AN INTRODUCTION TO PFIZERPfizer Inc, founded in 1849, is dedicated to better health and greater access to healthcare for people and their valued animals. Our purpose is helping people live longer, healthier, happier lives. Our route to that purpose is through discovering and developing breakthrough medicines; providing information on prevention, wellness, and treatment; consistent high-quality manufacturing of medicines, consumer products; and global leadership in corporate responsibility. Every day we help 38 million patients, employ more than 100,000 colleagues, utilize the skills of more than 12,000 medical researchers, and work in partnership with governments, individuals, and other payers for healthcare to treat and prevent illnesses—adding both years to life, and life to years.

Pfizer is a research-based global pharmaceutical company. Pfizer discovers, develops, manufacturers and markets leading prescription medicines for humans and animals, as well as many of the world’s best-known over-the-counter medicines and consumer healthcare products.

Pfizer operates through five distinct divisions:

1. Pfizer Global Research & Development – PGRDPGRD is dedicated to drug discovery and to the development of medicines ready for the market.

2. Pfizer Global Manufacturing – PGMPGM is the manufacturing and largest division of Pfizer Inc. PGM supports our global manufacturing and distribution of Pfizer products.

3. Pfizer Global Pharmaceuticals – PGPPGP markets a wide range of prescription-only medicines and consists of all the commercial departments responsible for supporting the business.

4. Pfizer Animal Health – PAHPAH provides some of the most innovative and successful medicines for companion animals and livestock.

5. Pfizer Consumer Health Products Company – PCHPCH is responsible for the sales and marketing of all consumer healthcare products, over-the-counter medicines, and other health related and personal care products.

The company produces the impotence treatment Viagra, cholesterol lowering Lipitor and, for high blood pressure and angina, Norvasc. The animal division produces treatment both for livestock and pets. The company's consumer division produces the consumer drugs Listerine, Certs, Dentyne. Pfizer engages in international business both through their subsidiaries and distributors. The company's headquarters are located in New York, US.HISTORY

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1849 - 1899In 1849 cousins Charles Pfizer and Charles Erhardt founded Charles Pfizer & Company in a red brick building in Brooklyn, NY.

1900 – 1950The new century brought prosperity to Pfizer. The pioneering of the mass production of citric acid from sugar through mold fermentation fueled growth for years.

1951 – 1999The second half of the 1900's saw intense research and great successes for Pfizer.

2000After successfully merging with Warner-Lambert and Pharmacia to create the world's fastest-growing major pharmaceutical company, Pfizer continues its mission to become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live.

2001 In June 2001, Hank McKinnell announces a new mission for Pfizer—to

become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live. In July, he announces a commitment to fund the building of a regional treatment and training center on the campus of Makerere University in Kampala, Uganda as part of the Academic Alliance for AIDS Care and Prevention.

Pfizer launches Geodon® (ziprasidone hydrochloride), a new antipsychotic for the treatment of schizophrenia.

2003 Pfizer Inc and Pharmacia Corporation combine operations, bringing together

two of the world's fastest-growing and most innovative companies Pfizer launches Relpax® (eletriptan HBr), a medication developed specifically

for the treatment of migraines.

2004Caduet® (amlodipine besylate and atorvastatin calcium), the first single pill that treats both high blood pressure and high cholesterol, is launched.

2005Pfizer launches Lyrica® (pregabalin), the first treatment approved by the U.S. Food and Drug Administration to treat two distinct forms of neuropathic pain associated with diabetic peripheral neuropathy (DPN), postherpetic neuralgia (PHN) and adjunctive treatment of partial onset

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seizures in adults with epilepsy.

2006 Pfizer's roster of outstanding drugs grows with the launch of Sutent (sunitinib

malate), a new, oral, multikinase inhibitor to treat patients with metastatic renal cell carcinoma (mRCC), or advanced kidney cancer, and gastrointestinal stromal tumor (GIST) after disease progression on, or intolerance to, imatinib mesylate.

Pfizer launches Eraxis (anidulafungin) , a new medicine to treat certain infections caused by Candida, a yeast-like fungus that can cause serious infections in hospitalized patients or patients with compromised immune systems.

Exubera (insulin human [rDNA origin]) Inhalation Powder, the first diabetes treatment for adults with type 1 and type 2 diabetes that can be inhaled, is launched by Pfizer.

Chantix (varenicline) , a prescription medicine to help adults stop smoking, is launched by Pfizer.

COMPANY PROFILECEO (Pfizer Inc., New York, USA):      Henry A. McKinnell, Ph. D.

Country Manager Pakistan:                 Iqbal Bengali

Head Office in Pakistan:                     12 - Dockyard Road, West Wharf, Khi.

Manufacturing Facilities in Pakistan:  Karachi and Islamabad.

