International business strategy of pfizer from 2014 to present

The global pharmaceutical industry is widely known to be a highly competitive and dynamic sector that requires companies to constantly adapt and evolve their business strategies with a view to prolonging their market position and sustaining growth. This report explores the international business strategy of Pfizer, one of the worlds leading pharmaceutical firms, over the period from 2014 to the present. Pfizer, founded in 1849, has established itself as a prominent player in the global healthcare market. Over the years, the company has strategically expanded its operations across borders, leveraging its strong research and development capabilities, innovative product portfolio, and robust marketing strategies to gain a competitive edge in various international markets. The period from 2014 to the present has been a transformative one for Pfizer, marked by significant strategic initiatives and adaptations in response to evolving market dynamics, regulatory changes, and emerging healthcare challenges. This report aims to analyze and assess the key elements of Pfizers international business strategy during this period, highlighting the companys efforts to penetrate new markets, enhance global partnerships, and drive innovation. By delving into some key aspects, this report will provide valuable insights into Pfizers international business strategy and shed light on the companys strategic decisions, achievements, and challenges faced during the period from 2014 to the present. Such an analysis will enable a comprehensive understanding of Pfizers global expansion efforts and its positioning within the highly competitive pharmaceutical industry.

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS REPORT

INTERNATIONAL BUSINESS STRATEGY OF

PFIZER FROM 2014 TO PRESENT

Instructor Group Credit Class

: Dr Nguyen Hong Hanh :

: KDOE307

Hanoi, June 2023

TABLE OF CONTENTS

INTRODUCTION 1

I Overview of Pfizer 2

1 History development 2

2 Mission, vision, and core value 3

2.1 Pfizer’s mission 3

2.2 Pfizer’s vision 3

2.3 Pfizer’s core value 3

3 Current status on the global market & business industry 3

II Analyze the international business strategy of Pfizer in the period of 2014- 2023 4

1 Analyzing the value chain model of Pfizer 4

1.1 Primary activities 4

1.2 Supportive activities 8

2 Reasons for Pfizer adopting transnational strategy 11

2.1 Business characteristics - VRIO framework analysis 11

2.2 Environment characteristics and pressures 13

3 Pfizer’s response to cost reduction pressure and local responsiveness pressure 18

3.1 Response to high-cost reduction pressure 18

3.2 Response to high local responsiveness pressure 19

III Evaluate the international business strategy of Pfizer 20

1 Achievements 20

2 Factors contributing to the success 21

3 Challenges of Pfizer in the global market 21

CONCLUSION 22

REFERENCE 23

LIST OF FIGURES

Figure 1 Timeline for the development of the COVID-19 mRNA vaccine 2

Figure 2 Pfizer’s value chain model 4

Figure 3 Pfizer’s Global PGS Map 6

Figure 4 VRIO framework 11

Figure 5: VRIO analysis of Pfizer 13

Figure 6 Leading companies based on their revenue in 2022 16

INTRODUCTION

The global pharmaceutical industry is widely known to be a highly competitive anddynamic sector that requires companies to constantly adapt and evolve their businessstrategies with a view to prolonging their market position and sustaining growth This reportexplores the international business strategy of Pfizer, one of the world's leadingpharmaceutical firms, over the period from 2014 to the present

Pfizer, founded in 1849, has established itself as a prominent player in the globalhealthcare market Over the years, the company has strategically expanded its operationsacross borders, leveraging its strong research and development capabilities, innovativeproduct portfolio, and robust marketing strategies to gain a competitive edge in variousinternational markets

The period from 2014 to the present has been a transformative one for Pfizer, marked

by significant strategic initiatives and adaptations in response to evolving market dynamics,regulatory changes, and emerging healthcare challenges This report aims to analyze andassess the key elements of Pfizer's international business strategy during this period,highlighting the company's efforts to penetrate new markets, enhance global partnerships, anddrive innovation

By delving into some key aspects, this report will provide valuable insights intoPfizer's international business strategy and shed light on the company's strategic decisions,achievements, and challenges faced during the period from 2014 to the present Such ananalysis will enable a comprehensive understanding of Pfizer's global expansion efforts andits positioning within the highly competitive pharmaceutical industry

I Overview of Pfizer

1 History development

In 1849, Pfizer was firstly found by Charles Pfizer and his cousin, Charles Erhart Thebusiness then set up to be Charles Pfizer and Company in Brooklyn, New York The CivilWar (1861-1865) was a prime time of significant development for Pfizer It is noted that therewere different medical supplies in high demand, therefore Pfizer was able to provide the frontlines with preservatives, disinfectants, iodine, chloroform, and morphine In 1919, Pfizerinvented a method for generating citric acid in large quantities, ending the dependency onimports from Europe In 1944, Pfizer produced penicillin massively and became the world’slargest producer In 1952, the company established into greater scales as it extended into thefield of animal health by acquiring the J.B.Roerig nutritional company and setting up aspecialized research farm in Terre Haute, Indiana

