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Bristol Myers Squibb Company’s Analysis Case Study

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Updated: Apr 29th, 2021

Introduction and Overview

Bristol Meyers Squibb (BMS) is a global biopharmaceutical company that majors in the discovery, development, and delivery of innovative medicines that are useful in helping patients overcome serious diseases. Edward Squibb invented the Squibb pannier in 1858, which was a 50-medicine pack used to treat casualties in the Union Army during the Civil War. Squibb merged with Bristol-Meyers in 1889, establishing the second-largest pharmaceutical enterprise globally. In 2011, BMS acquired Amira Pharmaceuticals Inc., which discovers and develops new medicines for fibrotic and inflammatory diseases. BMS is now in the maturity stage of the organization’s life cycle. The company’s chief products have received approval, while others are in the process of approval. Since its inception, BMS has continually delivered high-quality programs to consumers. The company currently has branches in many countries. BMS has a diverse workforce with an inclusive culture.

Mission, Goals, and Current Strategies

The mission of BMS, as provided in the case study, is: “To discover, develop, and deliver innovative medicines that help patients prevail over serious diseases.” The company’s goal is to be the best provider of pharmaceuticals worldwide. BMS’ strategies can be drawn from its commitment statement. BMS’s strategies include cooperation with all stakeholders and environmental protection.

Internal Analysis

The IFEM score for BMS is 2.7. The company strives to meet its internal needs. However, most internal factors need a boost in one way or another.

Management

A major strength is good leadership. The weight for this factor is.04. The company has a formal mission statement, which promotes a sense of cooperation and teamwork. Great leadership promotes the realization of the company’s goals.

Finance

  • Finance is a minor weakness. The company’s net income went from a reported $10.6 billion in 2009 to $3.1 billion in 2010. Similarly, its revenue increased from $18.8 billion to $19.5 billion. The weight for this is.08. The company needs to cut costs so as to maximize its income.
  • Current Ratio (2010): Total Current Assets (Balance sheet) divided by Total Current Liabilities (Balance sheet): $13,273,000/$6,739,000= 2.0. This means that every $2 asset carries a $1 liability. Accordingly, BMS should easily be able to cater to its short term debts.
  • Return on Assets Ratio (2010): Net Income (Income Statement) divided by Total Assets (Balance Sheet): $3,102,000/$31,076,000= 0.1. This is a very low percentage in terms of profitability.

Marketing and Service

The major strength is that BMS’s products and services appropriately meet the needs of the market. This weighs.05. The company should penetrate new markets since its products are in high demand.

Production and Operations

A major strength is that the company optimizes equipment usage and maximizes capacity. The company produces medicines in line with the needs of the market. This factor weighs.04. The company should keep pace with technological developments in order to enhance production.

Human Resource Management

This is a major strength. The company has a diverse workforce with an inclusive culture. It also puts into consideration the safety, work-life balance, professional development, and respectful, equitable treatment of its employees. This factor weighs.04. The company should motivate and reward employees accordingly in order to improve their performance.

Research and Development

A minor weakness is that R&D costs are consistently increasing. This weighs.07. The company needs to balance its budget properly so that it does not get overburdened by R&D costs.

Other Relevant Internal Factors

  • A major distribution strength is that the company has established reliable distribution channels. This weighs.04. The company must fully exploit all distribution channels in order to increase its sales.
  • A major weakness in sales is the expiration of Plavix. Consequently, BMS will suffer heavy losses. This weighs.09. The company needs to find a way of filling the gap resulting from the expiration of Plavix.

External Analysis

The company’s EFEM score is 2.4. This means that its external factors are moderate, and the company needs to work on each of them in order to take full advantage of opportunities around it while preventing possible threats.

Competition and Industry

  • A major threat is that the government highly regulates the pharmaceutical industry. The weight of this is.11. BMS can react to regulations by improving quality and inventing better medicines.
  • A major opportunity is that the company’s products are in high demand. The company just needs to improve on its innovation and promote its products so as to remain competitive.

Economic & Cultural

  • A major economic threat is a low economy. This weighs.11. The company must find a way of balancing its operations with general demand and interest rates.
  • The cultural factor is a minor threat because of the difficulty in penetrating new markets. The weight for this is.08. BMS should adopt educational strategies to create awareness of the importance of its products.

Demographic

A major threat is that most developing drug markets are declining in spending. This weighs.12. The company needs to cut costs so as to reduce the prices of drugs in order to encourage people to buy drugs.

Other Relevant External Factors

  • BMS faces a minor threat of uncertain litigation against the company with regard to its services and products. The weight for this is.08. The company ought to ensure that there are high standards of care in order to avoid negligence lawsuits.
  • BMS experiences a minor threat of intellectual property protection. The weight of this is.07. The company should take appropriate steps to enhance the protection of intellectual property.

Conclusion

Basing on external and internal factors analysis, it is evident that BMS needs to revamp its strategies in order to take full advantage of the market. With regard to internal factors, the company has good management. As well, it can comfortably cater for its debts using available assets. It also has reliable distribution channels. Its operations and distribution factors are also good. What the company needs to do is to improve its research and development aspect so that it can invent other profitable products like Plavix. The company should motivate its employees by use of rewards and punishments. With regard to external factors, BMS’s products are in high demand in the market. However, there is high regulation in the pharmaceutical industry. The company needs to keep pace with the regulations so that its products do not get kicked out of the market. With the low economy, the company should work towards low-cost production so that its products sell at relatively low prices. Accordingly, BMS must promote an ethical working environment in line with respect to the environment, the community, clients, and other stakeholders in order to avoid possible litigation. BMS must also take relevant steps to enhance the protection of its intellectual property. Consequently, BMS will emerge as a leading pharmaceutical company worldwide.

Memorandum

TO: (The Instructor)

FROM: (The Student)

DATE:

RE: Bristol Meyers Squibb (BMS)

This introductory part provides a brief background of BMS. It highlights the company’s business, the period it has been in the business, and its position in the organization’s life cycle. It also describes BMS’s mission, goal, and current strategies.

BMS has an IFEM score of 2.59. It has good management. The company can settle its short-term debts using available assets. However, its profitability is relatively low. It has reliable distribution channels, relative production, operations strategies, and good human resource management. The sales are currently good, but the expiry of Plavix is likely to reduce sales considerably. R&D costs are relatively increasing. All these factors need a boost in one way or another.

BMS has an EFEM score of 2.4. This means that its external factors are moderate. The company needs to work on each of them in order to take full advantage of the opportunities around it while preventing the threats from destroying its operations.

The company is capable of emerging the leading pharmaceutical company worldwide if it considers all the factors highlighted in this paper, as well as the strategies proposed.

List of Weights

  • Management.04
  • Finance.08
  • Marketing and Service.05
  • Production and Operations.04
  • Human Resource Management.04
  • Research and Development.07
  • Distribution.04
  • Sales.09
  • Competition and Industry.09
  • Economic.11
  • Cultural.08
  • Demographic.12
  • Litigation.08
  • Intellectual property protection.07
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IvyPanda. 2021. "Bristol Myers Squibb Company's Analysis." April 29, 2021. https://ivypanda.com/essays/bristol-myers-squibb-companys-analysis/.

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IvyPanda. (2021) 'Bristol Myers Squibb Company's Analysis'. 29 April.

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