Subsidiaries of Pfizer Inc., USA:          Pfizer Laboratories Limited, Pakistan

Parke, Davis & Company Limited

Pharmacia Pakistan Limited

Website Address:                                 http://www.pfizer.com.pk

Key Pfizer Pharmaceutical Products:

Aromasin ® Caduet ®

Relpax ® Revatio ®

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Camptosar®Celebrex ® Chantix ® Detrol/Detrol Exubera ® Genotropin®Lipitor ® Lyrica ® Norvasc ®

Spiriva ® Sutent ® Vfend ® Viagra ® Xalatan/Xalacom ® Zmax ® Zoloft ® Zyrtec ® Zyvox ®

Key Pfizer Consumer Health Care Products:

Benadryl®Cortizone®Desitin®Listerine®

Lubriderm®Rolaids®Sudafed®Visine®

Key Pfizer Animal Health Products:

Clavamox®/Synulox®Equimax®Naxcel®/Excenel®Rimadyl®Dectomax®Respisure®/Stellamune®Revolution®/Stronghold®

CORPORATE PHILOSOPHY

“At Pfizer, the importance of creating an inclusive environment where diversity of background, thought and experience is practiced and valued. Our policies reflect that philosophy by mandating equal treatment for all employees globally without regard to sexual orientation, gender identity or gender expression. So too does our recognition of same-sex domestic partners for benefits ranging from medical coverage to adoption assistance as well as our thriving LGBT networking groups, which are involved with many charitable and educational activities both within Pfizer and in their local communities. Pfizer’s score of 100% for the Human Rights Campaign Corporate Equality Index for the second consecutive year reflects our active commitment to attracting, developing and retaining the most talented workforce available.”

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VISION STATEMENT

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“TO BE BEYOND NUMBER 1”

“BY WORKING TOGETHER WITH

OTHERS, WE CAN DO MORE GOOD FOR MORE

PEOPLE THAN ANY OTHER COMPANY ON

THE PLANET."

PFIZER MISSION STATEMENT

Evaluating PFIZER’S mission statement on 9 ElementsA good mission statement should comprise of the following elements:

Customers Products and services Market Technology Survival, growth & profit Philosophy

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“WE WILL BECOME THE WORLD’S MOST VALUED COMPANY TO

PATIENTS, CUSTOMERS, COLLEAGUES, INVESTORS,

BUSINESS PARTNERS AND THE COMMUNITIES WHERE WE WORK

AND LIVE”

Self-concept Concern for public image Concern for employee

The three features missing in Pfizer’s mission statement are Products/services Technology Concern for survival and growth Concern for employees

RECOMMENDED MISSION STATEMENT

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“WE BELIEVE OUR FIRST RESPONSIBILITY IS TO THE DOCTORS, NURSES AND PATIENTS ALONG WITH THE INSTITUTIONS WHO USE OUR PHARMACEUTICAL PRODUCTS. WE ARE

DEDICATED TO THE TOTAL SUCCESS OF PFIZER AS A WORLDWIDE COMPETITOR THROUGH THE EFFECTIVE USE OF LATEST TECHNOLOGY. IN THIS RESPECT THE

COMPANY WILL CONDUCT ITS OPERATIONS PRUDENTLY AND WILL PROVIDE THE PROFITS AND GROWTH, WHICH WILL ASSURE PFIZER’S ULTIMATE SUCCESS. WE WILL ACHIEVE

CORPORATE SUCCESS THROUGH A FIRM COMMITMENT TO PROVIDE CUSTOMERS HIGH QUALITY PRODUCT TO THEIR ULTIMATE SATISFACTION. WE WILL VIGOROUSLY PROMOTE

AND SAFE GUARD THE INTEREST OF OUR EMPLOYEES, OUR SHAREHOLDERS, OUR

SUPPLIERS AND ALL OUR OTHER BUSINESS ASSOCIATES. WE SHARE OUR OBLIGATION TOWARDS THE WORLD IN THE PROTECTION OF THE LIFE, HUMANITY AND ENVIRONMENT.”

PHARMACEUTICAL INDUSTRY IN PAKISTAN

The pharmaceutical industry of Pakistan comprises of over 400 manufacturing units including 31 multinationals, besides 10,000 retail chemists, 6,000 drug wholesaler/distributors and about 1,500 importers. Total sales of Pharmaceutical products, both locally manufactured and imported, in a year (from march 03 to march 04) was reported Rs. 60 billion1, out of which 55% sales ( Rs.33 billion) comes from multi national companies while remaining is distributed among local pharmaceutical companies of Pakistan.

INDUSTRY HISTORY The foundation of the pharmaceutical industry of Pakistan was formally laid in 1950 with the establishment of local subsidiaries of foreign firms and formulation of imported raw material based medicines by local entrepreneurs. By 1980, 170 pharmaceutical companies were set up in the country of which 150 were local companies and 20 were multinational firms. The industry was able to attract considerable investments as more firms and local entrepreneurs entered the industry due to its high profitability and prospects for growth.

INDUSTRY STRUCTURE 2 The pharmaceutical industry of Pakistan is a highly fragmented industry. The Multinational companies in Pakistan hold 55% of the share in the market while the local manufacturers hold the rest, the table below shows the top 15 pharmaceutical companies in Pakistan, along with their annual sale and market share.

1 Source: International Medical Statistics.2 International Medical Statistics

2

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COMPANY’S MARKET SHARES

S.NO

COMPANY SALES (DEC 04-05)

MARKET SHARE

RS.

1. GSK 7,987,750,135 13.20%

2. Abbott 2,904,640,250 4.80%

3. Aventis 2,699,991,179 4.46%

4. Novartis 2,268,555,782 3.75%

5. Pfizer Upjohn 1,861,564,832 3.08%

6. Merck Marker 1,834,187,026 3.03%

7. Wyeth 1,442,285,909 2.38%

8. Roche 1,356,600,371 2.24%

10. Bristol Myers 1,250,593,204 2.07%

11. Parke Davis 1,180,453,290 1.95%

12. Merck Sharp Dohme 1,143,787,197 1.89%

13. Nestle 1,062,838,419 1.76%

14. AGP 988,883,618 1.63%

15. Knoll 975,283,711 1.61%

16. Searle 957,283,711 1.58% 17. Others 29,364,541,868 48.89%Total 60,536,968,907 100%

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MACROENVIRONMENT ANALYSIS AND INDUSTRY ATTRACTIVENESS

Analysis of the Industry Using Michael Porter’s Five Competitive Forces

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IndustryCompetitorsRivalry AmongExisting Firms

Substitutes

Hi

High

ModeraBuyers

Lo

PotentialEntrants

Suppliers

High

THREAT OF NEW ENTRANTS

Entry in Pharmaceutical industry of International standard require high level of market understanding and technological know how it needs all in one skill, knowledge and abilities of the employees and advanced manufacturing and laboratory system which needs a large sum of investment but in Pakistan the situation is quite different because of Government’s inclination towards National pharmaceutical industry and corruption in providing licenses to them.

