June 8, 2011
Professor Craig Clark
Pfizer's SWOT Analysis
Pfizer has come a long way since its modest beginnings in 1849, when it founded by cousins, Charles Pfizer and Charles Erhart and their sole product was citric acid, which would lead to the development of penicillin. Today Pfizer is the world’s largest research-based pharmaceutical company. The company consists of three Strategic Business Units: Health Care, Animal Health, and Consumer Health Care. Pfizer’s portfolio consists of 168 prescription products which is a big accomplishment since its inception 162 years ago (pfizer.com, Janu). However, as a mutual fund’s manager, one must look at various analytical tools and resources in deciding whether to invest in Pfizer stock. One of the resources chosen is a SWOT analysis, which acronyms stand for strengths, weaknesses, opportunities, and threats. A SWOT analyzes internal factors (strengths and weaknesses) and external factors (opportunities and threats) that can affect a company (blogspot.com, Apri). All four quadrants of the SWOT matrix will be populated with distinguishing factors unique to the company and examined to determine if investing in Pfizer is a sound decision.
Largest pharmaceutical company
Research and Development
Sales force/human resources
Integration of large acquisitions
Dependence on Research & Development
Research & Development Pipeline
Global market expansion
Strategic alliance, acquisitions, and mergers
Figure 1: SWOT Analysis Template. (swotanalysistemplate.com, May) The key strengths that has resulted in success for Pfizer, and which distinguish it from its competitors are size, marketing, research and development, financial resources and sales. There are benefits from economies of scale such as, expendable cash flow. The purchase of large companies like Pharmacia and Wyeth along with smaller alliances and mergers between companies like King pharmaceutical and Synbiotic, over the past 11 years, has given Pfizer an even larger product line, in addition to increasing profit margins. This has also strengthened product presence in several therapeutic areas as well as, product pipeline. Pfizer also excels in marketing. The company has done a superior job in establishing brand recognition with physicians and consumers. The company can get out information about product and services due in part to the sales force and influencers within the pharmaceutical community, both on a national and international level. Pfizer is known all over the world, for its product integration and how it can improve the quality of life. This makes the company attractive to others who seek to merge or present promising products and compounds for sale, further enhancing potential product expansion and growth. The objective of any pharmaceutical marketing campaign is to show distinct benefits that lead prescribers and end users to choose that company’s product or services. Research & Development is the foundation and strategic driver for Pfizer. Their growth and continued success, as of the present time and in the future, depends on innovation across emerging and profitable, therapeutic lines. According to Ian Read, president and chief executive officer of Pfizer, “we are focusing our R&D on human disease mechanisms in the areas where we believe we can win; we are strengthening our processes inside of research to help ensure we only bring differentiated medicines to market; we are applying rigor in how we manage our portfolio; and we are being discipline in how we deploy capital” (Pfizer, Marc). The R&D strategy for Pfizer also calls for investment in areas of neuroscience, cardiovascular, metabolic and endocrine disease, oncology, immunology, and vaccines. Pfizer’s ultimate goal is...