CONTENT
EXECUTIVE SUMMARY………………………………………………….2
1. Introduction……………………………………………………………….3
1.1 Importance of strategic Management……………………………………3
2. Analysis of Pfizer…………………………………………………………5
2.1 Strategy…………………………………………………………………..5
2.2 Business Segments………………………………………………………6
2.3 Challenges……………………………………………………………….7
2.4 Environmental Analysis-Internal Environment………………………..8
3. Strategic operations decisions…………………………………………...10
4. Summary and recommendations………………………………………..12
References………………………………………………………………….13

Executive Summary

Pharmaceutical giant Pfizer has engaged in supply chain optimization by utilizing cloud technology to create a more efficient system, according to the Financial Times.
The source reported that for more than a year, Pfizer has been reworking its IT network to implement this technology. The company and its partners are working with a cloud technology that allows everyone involved to connect to the system, which gives Pfizer a virtual model of its supply chain and transportation systems.
This new development will assist Pfizer in its role as one of the world's leading drug providers. With the cloud technology fully implemented, the company is able to track or trace any shipment across the globe.
"Right now, there's a map that shows all of our origins and destinations, and we have got complete track and trace (capabilities) over anything that is moving inside those lanes from a logistics perspective," said Pfizer's vice president, Jim Cafone, according to the Financial Times.
Pfizer chose to have its hundreds of partners connect to a cloud-based system, rather than demanding each company implement the same planning software. With this technology, Pfizer is able to quickly add or remove partners.
The cloud-based system may also assist the company in its cost savings efforts, because it allows Pfizer to quickly handle disruptions and see exactly where losses or problems occur.
Pfizer's supply chain is especially complex because it deals with both the patented and generic drug markets. While the generic drug market typically sees a focus on efficiency and cost-focused shipping, the patented medications require the company to respond quickly and sometimes require an investment in more expensive, specialized logistical tactics.
Supply chain management has become a concern for the company, as it oversees thousands of drug shipments. The new program will assist Pfizer in ensuring that its supply chain operates in an efficient manner.

1.	INTRODUCTION

1.1	Importance of strategic Management

Why do we need to lay so much stress on strategic management?
Strategic management becomes important due to the following reasons:
Globalization: The survival for business
First, global considerations impact virtually all strategic decisions! The boundaries of countries no longer can define the limits of our imaginations. To see and appreciate the world from the perspective of others has become a matter of survival for businesses. The underpinnings of strategic management hinge upon managers' gaining  an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of a firm's products and services must be competitive on a worldwide basis, not just a local basis.
The distance between the business sectors are becoming less due to the provisions of certain facilities.
Although political boundaries are there but in order to become successful in business it is essential to laid stress on globalization.
E-Commerce: A business tool
A second theme is that electric commerce (e-commerce) has become a vital strategic-management tool. An increasing number of companies are gaining competitive advantage by using the Internet for direct selling and for communication with suppliers, customers, creditors, partners, shareholders, clients, and competitors who may be dispersed globally. E-commerce allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness of time, distance and space in doing business, which yields better customer service, greater efficiency, improved products and higher profitability. The Internet and personal computers are changing the way we organize our lives; inhabit our homes; and relate to and interact with family, friends, neighbors, and even ourselves. The Internet promotes endless comparison shopping which enables consumers worldwide to band together to demand discounts. The Internet has transferred power from businesses to individuals so swiftly that in another decade there may be "regulations" imposed on groups of consumers. Politicians may one day debate the need for "regulation on consumers" rather than "regulation on big business" because of the Internet's empowerment of individuals.
Buyers used to face big obstacles to getting the best price and service, such as limited time and data to compare, but now consumers can quickly scan hundreds of vendors’ offerings. Or they can go to Web sites such as CompareNet.com that offers detailed information on more than 100,000 consumer products. The Internet has changed the very nature and core of buying and selling in nearly all industries. It has fundamentally changed the economics of business in every single industry worldwide
Earth environment has become a major strategic issue
A third theme is that the natural environment has become an important strategic issue. With the demise of communism and the end of the Cold War, perhaps there is now no greater threat to business and society than the continuous exploitation and decimation of our natural environment. The resources are scarce but the wants are unlimited. In order to meet the wants of the world, the resources should be efficiently utilized. For example, the use of oil resources or energy resources will make the people to use these resources for a long time.
Strategic management – A route to success:
The study of strategic management integrates different topics. Different courses are integrated due to the study of this course so that businesses become successful in every sector. It integrates the following:
Marketing 
Management
Finance
Research and development
The management and marketing are essential part of a business sectors. They should be integrated. Just like other sections of the business are integrated under this study. This term is mostly used by academia but this is also used in media.

