The pharmaceutical industry is characterized by intense competition. However, Pfizer has managed attain an optimal market position as a result of its effectiveness in formulating and implementing operational strategies. Pfizer has adopted a comprehensive diversification strategy that has enabled it develop an extensive product portfolio.
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The effectiveness of the firm’s diversification strategy has been enhanced by the commitment of the firm’s management team in investing in a lean research and development program. Additionally, the firm’s management team is focused at ensuring that effective marketing of the firm’s products is undertaken (Bronson, Bhenderu, Gatti& Srivastava, 2011).
According to Kozami (2005), diversification entails increasing the scope of a firm’s operation. One of the ways through which diversification can be implemented is by focusing at different customer groups. Additionally, the firm may also undertake diversification by expanding into divergent business lines (Kozami, 2005).Through diversification strategy, Pfizer has been able to establish a number of business units some of which include animal health, nutrition, capsugel and consumer healthcare.
Considering the fact that firms are affected by changes in the macroeconomic environment, the firm’s diversification strategy is faced by a number of opportunities and problems. Hence, it is essential for the firm’s management team to focus on improving the diversification strategy.
This will culminate in the firm developing a high level of competitiveness. In line with aforementioned issues, this paper seeks to identify the problems and opportunities that the firm faces, their solutions, resource needs or constraints and the metrics to assess the success of the solutions suggested.
|Problem/opportunity||Solution identified||Resource needs or constraints||Metrics of success|
|Expiry of the firm’s product portfolio patent protection (Bronson, Bhenderu, Gatti& Srivastava, 2011).||Pfizer’s management team should consider refocusing and optimizing its product patent protection.||Pfizer should ensure that its meets the statutory requirements with regard to patenting. The firm’s products should be characterized by novelty and non-obviousness.||Assessing the degree of market exclusivity attained (Crosse, 2007).|
|Expansion of operations into the emerging markets||Establishment of franchises in the identified emerging markets such as China.||A strong marketing team to ensure that the products are effectively introduced in the emerging markets.||Continuous assessment of the percentage contribution of the marketing program instituted in the emerging markets to the firm’s profitability.|
|Developing culture of continuous product improvement and innovation.||Instituting a comprehensive research and development program. The program should be continuously updated in order to take into account the market changes hence minimizing product failure.||Develop a strong research and development team in order to improve the effectiveness and efficiency with which market research will be conducted.||Evaluating the number of products added in the respective business units.|
Currently, Pfizer focuses its operations on nine main areas of competition in its healthcare businesses which include primary care, oncology, specialty care, animal health, consumer healthcare, capsugel and established products. Considering the fact that consumers are faced by a variety of healthcare products to select from, diversifying its product portfolio will result to the firm increasing its revenue generation for example by establishing multiple businesses.
Additionally, diversifying the firm’s product portfolio will enable Pfizer to gain a higher leverage against its suppliers. As a result, Pfizer will not be required to rely on one supplier. Upon expiry of patent protection in the domestic market, the firm should consider marketing such products in the emerging markets.
Bronson, R., Bhenderu, L., Gatti, B. & Srivastava, J. (2011). Pfizer: up to the challenge? Web.
Crosse, M. (2007). Pediatric drug research: studies conducted under best pharmaceuticals for children act. New York: Diane Publishing.
Kozami, A. (2005). Business policy and strategic management. New Delhi: McGraw-Hill Publishers.