Introduction - Exploring Pfizer's Market Position and Management Strategies
Strategy constitutes one of the prime factors behind a successful business. Businesses of the modern world are influenced by various factors, for instance, globalisation and internal competition. Thus businesses nowadays are required to be unique, value-oriented, and innovative to sustain. Positional or organisation's positional strategy as a result receives the central position in managing a company. Strategically positioned, usually denotes the ability of any company to produce value-for-money products which are unique and innovative, and different from all other rivals in the same industry. The market that a particular company addresses must be carrying some defendable features as well, for instance, a better market position, fewer rivals available in the same industry, and many more. In this report, a case study of a pharmaceutical company named Pfizer will be taken into account to analyse its internal and external environment. The biotechnology and pharmaceutical company is taken for understanding the factor of its strategic management and how it appeals to the business in the global setting. The report will analyse the strategic position of Pfizer, by deploying various kinds of evaluating tools and frameworks. The report also focuses on the company's strategic standpoint and also its relationship with the other stakeholders of the company in the international market.
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The company that has been taken into consideration here is named Pfizer, a global pharmaceutical company with a world ranking at number two in the medicine industry. The company is known for its massive production of medicine named penicillin. "Miracle drug" is their creation which is also produced in huge amounts bringing popularity to the company. Currently, Pfizer is one of the most successful pharmaceutical enterprises and biotechnology centres in the whole world, generating a surging ninety-nine billion US dollars of revenue. The company has its stores spread across the globe, with several seventy-nine thousand employees working all over. The company has been in establishment since 1849, and in this report, a detailed analysis will be made to address the internal and external environment of Pfizer which is dedicated to providing success to the company. Emphasis will also be made on the factors that Pfizer takes into account for its strategic management in the global market with its relation with the shareholders (Nurwulandari, Hasanudin, and Artardo, 2021).
For achieving proper analysis a few frameworks are required for references. To understand Pfizer's positional analysis by referring to the internal factors then, the SWOT model constitutes a justified framework. The SWOT model is deployed for extracting a holistic understanding of a company's strengths, weaknesses, opportunities, and threats.
Strengths: The biotechnology and pharmaceutical company, Pfizer, has quite a few strengths, for instance, its leading position in the medicinal market, its service to the people during the pandemic which increased its brand value, a strong management team, and a set of skilled knowledgeable workers. The current CEO of the company has high educational qualifications in financial accounting and also in chemical engineering, by which the leader strengthens the company in R&D and financial strategies. The management also plans strategies like Global Innovative Pharma or GIP and Global established Pharma or GEP, policies and invests heavily in the research and development areas, which is the most productive part of the company manufacturing top-class drugs to cure diseases (Nurwulandari, Hasanudin, and Artardo, 2021). Pfizer's medicines are available at a lower price which controls the supply of drugs to the majority of developing nations. Pfizer's employees are all skilled either in medicine, chemical engineering, or business and they all have a greater sense of management. Employees here are motivated to work in a team, with direct directions either from the managers or from the directors themselves, thus keeping the team performance high. Pfizer's strategic positioning is solidified due to these reasons of strengths.
Weaknesses: Despite the success of the company, there is a huge loss in the selling of medicinal drugs, and also a recurring loss emerging from one of the most well-equipped laboratories in the world. A few issues can be identified, and firstly the issue can be certain political policies. There have been certain political regulations that hampered the reach of the company to the market by distorting its manufacturing abilities. The company since its foundation has used M&A as aggressively as possible and it is one of the reasons behind the company's success (Benzaghta et al., 2021). However, recently, there have been clear dissatisfactory results in which Pfizer has not been able to bring any international medicinal enterprise into the headquarters to collaborate.
Opportunities: Pfizer has quite a lot of opportunities for the company as it follows an aggressive method of merging and acquisitions in the world pharmaceutical industry. Even though the company is named global, for its distribution of drugs, it has greater opportunities in the market of developing nations as it manufactures cheap but effective medicinal drugs. The opportunities that come from the internal environment is a planned HR management, and Pfizer has been recruiting greater talents through their Explorer Training Program in which new employees were not only recruited but were given training on leadership, aims, and purpose (Nurwulandari, Hasanudin, and Artardo, 2021).
Figure 3: Pfizer’s Revenue Chart
Threats: The major threats to the company come from external sources, for instance, other national and international drug manufacturers like, MRK, Johnson & Johnson, Novartis, and many more. Another internal issue that might create a threat is the steady decline of Pfizer's revenue over the last five years. The revenue generation has been lagging as short-term investments declined. However, despite all the weaknesses and threats, it can be seen that the company has made a distinctive position for itself in the pharmaceutical industry. The strategic positioning is analysed by SWOT, then it can be concluded that the internal environment of Pfizer is full of potentiality and growth (Benzaghta et al., 2021).
External environment: PESTLE
Pestle forms another framework by which this report will study the external environment of Pfizer to analyse its strategic positioning. In this framework, consideration will be made of the political, economic, social, technological, legal, and environmental factors of the nation in which a company fiction as all these points heavily determine the success and failure of the company.