BUYERS

The prices of medicines are fixed and it is an emergency good people are bound to buy them for their cure from disease or prevention so there is no bargaining power of buyers in pharmaceutical industry.

SUPPLIERS

Pharmaceutical industry has various suppliers of raw materials and packaging. Glass industry is one of the major suppliers of the pharmaceutical industry; agriculture sector is also required for supply of the plants to get some extracts from them, biochemical industry other packaging materials like aluminum, paper, and plastics.

SUBSTITUTES

There are substitutes available in form of herbal and homeopathic medicines and various house hold cures.

EXISTING COMPETITORS

The competitors in pharmaceutical industry are all those who have extensive knowledge about there products and are manufacturing high quality medicines. In terms of generic medicines industries face a tough competition.

THREAT OF NEW ENTRANTS

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CRITICAL FACTORS YES(+)

NO(-)

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1) Do large firms have a cost or performance advantage in your segment of the industry?

√

2) Are there any proprietary differences in your industry? √3) Are there any established brand identities in your industry? √4) Do your customers incur any significant costs in switching suppliers?

√

5) Is a lot of capital involved to enter your industry? √6) Is serviceable used equipment expensive? √7) Does the newcomer to your industry face difficulty in accessing distribution channels?

√

8) Does experience help you to continuously lower cost? √9) Does the newcomer have any problem in obtaining the necessary skilled people, materials or supplies?

√

10) Does your product or service have any proprietary features that give you lower costs?

√

11) Are there any licenses, insurance or qualifications that are difficult to obtain? √12) Can the newcomer expect strong relation on entering the market? √

Low Moderate High

There is high threat of new entrant because of government’s favorable policy for the local pharmaceutical firm. Most of the new companies do not even have the valid license they can easily get it through bribery or there influences.

BARGAINING POWER OF BUYERS

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CRITICAL FACTORS YES(+)

NO(-)

1) Are there a large number of buyers relative to the number of firms in the business?

√

2) Do you have a large number of customers, each with relative small purchases?

√

3) Does the customer face any significant costs in switching suppliers? √

4) Does the buyer need a lot of important information? √

5) Is the buyer aware of the need for additional information? √

6) Is there any thing that prevents your customers from taking your function in house?

√

7) Your customers are not highly sensitive to price? √

8) Your product is unique to some degree or has accepted branding? √

9) Your customers’ business is profitable? √

10) You provide incentives to the decision makers? √

|Low Moderate Strong

Customers are bound to buy pharmaceutical products due to their sensitive nature. Buyers are neither the decision makers nor they

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have required information or skills to take a decision. They have to rely upon the advice of their doctors.

Due to a lot of similar brands with little or no difference, buyers have acquired the power to buy the cheaper one and to reject the expensive one. But this power is simply not effective in brands with high differentiation.

There is a low bargaining power of buyers because the prices are controlled by government regulatory authorities and also change due to currency rates and inflation rates. Medicines are life savers which the customers are bound to buy for their wellbeing.

THREAT OF SUBSTITUTES

CRITICAL FACTORS YES(+)

NO(-)

1) Substitutes have performance limitations that do not completely off set their lower price. Or, their performance is not justified by their higher price?

√

2) The customer will incur costs in switching to substitutes

√

3) Your customer has no real substitute

√

4) Your customer is not likely to substitute?

√

|Low Moderate Strong

There are a lot of generic products emerging in the industry lowering the overall profitability of the industry. Availability of the herbal and homeopathic medicines increases competition and the threat of

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substitutes. Increased competition for Viagra as its high cost encourages use of cheaper alternative treatments. Generic products are in rise, as people tend to spend lesser amount on allopathic medications because of slow economy. There is a moderate to strong threat of substitutes because of availability of the herbal and homeopathic medicines and customers’ illiteracy rate. They get the cure from these medicines along with this there has been a failure towards the government’s end to washout fake and smuggled medicines from the market.

BARGAINING POWER OF SUPPLIERSYES(+)

NO(-)

1) My inputs (materials, labor, supplies, services, etc) are standard rather than unique or differentiated?

√

2) I can switch between suppliers quickly and cheaply? √3) My suppliers would find it difficult to enter my business or my customers would find it difficult to perform any function in house?

√

4) I can substitute inputs readily? √

5) I have many potential suppliers? √

6) My business is important to my suppliers? √7) My cost of purchases has no significant influence on my overall costs?

√

Low Moderate Strong

There is moderate to low bargaining power of the suppliers because pharmaceutical industry have specialized suppliers and those suppliers are also dependent on the pharmaceutical industries for the well being of their business. The raw material which is supplied to the pharmaceutical companies like chemicals, glass, plastic etc also has

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regulated prices which are affected by the government policies and economical changes.

DETERMINANTS OF RIVALRY AMONG EXISTING COMPETITORS

CRITICAL FACTORS YES(+)

NO(-)

1) The industry is growing rapidly? √

2) The industry is not cyclical with intermitted over capacity? √3) The fixed costs of the business are relatively low portion of total costs √

4) There are significant product differences and brand identities between the competitors?