In 2018, Pfizer and BioNTech committed to a contract to start thoroughly working intomRNA-based influenza vaccines In December 2020, the company became the first to receive

an emergency use authorization from the FDA for a COVID-19 vaccine As April 2021,Pfizer and BioNTech had manufactured 316.5 million vaccine doses, which have beenapproved in 70 countries and territories

Since December 2020, nearly 4.6 billion Pfizer-BioNTech COVID-19 vaccines havebeen shipped to 181 countries, of which more than 1.8 billion have gone to low- and middle-income countries (Dangers, n.d)

Figure 1 Timeline for the development of the COVID-19 mRNA vaccine

Source: Elsevier

2 Mission, vision, and core value

Pfizer has always emphasized product innovation, which is reflected in its mission and vision

statements The top pharmaceutical corporation concentrates on producing top-notch medicalproducts and medicines Second, by working toward making the world a healthier place, the

business demonstrates its dedication to creating and offering goods that directly enhance the

health of the patient Pfizer states in its vision statement that improving patients' lives through

product development is its top priority

2.3 Pfizer’s core value

Pfizer culture is driven by four core values: courage, excellence, equity, and joy (Pfizer, n.d)

Courage: Breakthroughs start by challenging convention, especially in the face of uncertainty

or adversity They achieve this when they think broadly, speak up, and take action

Excellence: They can only change patients’ lives when they perform at their best together.

This occurs when people pay attention to what important, decide who does what, and tracktheir results

Equity: They believe that every person deserves to be seen, heard, and cared for When they

are inclusive, behave honourably, and lessen healthcare inequities, this occurs

Joy: Although they give themselves to their work, they also receive from it When they take

pride, acknowledge one another, they are happy

3 Current status on the global market & business industry

Pfizer Inc (Pfizer) discovers, develops, manufactures, and commercializesbiopharmaceuticals Their products cure a range of ailments, including cancer, inflammation,rare diseases, metabolic, cardiovascular, metabolic, and pain disorders, as well as women'shealth issues Additionally, it offers contract manufacturing services, sterile injectable drugs,biosimilars, active pharmaceutical ingredients (APIs), and medicines Pfizer distributes itsgoods through distributors, merchants, pharmacies, hospitals, private physician offices, clinics,and public institutions Their primary manufacturing facilities are in India, China, Japan,Ireland, Italy, Belgium, Germany, Singapore, and the US (GlobalData, 2023)

Due to its COVID-19 vaccine, Pfizer has been in the spotlight since 2020 The firstCOVID-19 vaccination was developed by Pfizer and was broadly endorsed by national healthauthorities Pfizer is currently the top pharmaceutical firm in the world based on pharma salesrevenue as a result of its enormous sales during the epidemic In 2022, the New York City-based business's overall income reached a new high of over 100 billion dollars, with about42% of that coming from the US With a market valuation of more than 240 billion USD as of

2022, Pfizer was one of the top five most valuable pharmaceutical and biotechnology firms

II Analyze the international business strategy of Pfizer in the period of 2014- 2023

1 Analyzing the value chain model of Pfizer

Figure 2 Pfizer’s value chain model

Although Pfizer’s inbound logistics in different countries have some changes to

adapt to the laws and regulations of those nations, like regulations on material imports,

inventory management, etc , Pfizer still sets a global standardized process and

requirements for

inbound logistics activities to ensure the raw materials quality, timeliness, and

cost-effectiveness Pfizer always upholds very high standards, requirements, and environmentalprotection with all of its supply partners to guarantee a reliable supply, hence, Pfizer isextremely careful when choosing suppliers, negotiating contracts, and monitoring supplier

performance Once arrived at Pfizer's facilities, raw materials have to undergo strict quality

control to verify their quality, and quantity, as well as guarantee that they meet the necessary

standards and adhere to regulatory requirements Additionally, Pfizer also implements a

special security program that covers every step of production and delivery, including

inbound logistics in every nation

In 2020, the breaking out of the COVID-19 pandemic disrupted Pfizer's global supply

chain, while the demand for vaccines was increasing, Pfizer decided to develop its own raw

materials to keep a stable vaccine supply for the epidemic season Not only does this shorten

vaccine production time, but it also saves a part of the production costs, making the cost of

vaccines affordable for everyone, including poor and underprivileged countries.

