Pfizer strategy for internationalization
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Transcript of Pfizer strategy for internationalization
Submitted By :
Group 1
Aamir: 13074
Himanshu: 13021
Sruthi:13073
Salil Garg:13045
Krishnapriya:130271
Submitted to :Professor :Dr.Ajay SingalIMT ,Dubai
Introduction
Research-based, global pharmaceutical company
Function : Discovers, develops, manufactures and markets leading prescription medicines
Segment : Humans and Animals
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CORPORATION SIZE
3
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VISION & MISSION
Vision:
To become the world’s most valued company topatients, customers and businesses
Mission :
To develop medicines to cure & treat diseases,symptoms & sufferings.
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Evolution Of Pfizer Pfizer was founded by cousins Charles Pfizer and Charles
Erhart in 1849
First Product : Santonin ( Anti-Parasitic)
1900 : From family business to Incorporation
1939 : leading producer of citric acid
1944: leading producer of Pencillin “Miracle Drug “
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2012
PFIZER’S STRATEGIC MOVES
Enter New Product / Geographic Market
Capture Emerging Market
Strengthen Market Standing & Competitiveness : Acquiring or merging with the other companies
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STRATEGIC PRIORITIES
Drive incremental organic growth
Pursue strategic acquisitions & partnerships
Seek game changing opportunities for innovation.
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Internationalisation
1951: Brazil , Cuba, Mexico ,Belgium , Canada (DecentralizedDecision Making)
1952-58 :New R&D plants , Agriculture & Nutritional Divisions
1967 :Started Acquisitions , Partnerships (Eg:Warner Lambert ,Wyeth)
2013: Restructured into 3 Business units (2 innovative , 1 valuebased )
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Global Strategy
Mergers ( includes Warner Lambert)
Acquisitions ( includes Taito , Mark Illertissen, Wyeth ,NextWave, Excaliard, AstraZeneca Pharma, Inno Pharma etc.)
Partnerships & Joint Venture (Pfizer & Zhejiang Hisun Pharma Co,together formed Hisun Pfizer.)
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Global Access Strategy
Pfizer's Global Access team : exploring innovative business models
Increase access to healthcare and medicine for low-income populations inemerging markets
Private Sector Involvement in India
Growing Research and education:
Preferred research centres to build research capacity
Pfizer Education and Research League Training Programs
Supporting Public health Initiatives
Opened 600 smoking cessation clinics in 2010
Partnership with Max Health care.
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EMERGING MARKETS
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OPPORTUNITIES FOR INNOVATION IN EMERGING MARKETS
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ACQUISITION OF WYETH
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PFIZER’S SHIFT IN SEGMENTS
BEFORE 2014
1. Primary Care;
2. Specialty Care and Oncology;
3. Established Products and Emerging Markets;
4. Consumer Healthcare.
AFTER 2014
1.Global Innovative Pharmaceutical business (GIP);
2.Global Vaccines, Oncology and Consumer Healthcare business(VOC)
3.Global Established Pharmaceutical business (GEP).
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EXTERNAL DRIVERS
Global Pricing Pressure
Foreign Exchange Risk
Threats of new entrants
Suppliers bargaining power
Buyers bargaining power
Rivalry of competitors
Threats of product substitute
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Pfizer Organizational Structure
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Pfizer Organisation Structure
Established 1st International division in 1950
Established offices, subsidiaries and partnerships all over the world
Entry strategy was based on wholly owned subsidiaries and Jointpartnerships.
Divided world in 4 regions( Europe, West, Middle east & far east) placedRegional director in NY HQ.
Subsidiary Autonomy
Timely decision making with reduced dependence on HQ
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Pfizer Organisation Structure
Transformed from Manufacturing in 1990s to Research based Pharma Co.
In 2003, Geocentric Approach
Implemented standards that were universal and local to evaluate &Control all aspects.
Intended to measure performance both at HQ and each subsidiaries
Multidirectional Flow of Knowledge between HQ & subsidiaries andAmong Subsidiaries.
Transnational Firm
Centralization of firm
Resource Concentration( labour and capital) located in foreign.
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Pfizer Organisation Structure
Product Offerings
Human healthcare
Consumer healthcare
Animal healthcare
Divisions
Pfizer Global Research & Development
Pfizer Global Pharmaceuticals
Pfizer Global Manufacturing
Pfizer Animal Health
Pfizer Consumer Healthcare
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Pfizer Organisation Structure
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Pfizer Organisation Structure
HQ monitored divisions to align their activities to corporate strategy.
Pfizer centralized strategic responsibility of firm but decentralizedOperational responsibility to divisions and subsidiaries.
Used mix rules approach and market approach to control corporateactivities.