√

5) The competitors are diversified rather than specialized? √6) It would not be hard to get out of this business because there are no specialized skills and facilities or long term contract commitments, etc

√

7) My customers would incur significant costs in switching to a competitor?

√

8) My product is complex and requires a detailed understanding on the part of my customer?

√

9) My competitors are all of approximately the same size as I am? √

|Low Moderate Strong

There is a moderate to high competition among competitors in terms of brand equity because prices are regulated by government and

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political forces so they need to build strong consumer loyalty to remain in business.

MNCs are using their superior technology and research and development skills to introduce new products tailor made for specific target market needs, On the other hand, national companies are offering low prices and trying to outclass MNCs in a price war.

The rivalry is not only among national and multinational companies, National companies are against each other on battle field of cost management to offer lowest possible cost, same as; MNCs are striving to outclass each other through advanced products based upon research and technology.

OVERALL INDUSTRY RATINGS

FAVOURABLE MODERATE UNFAVOURABLEThreat Of New Entrants 4 1 7Bargaining Power Of Buyers

6 _ 4Threat Of Substitutes 3 _ 1Bargaining Power Of Supplier

4 1 2Intensity Of Rivalry Among Competitors

4 3 2TOTAL 21 5 16

PEST ANALYSISThe factors that affect any industry are:

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1. POLITICAL FACTORS: The government designed policies and laws for the operational functions of the pharmaceutical industry tax and trade laws etc.

2. ECONOMIC FACTORS: The ups and downs in the market prices, currency rates, currency exchange rates are the factors that influence the pharmaceutical industry.

3. SOCIAL FACTORS: People’s awareness about the importance of medicines there trend to get a cure for there diseases.

4. TECHNOLOGICAL FACTORS: The manufacturing and operational systems through which medicines are manufactured and processed. Technology in modern organizations is the know-how, the Equipment, the experience, the knowledge and skills that are required for better production and better service. Growth in R&D activities is an important factor affecting the industry.

POLITICAL FACTORSFollowing political factors are affecting the pharmaceutical industry:

Multilateral lawsAll the pharmaceutical industries have to comply with the rules that are formulated by WHO and Intellectual Property Rights (TRIPS). Along with that there is strong government influence in pricing strategy of the industry.

Political disturbanceLocal pharmaceutical industry also suffers because of the political disturbances in the country like strikes in both public and private sectors.

Legal factors

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Ministry of health’s strong regulations about the pharmaceutical industry for launching new medicine and changing the prices for the specific medicine has affected the profit margin of the industry.

Easy issuance of license to sell drugs to the local companies has increased the price competition in the industry there are 370 national pharmaceutical units while 30 MNCs.

Import DutyImport duty on the raw material for the medicine is quite high (35%) which increase the cost of manufacturing the medicine and strict regulation about the price increase inversely affect the profitability of the industry. Most of the import takes place from UK, Switzerland & India.

Pricing policiesIn Pakistan, government decides the price for pharmaceutical products, since the past 4 years government has not allowed increasing the prices of pharma products. This creates problem with profitability of products and keeps back companies to profit from their new innovative products

Strict government control over pricing has made many medicines uneconomical, with the result that they either become available only on the black market at inflated prices, or disappear completely. In this environment, manufacturers, both local and foreign-owned, have proved unable to generate the profits needed for capital investment. This is not helped by a regulatory system best described as rudimentary. There is virtually no public drug reimbursement or IP protection; patent law was officially tightened in December 2000, although the

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effectiveness of this has been questioned. In 2002, further changes were made, making Pakistan's IP laws even weaker Prices of medicines are officially controlled, although the government lacks the capacity to enforce its policies in this area. Some price rises have been allowed since 2000, but the current government shows little sign of enacting any serious reform of the pharmaceutical sector, preferring to allege profiteering on the part of the pharmaceutical industry.

Import LawAn import law allowing Indian-made drugs to enter the market was signed in June 2005, although after several months, not one permit has so far been issued.

ECONOMIC FACTORSA cost increase of 90% for pharmaceutical industry has arisen over the last five years generated by three factors - an inflation of 76%, a devaluation of Pakistani currency by 85% in relation to the U.S. Dollar, and an introduction of duties of 10% beginning June 1996.

Insufficient price increases which do not compensate for the cost increases for "Controlled" medicines, the price increase was only 21% in the last five years for "Decontrolled" medicines, and the price increase was only 29% in the last five years.

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SOCIAL FACTORS

Low human developmentLike homeopathic, and hakimi products, due to the fact that more than half of the population of Pakistan is poor and uneducated and they often resort to cheaper medicines used by their fore fathers.

Viagra RegistrationOne opportunity that company seeks is the registration of Viagra in Pakistan. Pakistani government has banned Viagra in Pakistan due to some ethical and religious reasons but Pfizer claims that except for in Pakistan Viagra is being sold in all Muslim countries including Saudi Arab. According to a WHO report, there are 25% spurious/counterfeit/substandard drugs in the under developed countries. About 10% on the whole world markets, including the developed countries have such medicines.

Self MedicationLow literacy rate cause self medication or going to the chemist for reference instead of doctor to save the cost.

TECHNOLOGICAL FACTORS

Pharmaceutical Products for incurable diseasesBy using its financial and human resources of Research and Development, Pfizer can make great contribution to the world by creating pharmaceutical products for AIDS, HIV and Cancer.

