivity and ROI, getting in-depth information of pathogenic methods and bringing medically differentiated products. Second, to be pioneer and derive new facilities by developing next generation therapeutics, to unlock external innovation and Vaccines for all ages. Lastly, by focusing on Research and Development for the future growth of the organization.

Readiness

Doing things in a different way, taking a new approach to continue and build trust in business and satisfy needs of people today while defending the wellbeing of tomorrow’s generation. To meet these new responsibilities, Pfizer will need to amplify the absorption of corporate responsibility concerns into business and enlarge alliance with stakeholders. Their efforts over the past few years have set them on the path to meet these organizational goals, and they are making further efforts to ensure that they meet society’s expectations as the company grows.

Information Management and Communications

Pfizer hired a consulting group to build and employ a quick information management in order to work closely with employees in different locations. Using Pfizer’s ‘Rapid Systems Development’ methodology, the consulting group brings a proof in just two weeks. The system, Strategic Technologies, Alliances and Relationships (STAR) was implemented in six weeks later and was in use at all locations after only eight weeks.

Utilization of Environment

Despite the criticality such as access to medicines has usually prevailed in the pharmaceutical and health care sector, Pfizer’s environmental, health and safety (EHS) practices have increasingly sparked the interest of stakeholders. They contribute in organizations around the world to better understand major environmental issues, enabling Pfizer to work for workable solutions like sharing best practices in energy efficiencies.

Achievements

Their recent launches Chantix and Suten, bear testimony to thier claim of making breakthrough medicines accessible to the common man. Pfizer has been a leader in breaking grounds in the health sector by inventing and discovering medicines. In Feb 2010, Pfizer Pakistan launched Parketin, a first line treatment for neuropathic pain.

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Business Model

Pfizer’s business model describes how their organization creates, delivers, and captures value from economic, social and other forms. The process of business model design is a part of business strategy that is why business model have a worth for an organization.

These are nine different parts on which Pfizer is relaying and how these parts creating value for Pfizer are discussed below.

Key partners

The key partners of Pfizer are Warner-Lambert, Pharmacia and Wyeth. Pfizer acquires all the material from foreign countries because they do not comprise on quality. Pfizer primarily acquires materials or services from their partners. Pfizer partners provide the means to conduct day to day business operations, whether that means play a part in development of products or in the delivery of those products to their customers.

Key resources

The resources which Pfizer`s value preposition requires are newness, performance, brand/status, price and accessibility. Pfizer distribution channel consists of the distribution corporations that provide the logistical support for products to get to their customers.

Customer segments

Pfizer create value for their end consumer – the patient. Pfizer create value by providing them with solutions to their health problems in an effective manner that is compliant to global regulatory rules. Pfizer most important customers are the patients who benefited them by consuming their products. In order to have access of those consumers, they first target the doctors who recommend their medicines to their patients.

Supply Chain

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Ideally customers want Pfizer to reach them directly or at best directly at the nearest pharmacy to their location. At the moment, Pfizer is reaching them directly through Pfizer Direct programs (limited products) and also via the pharmacy channel.

Pfizer has many different distribution companies working in collaboration in an effort to get its product out to where it is needed. Some of the distribution channels are Ali-Traders, Al-Madina, Baloch Enterprises, Real Channel, and UDL etc. Distribution channels play a very important role in the success of availability of any product in the market.

Value prepositions

We are moving to a customer-centered world that reflects customer is king and we have to satisfy our customer in order to get more revenue. So Pfizer always deliver on what it promises in products and services to get customer attention. It serves its customer’s health problems primarily. It satisfies its customer’s self preservation need which is one of the basic needs every individual has.

Customer relationships

They are deeply committed in meeting the needs of their customers, and they constantly focus on customer satisfaction. Pfizer strive to provide access to safe, effective and affordable medicines and related health care services to the people who need them. For this they first target the doctors and market their product to them. As Pfizer is a big company and it already have a name globally, so, their sales team does not have to work hard to convince a doctor to recommend their product. They always provide better quality to retain its customer. And to build good relations they invited doctors in their health related programs.

Revenue streams

Customers in Pakistan are prone to purchasing lower cost medicines due to the socio economic situation in Pakistan. Pfizer’s customers pay for the quality of products that Pfizer ensure. Payment in Pakistan for medicines is primarily cash driven at the moment. Electronic payment is not very widespread due to the low cost of medicines. Their current mode of payment is their preferred option.

Key activities (Distribution Channel)

The Key activity of Pfizer value preposition requires is proper supply chain because SCM is the back bone of any business. Some of its distribution channels which work in Karachi are Real Channel, UDL, UDL Karachi East, UDL Karachi North and UDL Karachi South.

Cost structure:

The most costly inherent in their business model is supply chain management and maintaining healthy relation with their most prestigious partners. The most expensive key resource is physical structure and human. The most expensive key activity is distribution channels.

Leadership Style

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Delegative Style

In Pfizer the manager handover the authority to his employees to make decisions. However, the manager is still responsible for the decisions that are made. This is applied in those situations where employees examine and decide what needs to be done and how it should be done. Their managers set priorities and assign certain tasks. In Pfizer this style is used because managers have full trust and confidence in their employees.

Authoritarian Style

In Pfizer authoritarian style is used in training their new employees. The leader in Pfizer is a skilled and experienced trainer who motivates its new employees so that they can contribute towards prosperity of the organization.