2.	Analysis of Pfizer

Pfizer is the largest pharmaceutical company in the world.  Upon reviewing annual reviews and financial reports from the past 5 years, Pfizer, although dealing with many issues both inherent and external, is keeping a stable financial condition as well as keeping its strategic operations aligned with its goals and objectives.  The following is an overview which will further explain the company’s management and financial climate. 

2.1	Strategy 

Pfizer’s broad goal is to apply science and global resources to improve health and well-being at every stage of life. Their strategy has been to essentially “beat their competitors to the punch” by being the first to develop and market pharmaceutical drugs.  They do this by investing heavily in research and development. In the past six years, their average research and development expense has been 8 billion dollars, with 2010 being the highest amount at 9.4 billion. They have continued to spend approximately this amount despite continued efforts to reduce costs in certain parts of their research dealing mainly with diseases including cardiovascular.  With such large sums of money being invested in research and development, the huge risks involved highlights the confidence they have in their talent in terms of successfully developing new, brand pharmaceutical drugs.  
Pfizer is constantly looking to diversify its portfolio to meet needs at various levels and in order to increase competitive advantages.  For example: 
•        In 2010 they acquired King Pharmaceuticals, diversifying their portfolio. 
•        In 2009 they joined forces with GlaxoSmithKline to create ViiV healthcare, a separate company that combines assets in the fight against HIV/AIDS.
•        They also in the same year entered into licensing agreements with 3 India-based pharmaceutical companies, Aurobindo Pharma Ltd., Claris Lifesciences Ltd., and Strides Acrolab—all which add new non- Pfizer products to further diversify their portfolio and also add accessibility to undeserved people worldwide.
 •        Their biggest and arguably the stock exchange’s biggest deal since the housing bubble crisis, was the acquisition of former competitor company Wyeth, a deal finalized in late 2009 which solidified Pfizer’s rank as the world’s number one pharmaceutical company, and also strengthened them in terms of portfolio diversity and financial condition.  The sheet below taken directly from their 2010 annual review, displays the effects of the Wyeth acquisition. 
Goodwill and other identifiable intangible assets greatly increased along with the total debt following the acquisition.  The most positive result from the acquisition was the increase in revenues of 36 % between 2009 and 2010.  As was the 92% increase in total assets reported in 2009 shortly after the deal was closed.  All in all, Pfizer has reported to shareholder’s that the acquisition of Wyeth, famous producers of products like Advil and Centrum, will greatly enhance the company as a whole, not to mention the elimination of the 5th largest competitor. 
Revenue has stayed steady, something both Jeffery Kindler and Ian Read have both stressed and promised to shareholders. Some of this is done through establishing new products after older ones fade out, some of it is done through focusing on different business units for revenue, and the rest is done through good old fashioned tweaking of the accounting.   
The acquisition of King Pharmaceuticals will greatly impact Pfizer’s condition as well, further diversifying its portfolio.  It will allow Pfizer to leverage its existing commercial capabilities and expertise to create one of the leading broad portfolios for pain relief and management in the biopharmaceutical business.  