Political: Pfizer has its headquarters in the USA, and one of the major positive points about the political situation there is stability. The governance system is systematised where FDA regulates the manufacturing of medicinal products, whereas, the Office of Pharmaceutical Company overviews the production process in greater detail. The NDC, a government agency, and Affordable Care Act also oversee the manufacturing process. Through these political opportunities, Pfizer eliminates all the possibilities of ill manufacturing of medicines (Ventura, 2021).
Economic: Even though the company for the last five years has been suffering quite a lot in generating revenues, with the mass production of vaccines during the pandemic times for national and international markets Pfizer has shown the ability to perform with sound economic growth. However, with a steady decline in revenue, the company has halved its investment in its R&D sector, which is thought to be the most important part of Pfizer (Dalirazar, and Sabzi, 2020.).
Social: American society is aware of the requirement for medicine and thus it creates a great market for demanding consumers. The aware consumers in turn require government intervention by which the production of the drugs by not only Pfizer but also other companies will be managed. Drug pricing and scandals related to it constitutes a great social issue that has been addressed by the government (Mahase, 2020).
Figure 4: PESTLE Analysis Framework
Technological: The company must expand to nations that are technologically advanced as it will ensure the mass production of the medicines as per the strategic guideline of Pfizer. Pfizer, itself has an innovative and creative team and with the help of the government has received quality technological advancements. The company has invested heavily in its R&D, by which they produce "miracle drugs" which is the main reason behind its success (Badiani et al., 2020).
Legal: The government has been aggressively intervening in the manufacturing sector of the pharmaceutical companies and for that various new policies were brought. The introduction of the Affordable Care Act or ACA requires all medical companies to send a legal report to the government regarding sales, and also a specific amount of fee is also imposed on the companies (Williams, 2021). However, Pfizer has been a slow chaser in the matter of providing reports and compiling the legal transformations.
Environmental: The company has its guideline by which it is shown to be following CSR, especially focusing on the nonproduction of drugs that might, directly and indirectly, affect the environment and human lives (Himmelstein et al., 2019). By the PESTLE analysis, the strategic positioning of the company appears to be strengthening in the national market, however, the failing revenue shows the underlying issues Pfizer is facing for at least the past five years.
Marketing, Management & Operational strategy
Pfizer's marketing strategy can be analysed by deploying a framework named 4P's, by which price, product, place, and promotion related to the company will be systematically done (Lim, 2021). The pricing strategy of the company is quite similar to those of the other pharma companies, that is to hike the price of the older drugs that are near their patent termination. By deploying this method Pfizer was able to increase thirty-seven percent hike in their annual income by. Pfizer's product strategy is broadly divided into two parts, one is dealing with established products, and the other deals with innovative products. There are distinctive businesses separated on this basis, the GEP and GIP respectively. GEP deals with the products that are already there in the market but losing the competition, and GIP deals with groundbreaking innovative drug manufacturing by which new diseases can be addressed. The place in the 4P will address Pfizer's growth in the national and internal markets. The company has included almost two hundred supply chains and more than one hundred and fifty logistics partners in its ten manufacturing centres. Pfizer has been failing to undertake promotional activities properly and to align them with the growth and marketing strategies of the company (Andhyka, 2020).
Figure 5: 4P’s Framework
The management and operational strategy of Pfizer have been identified as democratic. Previously, innovation, creativity, and the decision-making process emanated from the top management, and the CEOs were held accountable for all the responsibilities. However, since 2010, with the coming of the new management team and leaders, there has been a significant change in management. The leaders now encourage the employees to speak up if the leaders are speaking wrong. The employees are given the upper hand to come up with innovative ideas. The program "OWNIT" has been brought by which employees are given free hand to speak up if they feel management is doing something wrong. The values, aims, and missions of the company were revised and emphasis was given to the production of drugs for helping people and providing the consumers with fundamental priority. The company has a well-laid-out operational strategy by which it reaches every corner of America, and one such is the Highly Orchestrated Supply Network. This strategy has benefited the company as it can manage the transportation, logistics, delivery, and maintenance of the medical protocols of the drugs, all of these in a single go.
Recommendations
Pfizer must deal with governmental regulations more aggressively than it does with M&A. With governmental regulations in check, the company can better its condition in the international market. The revenue must be increased, by not reducing the investments in the R&D sector but in its lag in mass production of other drugs other than penicillin (Alkhyel et al., 2021). The company must consider producing other competitive drugs in large volumes, creating competition for rival companies. Pfizer must produce medical drugs at a cheaper price than the other rival companies. The company must provide more investments in its innovative strategy, that is, in its Pfizer Venture Investments (McIntyre, and Song, 2019).
Conclusion
The essay has analysed the company in concern, that is, Pfizer, a pharmaceutical organisation. The analysis has seen that the company has a strategically solidified position with innovative and unique products. However, the company has been able to reach the national market with aggressive methods such as M&A, but the reach of Pfizer in the international market is yet to be achieved. The report has undertaken detailed analysis by deploying various methodical and theoretical models, and the ultimate analysis has been mentioned in the report, that is the strategic positioning and the sustainability of the company is visible. The company produces unique products and is quite wise spread in the market.
References
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