1.1.2.Operations

The processes used in operations include those for converting raw materials intofinished goods before launching them into the market, like: formulation development,production planning, packaging, quality control, and compliance with Good ManufacturingPractices (GMP)

Seamless operations

With over 35 manufacturing sites equipped with state-of-the-art facilities spanning

four continents, Pfizer assists in the yearly distribution of more than 50 billion doses of

medications and vaccines to more than 181 nations, reaching over 1.3 billion patients,

accounting for one-sixth of the people on earth Additionally, by leveraging the global

supply chain with mass production, Pfizer can not only gain the benefits of economies of scale, which contribute dramatically to cost reduction, but also enhance the speed of

manufacturing, leading to an increase in medicine supply around the world These also

make up the competitive advantage of Pfizer in the pharmaceutical industry.

The manufacturing of Pfizer has been decentralized to some extent as Pfizer wants to

utilize benefits from such low labor costs and rich-labor countries as China, India, and

Indonesia; nevertheless, the majority of operation was centralized in the USA and Europe

where most of Pfizer’s manufacturing sites are located

Quality control

Figure 3 Pfizer’s Global PGS Map

Source: Website of Pfizer

As a long-established and leading company in the biopharmaceutical industry, Pfizer

has applied extremely stringent product quality control to ensure that it is always providing customers with safe, effective products that meet regulatory requirements and other

relevant standards and guidelines This is not only for the headquarter but applied consistently and synchronously in global manufacturing sites Accordingly, Pfizer formed

a Quality Management System (QMS) to regulate and supervise all manufacturing

processes to ensure the safety, quality, and efficacy of products.

centers and numerous distributors on multiple continents to reduce the risk of

interruptions in the supply of vital medications and meet global demand Pfizer combines

both centralized and decentralized distribution models in its outbound logistics activities

to achieve the highest effectiveness and efficiency Besides focusing on delivering to 11

distribution centers - centralized distribution, Pfizer also distributes its products through various local distribution

networks, including local wholesalers, local distributors, local pharmacies, local hospitals,

and local healthcare facilities to meet the huge local needs in the fastest way

As a result of the Covid pandemic's complicated development, Pfizer's distribution

system has become more centralized, with the primary distribution channel being through 11

distribution centers and governments However, this does not imply that Pfizer doesn't use anydecentralized distribution channels Instead of directly delivering to local distributors as

before, Pfizer has participated in a multilateral distribution mechanism such as COVAX and international health organizations and coalitions like WHO, which are other forms of

decentralized distribution This versatile combination of two delivery routes enables Pfizer

to deliver vaccines in the fastest, safest, and most effective way possible With thatremarkable and effective distribution process, Pfizer has successfully distributed millions ofdoses of its high-quality COVID-19 vaccines to over 165 countries, which makes Pfizer’sreputation spread all around the world and reach the peak point of Pfizer's business success

1.1.4 Marketing and sales

Local marketing

Pfizer's localization approach entails adapting marketing efforts to specific regions and

nations while taking into account the particulars of each target market Pfizer customizes its

products, messages, and services to suit the various requirements and cultural preferences of the local population Pfizer's localization strategy enables the business to

strengthen its global client relationships and expand its market footprint

Product strategy

Pfizer's product strategy is centered on creating and offering high-quality andinnovative pharmaceutical goods that guarantee compliance with safety and efficacy

regulations as well as satisfy a variety of consumer needs from many different countries.

They have a diverse product portfolio, including disease treatments, vaccines, healthcaresupplies, and personal care items Pfizer makes significant investments in R&D to releasecutting-edge solutions that offer clients value in healthcare Additionally, Pfizer drugs are

localized in terms of their designs, packaging, and usage instructions to fit each country's

culture, language, customer preferences, medical standards, and safety standards Throughthis strategy, Pfizer has established a name for itself and won customers' trust in variousmarkets in the pharmaceutical industry

Promotion strategy

Pfizer does not have any standard promotion strategy as Pfizer customizes its strategy

to each nation in order to reach local customers more efficiently.

As a pharmaceutical company, Pfizer cannot directly advertise its products to

consumers Instead, Pfizer frequently promotes medicines to local hospitals and local

medical professionals by organizing meetings and seminars with local doctors and other local

healthcare professionals Pfizer additionally uses many local media for product promotion

and medical information dissemination, including radio, print media, social media, andwebsites, depending on which platforms are popular in each country and how they can best

appeal to local consumers' tastes and cultures In order to raise brand awareness and foster

customer trust, Pfizer also conducts local pharmaceutical education programs and local

support programs, which gives it more opportunities to approach more local customers.