2.2	Business Segments 

Pfizer is divided into two major segments or divisions: Biopharmaceuticals, which account for 86% of total revenue, and Diversified, which accounts for 14%.  
The Diversified segment includes animal health, consumer healthcare, and nutrition amongst others.  Pfizer’s main revenue generating division, Biopharmaceuticals, which accounted for $58.5 billion in revenue, includes primary care, specialty care, established products, emerging markets, and oncology.  Some of the major products include: 
 * Lipitor – The world’s bestselling drug. It reduces cholesterol and possesses unprecedented safety and effectiveness.  A significant contributor to the company’s growth in recent times. 
•        Enbrel – The largest drug acquired through the Wyeth deal.  It’s prescribed to treat various forms of arthritis, plaque psoriasis, and ankylosing spondylitis.      
•        Lyrica – Used to treat epilepsy.  It was one of Pfizer’s most successful launches and since then has been approved to treat other conditions such as central nerve pain and generalized anxiety disorder. 
•        Prevnar – It’s a vaccine used to prevent invasive pneumonia, and was acquired through the Wyeth deal. 
•        Celebrex – A well prescribed drug used to treat arthritis related joint pain. Due to external research and concerns, all Celebrex now carries a warning of the increased cardiovascular risk.  
•        Viagra – The famous erectile dysfunction drug. 
•        Norvasc – The world’s most prescribed, branded medicine for lowering blood pressure. 
After reviewing financial statements from the past five years, no major changes are noteworthy other than those derived from the Wyeth acquisition, particularly those circled on the sheet above. 

2.3 Challenges 

Pfizer, like all other pharmaceuticals inherently, have to deal with a plethora of issues ranging from regulation to patent expiration and drug exclusivity.  The FDA has implemented a system where a company can usually protect their rights to a product between 15 and 20 years.  Typically, companies apply for the patent protection before they actually begin producing the drug, opting instead to secure the rights to particular compounds.  Because of this, by the time a drug makes it to the market, there’s usually about 8 to 10 years of patent protection left, significantly less than the 20 years originally offered.  Companies often try to extend these patents using different techniques. 
Once the patent has expired, it opens the market wide open for generic competition.  As such, a company’s blockbuster drug can suffer severe losses in revenue.  For example, Lipitor, what was once the world’s bestselling drug, lost its patent in late 2011 when it expired.  As a result, Pfizer is losing exclusive rights to a drug that generated over 10 billion dollars, or 1/5 of the company’s revenue.  And with many of its other major drugs losing patents in the very near future, the company is most definitely at an inflection point.  Former CEO, Jeffery Kindler, recognized this inflection point and had already begun to inform his stakeholders of the shift in focus and strategy the company must make in order to survive current times. 
 “…we will no longer be overly dependent on one or two blockbuster drugs or potential blockbusters.  In fact, no Pfizer product is expected to account for more than ten percent of our annual revenue once Lipitor loses U.S. exclusivity.” – Jeffery Kindler – CEO, Annual Review 2009.
In an effort to deal with issue of drug exclusivity, Pfizer has created an created an Established Product unit, which works on sustaining value and allocating products properly to target market to yield returns on products subject to intense depreciation.    
Another issue is dealing with government regulation.  The Food and Drug Administration are constantly evaluating and checking pharmaceutical companies to make sure they are in line and in compliance with all laws and regulations aimed mainly at consumer safety and drug efficacy.  Recently they have become more strict and tight in their dealings with Pfizer and other pharmaceutical companies.  In 2009, they implemented a series of reforms which include stricter monitoring of drug adverse effects, strengthened authority to recall products, more general funding, more transparency, and increased levels of expertise in the administration.  Pfizer has taken notice of these tightened regulations, and has reported in their 2010 annual review to have adjusted to the stricter standards and stronger enforcement.   
Pfizer has also had to deal with legal actions against the company, most notably marketing wrong doings in which the company illegally marketed certain such as Bextra, for unapproved uses.  Pfizer settled for 2.3 billion dollars in court, the largest ever in the industry.  Pfizer’s new CEO Ian Read, has made corporate responsibility a focal point moving forward. 
Leadership Change 
On July 28, 2006 the Board of Directors at Pfizer elected Jeffery Kindler CEO to succeed then CEO Hank McKinnell.  Kindler graduated summa cum laude from Tufts University in 1977 and magna cum laude from Harvard Law in 1980.  He joined Pfizer in 2002 as general counsel, but quickly became an important player in the company as it was facing an array of generic assaults on its patents.  Kindler was a well-spoken man and during his time at Pfizer the company set an industry record on lobby budget spending with a budget of 25 million dollars.  He also acted as a lobbyist himself, having attended many meetings at the White House with President Obama.  Through his lobbying, he was able to convince Obama to go against his promise to allow re-importation of prescription drugs in exchange for support on a bill and democrat backing.  Upon Kindler’s retiring, Ian Read, who had spent his entire 33 years with Pfizer and has a B.S. in Chemical Engineering and a Chattered Accountant Certification, was elected to be the new CEO.  In Read, Pfizer has a CEO that knows the company inside out with vast amounts of experience, and a man who is ‘global business’ savvy, as he previously held the title of Senior Vice President and Group President of Pfizer Wordlwide Biopharmaceutical Businesses.  Read is very adamant on his position of innovation first, and has stated in the 2010 annual review that he will continue to build on the work of Kindler. This leadership change in a broad sense probably means that the some of the lobbying power Kindler possessed will be lost, but will be made up for with Read’s knowledge in chemical engineering and book keeping expertise.  
Conclusion 
Pfizer, the largest research based pharmaceutical company in the world, is a very successful company who has had recent success mainly in their Biopharmaceuticals division, and mostly through patent protection.  Its financial condition has remained relatively steady, despite heavy regulation and even lawsuits. Future success will depend on management strategic changes, and how they respond to the current inflection point.

