Strategic Management Pharmaceutical - Essay Example

Strategic Management Pfizer, Inc. is a leading pharmaceutical company which spends of $7.4 billion in R&D activities. The company has a clear growthstrategy which fit into the overall corporate strategy (www.pfizer.com). The remarkable feature of Pfizer, Inc is that the company is concerned not so much with resources, but rather with organizational capabilities and the ways of organizing activities and units within the firm, in that such ways must enable growth through a more efficient use and application of these resources.

R&D is the main source of organizational and economic growth of the company. This trend is caused by the nature of pharmaceutical industry and dependence upon new product development. Pfizer Inc. invests in product development and service improvements in order to sustain a strong market position and remain a leading international company. Pfizer Inc. pays a special attention to the product mix and geographical location (Johnson, Scholes 1998). Pfizer Inc. follows two pathways: growth with the same products in the same markets and development of new products for the same markets.

Pfizer Inc follows vertical-integration which allows the company to integrate upwards. Also, growth strategy involves HRM and resource location aimed to meet the highest industry requirements and customers' demands. It was stated above that marketing departments work more closely with R&D departments to ensure that the products which are developed are those which cater for the changing needs of target customers and different needs of varying customer segments. In recent years, high failure rates in the introduction of new products have led departments to be very risk averse, with most 'new' products emerging being merely extensions of existing product lines and not truly new and innovative offerings.

Its best selling and innovative products include Lipitor, Diflucan, Zithromax, Viagra, Celebrex etc. "The world's biggest pharmaceutical firm has 14 of the world's 25 best-selling medicines" (Leckey 2005). The growth is driven by the firm's present customers, through increased added value, the identification of possible market niches for related products, access to channels for certain groups of customers, and reformulation of the pricing strategy. Pharmaceutical companies also "need to diversify their product mixes as broadly as possible and acquire successful mid-size drugs as well as blockbusters" (Sivy 2006).

The second step consists of improving the firm's economic structure. The third step consists of improving execution so that the firm's operations support and promote further corporate growth. The main advantage of Pfizer Inc. is that its management makes improvements in the different processes in order to respond effectively to changing economic environment. Acquisitions and mergers help Pfizer Inc. to acquire large market share and sustain a leading position. "It is spending about $1.9 billion to acquire Vicuron Pharmaceuticals Inc.

, a biopharmaceutical company focused on the development of new anti-infectives" (Leckey 2005). This strategy is based on co-operative business activities between two or more firms, entered into for strategic reasons, involving the creation of a separate business entity under joint control and ownership. "Because of Pfizer's dominant size and current stock price, the analyst consensus opinion on its shares is "buy" (Sivy 2006).These strategies help Pfizer Inc. to meet the highest industry requirements and invest in R&D.

The globalization of pharmaceutical industry is putting pressure on largw companies to develop global access to their products and to leverage brand equity on a worldwide basis. Clear growth strategy allows Pfizer Inc to satisfy the wants and needs of a global market. A true global product is offered in all world regions, including Asian and European countries. Corporate growth ensures sales volume and financial strength to maintain inventories and extend credit to customers, the willingness and ability to promote the product lines and respond to changing economic and social environment.

References1. Johnson, G., Scholes, K. Exploring Corporate Strategy. Hemel Hempstead: Prentice Hall, 1998. 2. Leckey, A. Giant Pfizer confident it can produce growth. 2005. 3. Sivy, M. Investing after Pfizer's flop - 3 strategies. 2006. http://money.cnn.com/2006/12/04/commentary/sivy/sivy.moneymag/index.htmpostversion=20061205084.