Research and Innovation

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Rapid technological advancement and the development of the new methods to cure diseases have affected the industry. New medicines for fatal diseases are the growing sector of the industry like Cancer drugs, Hepatitis drugs and vaccines, AIDS drugs, diabetes medicines etc.

Emerging Diseases

Now pharmaceutical industry after the coming of viruses like bird flu, anthrax, Dengue Virus is involved in extensive R&D to find the cure or vaccines for these diseases.

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EFFECT OF PEST ON PORTER’S FIVE FORCES

Factor and

Effect

Opportunity

or Threat

Buyer

Power

Supplier

Power

New

entry

Substitute Rivalry

Research and

Innovation

Opportunity Low Low Low High

Emerging

Diseases

Opportunity Low Low High High High

Pharmaceutical

Products for

incurable

diseases

Opportunity Low Low Low Low

Self Medication Threat High High High High

Viagra

Registration

Opportunity Low Low

Low human

development

Threat High High High High

ECONOMIC

FACTORS

Threat Low High High

Import Law Threat High Low High

Pricing policies Threat High Low Low High

Import Duty Threat Low High High

Legal factors Threat High High High High

Multilateral

laws

Opportunity High Low

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EXTERNAL FACTOR EVALUATION MATRIX

In the CPM it reflects clearly that GSK is highly competitive with 3.25, followed by ABOTT and PFIZER. The product quality of all the three companies is very strong. The market share of GSK (market leader), ABOTT, and PFIZER is 7%, 4% and 3.08% respectively.

(EFE)

KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

Opportunities1. Customers interest and

preference for buying foreign medicines rather than local medicines

.15 3 .45

2. Increased awareness about allopathic mode of medicine .08 3 .24

3. Pakistan has a population growth rate of 2.6% per annum. Higher population growth means that there would be a larger market available for the pharmaceutical industry.

.05 4 .20

4. Emerging diseases .12 3 .36

5. Acquisition of local companies .12 1 .12

6. Governments interest in having trade with India in medicines

0.05 2 .10

7. Allowing of TRIPS to have parallel trade on some generic medicines.

0.06 2 .12

Threats

1. Continued weakening of the PKR & fluid GOP policies will put pressure on profit

.10 2 .20

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margins & can impede sales

2. The sale of FAKE AND SMUGGLED MEDICINES at low prices

.06 3 .18

3. Economic and political fluctuations .09 2 .18

4. Use of herbal and homeopathic medicines .06 4 .24

5. Government inclination of encouraging more national pharmaceutical companies

.11 2 .22

6. Self – medication 0.05 3 .15

7. Strong brand name of major competitors such as GSK, ABBOTT.

0.06 3 .18

TOTAL 1.00 2.94

Interpretation of EFE Matrix

The Total Weighted Score of 2.94 in the External Factor Evaluation (EFE) Matrix denotes that Pfizer is responding in an average way to existing opportunities and threats in the Pharmaceutical Industry. In other words, Pfizer strategies are only ordinarily taking advantage of existing opportunities and somewhat minimizing the potential adverse effect of external threats.

The strategic signals Customer’s interest and preference for buying foreign medicines rather than local medicines Emerging diseases, Acquisition of local companies, Continued weakening of the PKR & fluid GOP policies will put pressure on profit margins & can impede sales, Government inclination of encouraging more national pharmaceutical companies) from the EFE are giving a clear picture of their opportunities and industry threats, on which Pfizer has started and should do more to increase their market share and revenues. By acquiring good strategies to achieve potential opportunities to reduce the effects of the threats Pfizer should adopt good strategies.

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MICRO-ENVIRONMENTAL ANALYSIS STRENGTHS AND WEAKNESSES STRENGTHS

1. A strong product portfolio

Pfizer has established itself as a global provider of innovative healthcare solutions, and rather than focusing on a small number of specialist therapeutic areas, Pfizer has, instead, concentrated on product innovation in any attractive therapy area, and its current portfolio and R&D pipeline reflect this. It has strengths in a number of therapeutic areas, and its size and strong market presence is sufficient to support this diversity.

Pfizer has seven blockbuster drugs, each with revenues exceeding $1B each year. Topping the list is Lipitor, a cholesterol reduction drug (Sales of $6.3B per year). The list continues: Norvasc, a calcium channel blocker for treatment of hypertension and angina ($3.7B); Zoloft for treating depression and panic attacks ($2.4B); Neurontin for epilepsy and neuropathic pain ($1.7B); Viagra ($1.6B); Zithromax, an oral and injectable liquid azalide antibiotic ($1.5B); and Diflucan, also an injectable and oral broad-spectrum antifungal medication ($1.1B).

2. Research & Development

With a 2006 estimated Pfizer budget of $7.8 billion in research & development (R&D), Pfizer boasts the industry's largest pharmaceutical R & D organization: Pfizer Global Research and Development. Pfizer's search for new treatments spans hundreds of research projects across 11 therapeutic areas - more than any other company. Medicines library includes approximately 2 million compounds, and our pipeline holds more than 160 projects in development and over 300 projects in discovery research in 11 therapeutic areas.

3. Strong Marketing

Pfizer has a global marketing strength, which has made it a very attractive marketing partner for, smaller or less experienced

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companies. The company's recognized marketing strength will mean that opportunities for promising products are likely to be discussed with Pfizer, giving it access to an array of promising compounds for sale on the international market.