In the pharmaceutical sector, Pfizer is a company that spends a lot on advertising.Especially in the COVID-19 pandemic period, due to the company's significant investment in

media, social networks, and celebrities bragging about their Pfizer injections, this vaccine has

become a symbol of vaccination, generating tremendous revenue for the company.

1.1.5.Service

Pfizer offers a variety of top-notch customer services depending on each nation’s

culture, medical regulations, and business environment, but has to follow Pfizer's global service standards to ensure service quality as well as to retain its loyal customers while also

defending their safety and rights Some of Pfizer’s services include: customer support,

pharmacovigilance (PV), and medical information to address inquiries, adverse events

reporting, and ensure safe and effective product usage Additionally, unlike many other

pharmaceutical companies, Pfizer still bears responsibility when a drug turns into a genericone Pfizer continues to carefully monitor the quality, safety, and dependability of theirgeneric medications rather than concentrating only on what is under development Thus, ifconsumers purchase generic drugs from Pfizer, they can still be assured of product quality andtheir rights

1.2 Supportive activities

1.2.1.Procurement

Procurement is a critical function in Pfizer's secondary value chain activities, ensuringthe availability of essential resources for drug development, manufacturing, and distribution.Pfizer maintains a global network of suppliers and follows a strategic approach toprocurement

In the procurement process, Pfizer frequently employs centralized and standardized

procurement methods to optimize the acquisition process and easily control supply quality.

Although Pfizer has a large number of suppliers from various nations, the majority of

Pfizer's supply is centralized on a few key partners due to the scarcity of specialty

materials Some of Pfizer's key suppliers are: DSM, BASF, Moreover, Pfizer also creates

global category teams to support centralized procurement, supplier monitoring and

evaluation, and assistance with local procurement processes when needed By leveraging itsscale and resources, Pfizer's procurement organization aims to streamline operations, achievecost savings, maintain quality, and ensure a dependable supply chain This approach supportsPfizer's global, regional, and local procurement needs across diverse markets, aligning with thecompany's overall objectives

1.2.2.Technology development

Pfizer's success heavily relies on its commitment to technology development Thecompany understands the transformative power of innovation and continually invests inresearch and development (R&D) to discover and develop novel drugs and therapies

In recent years, Pfizer has increasingly incorporated advanced technologies into its

R&D processes Computational modelling, bioinformatics, and artificial intelligence (AI)

play pivotal roles in analyzing vast amounts of data, predicting drug-target interactions, andaccelerating the identification of potential drug candidates These technologies enable Pfizer

to streamline its research processes, reduce costs, and increase the probability of success inbringing innovative therapies to market

Although Pfizer centralizes a number of key technologies at its headquarters, most

of Pfizer still decentralizes technology and promotes independent R&D development for

each locality to better meet the demands of each market In addition, Pfizer has successfully applied global learning in sharing and transferring technology between subsidiaries This

aids Pfizer in improving overall operating system efficiency, cost savings and increasedcompetitiveness in the global market For instance, in 2020, Pfizer based in Germany, incollaboration with BioNTech, successfully researched a vaccine against COVID-19 withsuperior efficacy to other vaccines During the research process, Pfizer shared and combinedknowledge and experience from researchers at the German R&D center with other R&Dcenters This has accelerated the Pfizer vaccine's success and efficacy Additionally, afterdisclosing the vaccine research findings, Germany-based Pfizer transferred cutting-edgetechnology and methods to other Pfizer R&D facilities around the world Thanks to theflexible integration of

global learning in the production process, Pfizer has developed effective solutions and quicklyreacted to the COVID-19 pandemic emergency situation.

1.2.3.Human resource management

Human resources management plays a crucial role in Pfizer's success, as the company

recognizes that its employees are key assets Pfizer actively invests in attracting, developing,

and retaining top talent in various fields, including research, clinical trials, sales, marketing,and administration

The recruitment process at Pfizer is meticulous, aiming to identify individuals with the

necessary skills, expertise, and cultural fit The company offers comprehensive training and

development programs that are localized to fit with each nation's culture and development conditions to improve employee competence across all locales and ensure they

stay at the forefront of their respective fields Pfizer's commitment to continuous learning fosters a culture of innovation and adaptability and motivates managers and employees to

exchange their knowledge and experience across subsidiaries This enables employees to

contribute to the company's growth and drive scientific advancements

In addition, Pfizer has implemented flexible global learning initiatives in its human

resources management These include organizing seminars, conducting training programsbetween subsidiaries, promoting international projects, and providing opportunities foremployees to work in different branches across various countries These opportunities exposeworkers to diverse cultures and working styles, foster personal development, and enrich theirknowledge bases

1.2.4.Firm infrastructure

Firm infrastructure encompasses the organizational structures, processes, and systemsthat support Pfizer's overall operations The company's strategic planning process is crucial in

defining its long-term objectives and identifying growth opportunities In each local region,

Pfizer focuses on conducting extensive market research and analysis to understand

various customer needs in various nations, competitive landscapes, and industry trends.

