Change at Pfizer: Jeff Kindler (B) The Wyeth Acquisition Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

Jeff Kindler the CEO of Pfizer had incorporated many strategic changes and the implementations of these changes are yet to leave an impact on the company. The company is expected to face revenue loss due to the expiration of the patent of Lipitor, which will force the company to lose the exclusivity for the product. According to a report in 2008, the company is expected to lose around $35 billion in revenue due to the expiration of 14 products and to lose these products to cheaper generics. The issue wasn't with Pfizer but the entire industry suffering from the same issue and companies like Myers Squibb, and Eli Lilly is also expected to lose their patents for some major products within next five years.

One strategic change practice not followed by Pfizer in the recent years was any merger or acquisition. This trend was to some extent vanished from the industry as the last merger happened was in 2004 of Sanofi-Aventis. This was the biggest merger happened in the recent years. Although some small mergers happened in the recent years, for example, Eli Lilly is acquiring ImClone, Novartis took over Speedel and the merger between Roche and Genentech. Pfizer last merger or acquisition happened when the company acquired Pharmacia, but was failing to execute the plan as expected and the acquisition was not regarded as a wise decision. The company is under real consideration for acquiring or merging with another company to avoid the expected loss that is likely to occur in the recent years.

Problem Statement

Due to the expected loss in revenue by losing exclusivity of Lipitor, Pfizer’s CEO Jeff Kindler is in consideration to make a strategic move in the form of merger or acquisition. The issue with the move that the industry has not practiced such move in the last four years. Another big concern is that the last acquisition by Pfizer did not go as planned. Now the CEO wants to look for options for acquiring or merging as the company has around $26 billion in cash. However, has to consider a company that will provide a gracious portfolio of marketed drugs, as well as R&D pipeline.

Analysis

The analysis portion will consider the internal and external analysis of the company by using a SWOT model in order to identify the strengths and weaknesses of the company along with the external threats and opportunities. Secondly, by using Porter’s five forces industrial analysis will be conducted to identify the feasibility for the decision. Next, the analysis will consider the financial analysis on the basis of financial ratios to make a concrete decision. On the basis of the analysis portion, alternatives will be suggested to ease the criteria for making recommendations. The rationale of each alternative will be presented to analyze the best possible alternative keeping in mind its pros and cons. By analyzing the advantages and disadvantages of every alternative, the recommendations will be presented to the CEO.

SWOT Analysis

Strengths: The strengths of the company are impressive as the company is under an industry that generates high revenues. The company’s overall ranking within the industry is commendable and is among the largest in terms of sales and is located globally. Adding to its strengths is its marketing infrastructure that is well established and help a great a deal in generating sales. Furthermore, the research and development is also well established and performing well. The progress of these two departments contributed a lot in generating more revenues in the recent years. The reputation of the company that has been well established among these years is one of its key strengths, and the company has a good-reputed name in the industry.

Adding more to its strengths is its distinctive sectors in which the company is progressing, including human health, animal health, customer and corporate health. The company's major strengths lie in its sales, research and development and marketing departments and a product Lipitor. These departments have contributed an ample amount of efforts in making Lipitor an established brand. The company for years has kept its product patent protected and invested heavily in research and development for therapeutic development and collaborated with other firms as well................

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In January 2009, Pfizer announced the acquisition of Wyeth in a cash and stock deal valued at $ 68 billion. This transaction represents the first mega-acquisition, as the global economic crisis, which began in September 2008. Jeff Kindler knew that recent acquisitions (Pharmacia in 2003) did not go as planned. Was prepared by Pfizer to acquire Wyeth? Will it solve some urgent problems of Pfizer, or create new ones? "Hide
by Michael Rose, Chander Sehgal Source: Richard Ivey School of Business Foundation 8 pages. Publication Date: February 17, 2011. Prod. #: 910M53-PDF-ENG