2.4	Environmental Analysis-Internal Environment

 Proper evaluation of a company’s financial statement is very helpful in understanding the company’s internal environment. To further assist in understanding the financial statement of company different types of ratio may be used. Ratios are helpful in the understanding of financial analysis because they seize vital components of the economic performance of the business. Three of the ratios used to determine Pfizer’s internal status are profitability, liquidity, and financial leverage.
 First, profitability evaluation is the assessment of the likelihood that a company will provide investors with a particular rate of return on their investment (Marshall, 2009). The primary focus of financial reporting is on earnings and growth, so it is clear earnings per share (EPS) are the most popular of the financial ratios. The (EPS) measures company’s bottom line earnings available to the holder of a share of common stock (Marshall, 2009). The last three years Pfizer has seen its (EPS) fall from (5.75) to (2.2) in 2011. Pfizer has also had to endure some challenging times with their stock price reaching 48-month lows. Pfizer believes that if their strategic plan is properly implemented the shareholders will once again receive higher dividends and higher (EPS). Pfizer attributes their deflated stock value to its enormous size versus the competition, acquisitions, and the recall and pending litigation. Coupled with the significant drop in stock value over the last 48-months the dividend returns are at an all-time low of (.18) per share. Encouraging information for Pfizer can be found in its assets ratio (10.2%) suggest very good use of their assets and a great rate of return for investors.
 Pfizer’s liquidity is very good. Pfizer has very good cash reserves of more than 2 billion dollars. Pfizer’s working capital and current ratios are great. The liquidity ratio shows that a company is likely to be highly liquid. There is a very distinct difference between maintaining liquidity and growing and generating profits. Diversification of liquid capital may allow a company to become more valuable and profitable. The capital funds may be more beneficial to the company if they were reallocated elsewhere. Pfizer has shown very high current ratios and working capital for the past 5 years. Pfizer attributes this to the successful mergers of two top ten pharmaceutical companies in the past 7 years.