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. Through co-promotion and licensing agreements, Pfizer promotes and markets such highly promising products as Celebrex, Bextra, Aricept, and so on with alliance partners

4. Mergers , Acquisitions and Collaborations

One of the strengths of Pfizer is its ability and strategy of mergers, collaborations and acquisitions. The recent and most important such act was acquisition of Pharmacia On July 15, 2002. Pfizer with Pharmacia moved from fourth to first in Europe; from third to first in Japan; and from fifth to first in Latin America in pharmaceutical sales. Before the acquisition by Pfizer, Pharmacia merged with Upjohn. Pfizer had also acquired Parke Davis, making Pfizer the biggest Pharmaceutical Company in world.

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.

5. World’s largest Animal Health company

Pfizer’s animal health units market is one of the largest selling and broadest product lines in its field.

6. Social Responsive

Pfizer’s tradition of Philanthropic activities in making every community a better place to work and live like wise Helping the tsunami orphans, Teaching about vaccine preventable diseases and Women and children in health education program etc.

7. World’s largest selling medicine, Lipitor

Lipitor totaled Full-year sales of $12.2 billion reflected 12-percent growth over 2004. Lipitor totaled $3.4 billion in the fourth

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quarter, reflecting growth of 3 percent over the previous year's quarter, a difficult comparison in light of Lipitor's 23-percent revenue growth in the fourth quarter of 2004, exacerbated by four fewer business days in the 2005 quarter. Full-year sales of $12.2 billion reflected 12-percent growth over 2004.

8. Competent sales force

Pfizer has a competent and strong workforce reaching the customers needs. Majority of the sales revenue is generated by the efforts of the sales force.

WEAKNESSES

1. Decreasing market shareAfter 2003, Pfizer is facing a decline in the market share of pharmaceutical industry.

2. No internal supplier network Pfizer rely on the imports from limited suppliers, which are China, India, and Germany. This increases the import duties and thus the cost of the output.

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Internal Factor Evaluation Matrix (IFE)

Internal Analysis evaluates Strengths and Weaknesses in the functional area of Pfizer’s business and it also provide the basis for identifying and evaluating relationships among those functional areas. The strategy formulation tool used for Internal Analysis is called Internal Factor Evaluation (IFE).

Internal Factor Evaluation Matrix (IFE)

Key Internal Factors Weight

Rating

Weighted Score

Internal Strengths1.  A strong product portfolio 0.12 3 .36

2.  Strong Research and development Network 0.20 4 0.80

3. Strong Marketing 0.07 3 0.21

4. Mergers, Acquisitions and Collaborations 0.17 3 0.51

5.  World’s largest Animal Health company

0.12 4 0.48

6. Socially responsive 0.09 3 0.27

7. World’s largest selling medicine, Lipitor 0.09 4 0.36

Internal Weaknesses

1. Decreasing market share 0.08 1 0.08

3.  No internal supplier network 0.06 2 0.12

TOTAL 1.00 3.19

Interpretation of IFE Matrix

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The Total Weighted Score of 3.19 in Internal Factor Evaluation (IFE) Matrix indicates that Pfizer is above average in its overall internal strength. The major strengths are strong Research and Development Network, largest animal health company and mergers and acquisitions whereas the major weakness is decreasing market share.

The strategic signals from the IFE indicates as follows: Strong Research and development Network Mergers, Acquisitions and Collaborations World’s largest Animal Health Company Decreasing market share

These indicators could be utilized for improvement of there strategic implementation as, by strong RD Global using as a cousion in Pakistan, Pfizer can develop a strong RD division to have more research base medicines to be produced according to the current needs and emerging dieses of Pakistan.

Pfizer can also utilize their skills of mergers and acquisitions (as previously done with Pak Davis, which made them very strong globally) in order to retain its market share and have strong grip in Pakistan by acquiring those local companies that have a powerful supplier and distributions which will help it in integration.

As Pfizer is world’s largest animal health care research base institute, they can utilize there this strength over their weaknesses of decreasing market share, by catering more products in animal sectors, which will also help them, as Pakistan is already an agricultural state requiring more animal health care products.

1 COMPANY AND COMPETITOR ANALYSIS

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5.1 KEY SUCCESS FACTORS

After analyzing the Pharmaceutical industry (issues) and the comparative analysis we believe that the main factors which contribute to the success are:

Marketing Product Quality Research and Development skills New geographical regions Financial Position Distribution network Market Share Mergers and acquisitions Price competitiveness

COMPETITIVE PROFILE MATRIX

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CPM

PFIZER GSK ABBOTT

CRITICAL SUCCESS FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

Marketing 0.05 3 0.15 4 0.20 4 0.20

ProductQuality

0.15 4 0.6 4 0.6 4 0.6

R&D Skills 0.1 4 0.60 4 0.60 3 0.45

NewGeographical

Regions

0.05 3 0.15 3 0.10 2 0.10

Financial Position

0.10 2 0.4 4 0.3 3 0.4

DistributionNetwork

0.10 3 0.4 3 0.3 3 0.3

Market Share 0.1 2 0.52 4 0.39 3 0.26

Mergers & Acquisitions

0.075 2 0.15 3 0.225 3 0.225

Price Competitiveness

0.075 3 0.225 3 0.225 3 0.225

TOTAL 1.0 2.89 3.25 2.95

Note: The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 = major strength.

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Interpretation of CPM

According to the competitive profile matrix as per pharmaceutical industry in Pakistan, the evaluation of key success factors led the MNC’s in order that GSK as being the leader in Pakistan lies with 3.25 and Abbott with 2.95, while Pfizer is lagging behind with a 2.89.

According to the market share GSK has the 7% and Abbott ahs 3.4% , while Pfizer has only the 3.09 v% from a 15% population of Pakistan using pharmaceuticals.