Interdependence: Integrated Network structure
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Pfizer Organisational Structure
Plans to segregate commercial operations into 3 business segments: Two innovative business
Includes Product across multiple therapeutic areas. Other includes vaccines, oncology and consumer healthcare Operate as separate global business with different Market Approach
One value business line Led by Value Products Group Provide lower cost treatment and include cash flow products
Reorganisation will provide Enhanced ability to respond to market dynamics Greater visibility and focus Distinctive capabilities to deliver to patents and shareholders.
“ Transition from Current Emerging Markets Organisation to regional structure”
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Pfizer Functional Area
Human Resources
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Pfizer HRM
Top Leadership views HR department as central to achieve business results
HR team focussed on planning for mergers, acquisitions and divestitures.
Partner with a global cross-functional HR team to develop integration andexecute plans
Represent the M&A HR team on cross-functional teams andinterdependencies.
Pfizer has adopted “ Investment in People philosophy”
Attract the best talent
Build an environment that retains
Invest in development
Pfizer’s value includes integrity, innovation, respect for people , customerfocus, teamwork, leadership, performance and community.
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HRM Role in Merger Integration
Warner-Lambert acquisition in 2000 and merger integration process atPGRD.
To integrate and align cultures, systems , structure and processes.
Managing potential redundancy in staffing and research projects duringbudgetary decisions.
Retain Key talent by reviewing staff performance and commitment.
Merger of Pfizer Animal health group and SmithKline Beecham
Used In house Knowledge to guide thinking.
Solid communication tactics and involvement of staff in planning andrecommending integration strategies with respect to culture, programs,systems, structure, and processes.
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HRM challenges
Cash and stock merger & Acquisition of Wyeth by Pfizer in 2009 case
Overall company size has declined by about 5 percent this year .
Client was quite concerned that the company lost top talent. Moreover, 25percent of its workforce was on retirement age.
HR programs came into play to effectively manage talent.
For Merger integration
Challenge to integrate the best of both the organisations.
Balance b/w consulting everybody and making decisions that moveorganisation forward.
Need in complex and high speed organisation
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PFIZER FINANCIAL ASPECTS
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Revenue Growth Ratio
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-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
20004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US
D M
il
YEARS
Revenue Growth Ratio (%)
ROA, ROI, ROE
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0
10
20
30
40
50
60
70
80
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
%
Years
Return on Assets %
Return on Invested Capital %
Return on Equity %
Net Profit Margin
33
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
%
Years
Net Profit Margin
Debt - Equity Ratio
34
0
0.1
0.2
0.3
0.4
0.5
0.6
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
%
Years
Debt/Equity
Current Ratio
35
0
0.5
1
1.5
2
2.5
3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Tim
es
Years
Current Ratio
INDUSTRY CHALLENGE
High fixed costs and long –lead time
Discovering and developing a new medicine takes atleast 12 years and anaverage cost of more than $1B(including cost of unsuccessful compounds)
Cost drivers for the innovative pharmaceuticals:R&D and SG&A account forapprox.45% of revenue
Wave of patent expiration
Slow down in product introductions
Increasing pricing pressure
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Growth in demand is fuelled by:
Aging population ,lengthening of average lifeexpectancy and rising incidence of chronicdisease
New diseases-Although impossible to predict,surfacing of new diseases will trigger demand
Demand in emerging markets- increasingstandard of living & improving healthcaresystems globally
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SWOT
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STRENGTH• Strong sales and
marketing infrastructure• Strong R&D departments• R&D innovation with
abroad therapeutic coverage
• Existing patent protection for a number of years on key products
WEAKNESS• Over reliance on Lipitor
franchise• Very limited
penetration of biologics market
• Discontinuation of products in the latter stages of development
• Co-marketing agreements can limit Pfizer’s global presence
SWOT
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THREAT• Lipitor’s patent
expiration in 2011• Further large scale M&A
activity could further decline Pfizer’s profitability
• Increased competition for core products
• The new economic potential of emergent china, India and completion in diverse regional markets
OPPORTUNITIES• Restricting strategy
designed to cut costs and create a leaner company
• Funding available to facilitate product/company
• Biological market expansion
• Decreasing development time through favourable R&D collaborations and internal efforts
Recommendations Emerging markets outside of north America,Europe and japan, are now
increasingly attractive for low-cost manufacturing and clinical trials
The emerging market opportunities include large population sizes and unmetmedical need,growing economies.
Targeting new markets
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Src: https://www.google.ae/?gfe_rd=cr&ei=Dd1LVMn6FseH8QeQwIGACw#q=pfizer
CONCLUSION
Despite sound financial results, Pfizermarket cap outperforms its competitors
Pfizer has a clear focus on emergingmarkets
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THANK YOU…
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