3.	Strategic operations decisions

Pfizer's history in Russia began in 1992. Then, in the early 90's, the top management of the company in an effort to make its products available to more consumers registered its first Russian office. Its main task was to support the marketing and promotion of products manufactured by the company. In 1995, in Russia there was a first representation of veterinary unit Pfizer - PfizerAnimalHealth. With its great potential, the Russian market has demanded from Pfizer for some flexibility, but such basic ethical principles as the dedication to quality and patient care, remained unchanged. In 2000, after a tabulation of the company, it was decided to increase the number of medical representatives in Russia. This has contributed to the further growth performance of the company. In 2003, there was another significant event in the history of Pfizer - after the merger with the pharmaceutical company Pfizer Pharmacia have the opportunity to expand its portfolio of drugs hospital areas, promoted to the Russian market.
By 2007, the company has worked in more than 50 cities of Russia, from Kaliningrad to Vladivostok.
Through the activities of the company, to the Russian consumers they have become available not only to the well-known drugs, and scientific developments. Today in Russia more than 100 drugs Pfizer. 14 of them are world leaders in their respective treatment groups. It is for the treatment of diseases of the cardiovascular system, the musculoskeletal system, urological profile drugs, drugs for neurology and endocrinology, antibiotics, a wide range of oncology and hematology drugs.
As a socially-oriented company, Pfizer strives to increase the availability of their products to different categories of people, regardless of income level. To this end, the company is actively involved in government programs at a reduced drug supply, working with the Russian Academy of Medical Sciences, implementing joint projects.
High qualification of, well thought-out style of leadership, effective marketing strategy, true to the tradition of quality, commitment to ethical principles of business - all to Pfizer for the past 18 years to be one of the leaders of the Russian pharmaceutical market.
In the course of practice was considered the organizational structure of the company, as well as interaction within departments of the company.
As part of the work we have considered the pros and cons of transfer office employees to outsourcing.
The level of development outsourcing Russia certainly lags behind many developed countries. However, today it is seen positive changes in this area. Combination of methods of outsourcing can be divided into three parts - the functional, operational and resource outsourcing.
To functional outsourcing has outsourced the transfer of certain functions necessary for the conduct of business: accounting, finance and economic planning, sales and marketing, information technology, security organization, functions to improve the overall management system.
Operational Outsourcing provides transfer some operations related to the development, production, storage, transportation and sale of goods.
Resource outsourcing is a specific direction, the waiver of its own resources for the business, for the benefit of their receipt by: rental of buildings, production facilities and complete production systems.
Pfizer has cautiously decided to start with a functional outsourcing.

Summary and recommendations

Customer service separates the good companies from the bad companies. With this assignment, I would like to discuss the history of Pfizer and the way that Pfizer plans to remain competitive in the pharmaceutical industry. I would also like to show that Pfizer’s commitment to customer service is currently requiring an organizational restructuring to remain competitive. Pfizer has come to the realization that in order to remain competitive they must take a modern approach to the way that they have traditionally done business. Pfizer believes that the very attributes that have made them so successful are now the components that are preventing further progress. Pfizer believes that their size must be addressed in order to continue to deliver the same amount of customer service and focus that the public has come to appreciate and expect since 1849. Two cousins Charles and Erhardt Pfizer in Brooklyn New York formed Pfizer Inc. in 1849 (Pfizer, 2011). The cousins believed that they could be a part of the transformation of medicines during the turn of the century while achieving some financial prosperity.
 Pfizer has been and plans to continue to lead the pharmaceutical industry in areas of customer service and focus. Pfizer Inc. is known as the world’s largest and most ethical pharmaceutical company. Pfizer has more than 120,000 employees worldwide (Pfizer, 2011). Pfizer discovers, develops, manufactures, and markets leading prescription medicines for humans and animals and many of the world’s best-known consumer brands (Pfizer, 2011). Pfizer is one of the Pharmaceutical industries most innovative companies. Pfizer is committed to developing and marketing value added products that improve the quality of life for all people. 
Pfizer would like to see the products that they produce help people live longer, healthier, and more productive lives. Pfizer’s products are available in more than 150 countries. Pfizer’s fundamental business practice is about discovering, and developing medicines and making them available to the world. Pfizer earns more than 57 billion annually (Pfizer, 2011).

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