Working with the above-mentioned success factors, as the competitors are working, Pfizer should also consider doing some good practices.

Such as GSK and Abbot recently installed a MIS system in order to cover their suppliers, byres, distributors, and retailers more in a systematic way. Therefore they should also work hard to achieve strength in the industry success factors.

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TOWS MATRIXStrengths-SS1. A strong product portfolioS2. Strong Research and development NetworkS3. S4.Marketing and Promotional skills/ activities.S5. Strong management teamS6. Largest Market Share globallyS7. Mergers, Acquisitions and Collaborations

Weaknesses-WW1. No clear Mission StatementW2.  Discontinuation of products

Opportunities-OO1. Customers interest and preference for buying foreign medicines rather than local medicinesO2. Increased awareness about allopathic mode of medicineO3. Pakistan has a population growth rate of 2.6% per annum. Higher population growth means that there would be a larger market available for the pharmaceutical industry.O4. Emerging diseasesO5. Acquisition of local companies O6. Governments interest in having trade with India in medicinesO7. Allowing of TRIPS to have parallel trade on some generic medicines.

SO- Strategies1. Strengthen the product portfolio by catering the needs of HIV and Cancer patients (S1, O5)2. Increase the market share by acquiring local companies (S7, S9, O4)3. Availability of technical know how and trained man power for growth (S5, O1, O3)

WO- Strategies1. Focus the untapped markets of HIV and Cancer to gain the first Mover Advantage (W4, O5)2. Decrease the development time to enter into new geographic markets. (W4, O2, O3)3.Can reduce overall unit cost through zero rated tariff regime of WTO (W6, O1)

Threats-TT1. Continued weakening of the PKR & fluid GOP policies will put pressure on profit margins & can impede salesT2. Patent protectionT3. Threat from substitutesT4. Increased competition for Viagra and CelebrexT5. Growing Bargaining power of Suppliers and Buyers.

ST- Strategies1. Backward Integration (S3, S7, S9, T5)2. Gain market advantage by introducing Celebrex and Viagra in Pakistan. (S1, S4, S5, S6, T4)3. Create brand loyalty (S4, S8, S10, T3).

WT- Strategies1. Reduce dependence on Lipitor by launching Viagra and Celebrex (W5, T4)2. Decrease over all unit cost by Backward/ Forward Integration system. (W6, T5)3. Decrease overall development and launching time to gain the First Mover Advantage (W4, W7, T3).

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SPACE MATRIX

FINANCIAL STRENGTH Ratings

leverage liquidity Net income

4.04.03.011.0

INDUSTRY STRENGTH

Growth Potential (increasing demand). Capital Intensity (Requirement high) Ease of entry into the market Capacity utilization

4.04.01.06.015.0

ENVIRONMENTAL STABILITY

Competitive Pressure is High Less-developed countries are experiencing high inflation

and political instability. Government regulation has created price stability

throughout the industry.

Demand is variable because of existence of different diseases

-1.0-2.0-2.0-2.0-7.0

COMPETITIVE ADVANTAGE

Market share Research and Development

Control over suppliers and buyers

-3.0-2.0-5.0-10.0

INTERPRETATION

ES Average is -7.0 ÷ 4 = -1.75 IS Average is + 15.0 ÷ 4 = 3.75 CA Average is -10.0 ÷ 4 = -2.5 FS Average is  +12.0 ÷ 4 = 3.0 Directional Vector Coordinates:

x-axis: -2.5 + (3.75) = +1.25y-axis: -1.75 + (3.0)= +1.25

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Pfizer should pursue Aggressive Strategies. That is Pfizer is in good position to use its internal strengths to take advantage of external opportunities, over come internal weaknesses and avoid external threats. Therefore, Market Penetration, Market Development, Product Development, Backward/ Forward Integration, horizontal integration can be feasible strategies, depending upon the specific circumstances that face the firm.

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PORTFOLIO ANALYSIS

The BCG Matrix

SBUs

Relative market share

in %Total market

size '000Consumer Health care 0.67% 2881Animal health 0.54% 332Pharma products 0.59% 154

For constructing the BCG matrix, five Strategic Business Units of PFIZER have been considered as follows:

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Market GrowthIndustry Sales (In %’s)

Cash Cow Dog

Star Question Mark

Relative Market Share

HIGH1.0

MEDIUM0.5

LOW0.0

Interpretation of BCG Matrix

According to the results of Boston Consulting Group (BCG) Matrix, Pharmaceutical Segment, the Star of Pfizer businesses lies in the 2nd quadrant of the matrix that represents organization best long-run opportunities for growth and profitability. And because it is the segment with high relative market share and a high industry growth rate it should receive substantial investment to maintain and strengthen the dominant position. Appropriate Strategies include: Forward, Backward, and Horizontal Integration; Market Penetration; Market Development; Product Development; and Joint Ventures.

Consumer Health Care Segment is in the 1st quadrant of Pfizer’s BCG Matrix i.e. it has a relatively low market share but yet compete in a high growth industry. Therefore the cashNeeds of this segment are high while cash generation is low. This business is called Question Mark because Pfizer must decide whether to strengthen it by pursuing an intensive strategy (Market Penetration, Market Development, or Product Development) or to sell it.

Balanced Business Scorecard

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The balance scorecard is a management system that helps organizations to clarify their vision and strategy and put them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results.

“The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”

The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

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Measurers of Balanced Business Scorecard applied at Pfizer Inc:

Financial MeasuresFinancialFinancial: How do we look to shareholders?: How do we look to shareholders?

