Pfizer Industry Analysis

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An Economy and Industry Analysis
Focus Industry: Pharmaceutical Industry
Focus Company: Pfizer, Inc. (PFE - NYSE)

Pharmaceutical Industry Classification
The pharmaceutical industry seems to be an intermingling of growth and expansion stage. This is mainly due to the fact that there are so much research and development (R&D) work being conducted in the industry, creating growth in the industry. At the same time, various players in this industry have started to acquire or merge with their respective competitors, in order to expand and diversify product line, market share, or new markets. The worldwide pharmaceutical sales has continued to grow faster than most segments of the world economy – driven by strong demographic trends of the world population: aging population in many countries, lengthening of average life expectancy, and rising incidence of chronic diseases.

This industry is a non-cyclical industry, as the products, drugs and medication, are geared towards consumers and markets that are not prone to price changes, inflation, or economy fluctuations. Consumers in the market might lean towards product lines in the lower end of the affordability spectrum, rather than higher end – purchasing generic products in the market.

Pharmaceutical Industry Application of Porter’s Five Forces Industry Competitors and Intensity of Rivalry
In general, the main competitors for the pharmaceutical industry are Pfizer ($45.2B in 2003 sales), GlaxoSmithKline ($35.2B), Merck ($22.5B), Bristol-Myers Squibb ($20.7B), Abbott Laboratories ($19.7B), and Johnson & Johnson ($19.5B). However, with the recent spur in mergers and acquisition (M&A) activities in various industries, the pharmaceutical industry had a significant merger in August 2004 between two France competitors – Sanofi-Synthelabo and Aventis – creating Sanofi-Aventis, one of the top three pharmaceutical companies with Pfizer and GlaxoSmithKline. The rivalry among the current competitors in this...
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