This enables the company to make informed decisions and develop effective strategies that

are suitable to the local conditions and culture to gain competitive advantage in each locale

and expand the global market share

Besides, Pfizer also developed a centralized management system to shape and set

common strategies, standardized procedures, and global standards for all subsidiaries Thisensures that Pfizer subsidiaries operate consistently, effectively, and with high standards

In conclusion, through value chain analysis, the characteristics of Pfizer’s activities is

the combination of global strategy and multi-domestics strategy Therefore, we can conclude

that Pfizer has been implementing a transnational strategy.

2 Reasons for Pfizer adopting transnational strategy

2.1 Business characteristics - VRIO framework analysis

VRIO framework analysis

In 1991, Jay Barney published an article titled "Firm Resources and SustainedCompetitive Advantage" that served as the foundation for the VRIO framework, which wasfurther elaborated in his book "Resource-Based Theory: Creating and Sustaining CompetitiveAdvantage." In order to establish if a company can maintain a competitive advantage, itexamines its internal resources and competencies Based on the four criteria of value, rarity,imitability, and exploitation by the organization, the Barney value-rarity-imitability-organization (VRIO) framework evaluates a company's talents and resources and the potentialfor competitive advantage that results The VRIO framework is displayed as below

Figure 4 VRIO framework

The resources and capabilities identified from Pfizer are evaluated using the VRIOframework according to the following criteria: Valuable, rare, costly to imitate, and exploited

by organizations

Value: The resource adds value when it enables the business to develop and put into

practice plans that will increase productivity and effectiveness An attribute provides valueand becomes a resource, departing from the conventional strengths, weaknesses,opportunities, and threats (SWOT) analysis (Barney, 1991) This is because it allows for theexploitation of opportunities and/or the neutralization of threats

Rareness: If the majority of competitors possess the same valuable resource, they will

probably investigate its application in comparable ways, implementing the same creating approach This would prevent any business from gaining a competitive edge bypossessing a valued resource (Barney and Zajac, 1994)

value-Imitability: If scarce and precious resources are easily imitated competitors will do so

right away, eliminating any chance of a competitive advantage If a resource is pathdependent (Dierickx and Cool, 1989; Vergne and Durand, 2011); if there is an ambiguousrelationship between the resources that strengthens competitive advantage (Barney, 1995;Dierickx and Cool, 1989; Reed and DeFillipi, 1990); if a resource is socially complex, or ifthere are legal property rights, it is more difficult to imitate

Organization: Competitive advantage results from how businesses use organizational

processes to produce what can be viewed as intermediate products between primary resourcesand the firm's final products (Pan et al., 2007) These intermediate products can be thought of

as being produced between the firm's primary resources and its final products

Resources and

Capabilities Value Rareness

Costly to imitate Organization

Competitive implication Sales Force and

Potential sustainable competitive advantage

Track Record of

Leadership Team Yes Yes Yes Yes

Strong Competitive Advantage

Track Record of

Project Execution Yes Yes Yes Yes

Strong Competitive Advantage

Customer

Community Yes Yes Yes Yes

Strong Competitive Advantage

Opportunities for

Brand Extensions Yes Yes No

Require higher budget

Temporary Competitive Advantage

Product Portfolio

and Synergy Yes

Many competitors No Yes

Short term competitive advantage

Pricing Strategies Yes No No Yes

Temporary Competitive Advantage

Brand awareness Yes Yes No Yes

Sustainable Competitive Advantage

Leadership Yes No Yes

Can Lead to Strong Competitive Advantage

Not yet utilized Strong Competitive

Yes Potential to build on

Figure 5: VRIO analysis of Pfizer

The brief analysis using the VRIO framework shows that the sustainable competitiveresources of Pfizer include: Track Record of Leadership Team, Track Record of ProjectExecution, Customer Community, Ability to Attract Talent in Local & Global Markets, Brandawareness, and Intellectual Property Rights, Copyrights, and Trademarks The companyresources have a rather sustainable competitive advantage and as a result to a strongcompetitive position

2.2 Environment characteristics and pressures

This report adopts a business analysis framework called Porter's Five Forces, which isfrequently used to evaluate a company's corporate strategy as well as its industry structure, toexplore the general development direction of the pharmaceutical industry The concept wasfirst