The employees are well motivated and leaders tell their employees what they want done and how they want it accomplished, without getting the advice of their followers. This style best helps in situation when to train employees and exert their talent and skills for the betterment of the organization.

Management Practices

Performance reviews

Through performance reviews job performance of an employee in Pfizer is assessed usually by their respective manager. The management used to guide and administer career development of their employees by the help of the performance appraisal. They keep record about the successes and failures of an employee in a particular assignment or task, his strengths and weaknesses, and aptness for promotion or further training he might needed in some particular area. They used to measure performance of their employees on quarterly basis. The management set the last performance review as the standard for the next review of an employee. So that if the new supervisor wanted to complete an employee’s appraisal, he can easily completes it by reviewing his standards. If an employee demonstrated a poor performance, their respective supervisor guides him and motivates him so that he could improve his performance. Manager also gives a 3-6 month time interval in which the employee will be given a second chance to obtain a more favorable performance review. During the 3-6 month interval the supervisor set clear performance expectations along with coaching/mentoring in order to help the employee improve their performance. Their managers also provide ongoing feedbacks to further motivate their employees’ morale.

360 degree feedback programs

In Pfizer employees receive confidential, anonymous feedback from their colleagues. This usually includes the employee's supervisor, peers, and direct reports. For their sales staff they also take feedback from their customers to know where their sales force is lacking. The co-workers fill out an unspecified feedback form. The forms include questions that cover a wide range of workplace competencies. The questions included in a feedback forms are measured on a rating scale and on written comments of their colleagues. The employee getting feedback also fills a self-rating survey.

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Their managers use 360 feedback surveys to understand employees’ strengths and weaknesses. 360 Feedback proved to be a useful development tool for Pfizer to help their employees in being more efficient in their current roles, and also to help them understand what areas they should focus on if they want to achieve success. The outcomes from the feedback are also used in making managerial decisions, such as pay increment and in promotions.

Success Story

Pfizer's Acquisition of Wyeth

In January 2009, Pfizer acquired Wyeth, one of the leading pharmaceutical companies after Pfizer in US, by paying US$ 68 billion. Pfizer developed the world’s best selling drug, Lipitor. Pfizer had the great threat of loosing its major market share as its patent protection would expire in 2011 and they do not have any other product into their pipeline. Lipitor contributed more than 26% to Pfizer's revenues in 2008. In order to retain its market share, Pfizer adopted the strategy to expand its product line and diversify its sources of revenue by acquiring Wyeth.

Around the same time Wyeth also faces the patent expiry issues as same as Pfizer had. The pharmaceutical industry were having a chance of growth in future because major pharmaceutical companies started building their R&D strong and had started research in this area. So in order to sustain their position in the market Pfizer decided to acquire Wyeth. However, Wyeth had significant presence in bio-pharmaceuticals where Pfizer was lagging behind considerably.

The combined company became one of the most diversified companies in the global health care industry. The company has product offerings in abundant in therapeutic areas which is a strong product pipeline of Pfizer. The employees, products, and technologies that Wyeth brings to the new company enhanced Pfizer’s competencies and helped them to further improve their product offerings. Their geographic presence in the developed and developing countries became stronger. The revenue was significantly increased from US $ 48 billion to US $71 billion. Thus, the new company became an industry leader in human, animal, and consumer health care sectors.

Conclusion

 Pfizer is a multinational pharmaceutical company devoted to discover and develop innovative products which improve the health and value of the life of people around the world. To achieve the goals, Pfizer look for ways to create business environments that attract and retain the best people, promote a balance between work and life activities, and to make them cost-effective.

Recently, Pfizer has reduced organizational layers to speed up their decision-making process. As after the acquisition of Wyeth and King Pharmaceuticals the number of employees had increased. The company mutually decided to downsize. Their key objective is to retain their top talented people to achieve quality results that exceed the expectations of their stakeholders.

Pfizer is continuously bringing improvement in the productivity of research and pursuing a broader range of opportunities, including biologics, oncology medicines, potential new treatments for Alzheimer's disease and even vaccines. They are constantly reviewing their market strategies to increase response of the patients and payers as well as the competitive challenges.

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Recommendation

During the interview it was found that the working culture of Pfizer Pakistan was not very much cooperative. The employees prefer to work in isolation rather than in teamwork. To motivate the employees managers should assigned them team tasks and adopt certain strategies to make the coordination better among their colleagues.

Farzain Messman, Manager Talent Acquisition & HR Services complained that sometimes gender discrimination was found in the recruiting process. Males were more preferred over female candidates. Therefore we recommend HR department to be fair in recruiting process. And hire the most deserving candidate including females.

Currently after the acquisition of Wyeth, Pfizer has changed their hiring policy. They are hiring the people on temporary basis. They will not get permanent job even after spending a long time in the organization. Whenever the company wants to downsize, they first fire those temporary employees. By this hiring policy, the employees are not happy and want their employment to be permanent. Therefore, Pfizer should review their hiring policy in order to retain top talented people.

References

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http://www.pfizer.com.pk/ http://www.pfizer.com.pk/MainPageView.aspx?q=113 http://www.pfizer.com.pk/NewsAndPress.aspx http://www.pfizer.com.pk/MainPageView.aspx?q=101 http://www.nytimes.com/2009/01/26/business/26drug.html

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