The inventors do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority and managers will do whatever necessary to provide it. Will achieve Profitable growth within the targets of Growth in net margin annually, i.e. Yr 1: 50 % and Yr 2: 70% and will also achieve a target of Return on investment for shareholders.

Operational MeasuresCustomersCustomers: How do customers see us?: How do customers see us?

Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.

Internal processInternal process: What must we excel at?: What must we excel at?This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business are running, and whether its products conform to customer requirements.

Innovation and LearningInnovation and Learning: Can we continue to improve and create: Can we continue to improve and create value?value? This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode.

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Four dimensions of a learning organization

Organizational DesignLearning organizations are boundary less. People work in teams. Employees are sufficiently empowered to take their decisions (MBO).

Organizational CultureThe culture of a learning organization is based on strong mutual relationship. People feel like one community working for common objective. Every one cares for others. There is environment of mutual trust and respect.

Information Sharing In learning organization, the flow of information is open, timely, and accurate.

Leadership The leadership of learning organization has vision, where he wants to steer the organization. To achieve this objective he believes in collaboration with others.

BALANCED BUSINESS SCORECARD (PFIZER)

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THE LEARNING ORGANIZATION

Organizational Design Boundary less Teams Empowerment

Organizational Culture Strong Mutual

Relationship Sense of Community Caring Trust

Information Sharing Open Timely Accurate

Leadership Shared Vision Collaboration

OBJECTIVES MEASURES TARGETS INITIATIVES

FINANCIAL Profitable

growth Return on

investment for shareholders.

Growth in net Margin

ROI Ratio

Growth in net margin annually

Yr 1 50 %Yr 2 70%

Improving local market Pakistan

Improving profitability

CUSTOMER

Create value for customers to make differentiation from our competitors.

Create/ retain loyalty customer loyalty

Improving access to medicines

Through questionnaires

Percent of Service Level Agreements

International recognition by Global Reporting Initiative (GRI)

50 % increase in Doctor’s loyalty till 2007.

Communicating access for doctors through regional forums, meetings, and seminars

Perform Activities focused on education, public health, safety and improvement of the environment

INTERNAL

BUSINESS

PROCESS

Discovering and Developing New Medicines

Apply advanced science and technology in the manufacture of medicines to produce cost-effective, high-quality products

Present Global Health Fellows model (GHF)

Develop Corporate performance measurements

Percent of development project within effort estimates

20 new medicines for FDA approval till end of 2007.

Ensure that contract manufacturers and key suppliers have responsible environment, health and safety management related to production of materials for Pfizer

INNOVATION, LEARNING & GROWTH

Educate physician’s new prescription medicine prior to beginning TV and print advertising.

Employee efficiency for increase in productivity.

Skills,

To create local R&D department under the supervision of regional and then main headquarters

Expanding the focus of the to sustainable health solutions.

To create awareness about the effectiveness of allopathic medicines

Provide training for employees to most effectively work with NGOs in developing countries

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technologies, and corporate culture needed to support your strategy

and overcome the threat of fake and smuggled medicines.

Interpretation

The name “Balanced Scorecard” of Pfizer reflects the Balance between short- term and long-term objectives, financial and non-financial measures, lagging and leading indicators, external and internal performance perspectives. It proves a complete Balance revenue growth and production improvement, Differentiate your organization from competitors, Identify operational, customer-relationship, and innovation processes to support your customer and financial goals and they had, Define the skills, technologies, and corporate culture needed to support your strategy.

. STRATEGY EVALUATIONThe most important element of Pfizer’s management control process is evaluation. Evaluation of the sales force is an action undertaken to verify the success of selling program that is comparing planned and actual results, identifying reasons for variations and making appropriate changes in the sales goals and strategies. After the execution of any program by the company, it demands immediate feedback.

This feedback assists the managers to evaluate the performance of the employees. Through evaluation the managers are assured whether the program is designed and implemented properly or not.

A successful management control program promises the company a competent and able workforce. It spots individuals who are ready for promotion, salary increases or

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assignment to new territories and responsibilities, keeps sales job descriptions current and on target, provides evidence about salespersons, which should be eliminated.

Top sales executives design the evaluation plan at PFIZER because they have the most sales experience; they know the company, its products, and markets in the greatest detail. PFIZER believes that the program is only effective if the knowledge and the improvements meet the criterion. The evaluation process at PFIZER also includes a follow-up and as soon as the program shows positive results it indicates that the evaluation was done in an adequate manner.

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RECOMMENDATONS

The best strategies will be Mergers And Acquisitions with the local companies to strengthen the regional trade and product development by producing more innovative and differentiated products.

PFIZER should not change its strategy and should stick to the broader differentiation but at the same time it should work to maintain its position.

It should grab the opportunity of the regional trade this will help it to be present physically in the regions and it will also minimize the threat of the economic instability of the countries because then it will work more under the umbrella of international trade system like WTO and TRIPS.

It should also avail the opportunity of increasing customer needs by product development by Creating new directions in health and wellness such as skin care products, it should communicate doctors about its differentiated products. This will increase its sales and create its brand recognition.

Deliver more new medicines more quickly to patients, Drive our advantages in size, reach, and productivity, Build the performance potential of each colleague and Shape a positive environment for better healthcare. 10.

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1. Bibliography

http://www.pfizer.com.pk/Default.aspx?tabid=44

http://www.dcomoh.gov.pk/pharma/layoutplans.phpwww.dailytimes.com.pk/default.

www.patent.gov.pk/notification

http://www.pfizer.com/pfizer/main.jspCorporate citizenship report Pfizer 2005-2006

Main campus Pfizer Inc at Doc Yard

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