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GlaxoSmithKline vs Pfizer

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Mission - to improve the quality of human life. Purpose dedicated to better health and greater access to ... MIDAS, new market segmentation Feature Dec. 2005 ... – PowerPoint PPT presentation

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Title: GlaxoSmithKline vs Pfizer


1
GlaxoSmithKline vs Pfizer
UBI Business Competitive Intelligence Presentati
on by Aksenov Yuri Pascal Andrea Hendricx
Chris Brussels, December 15th 2006
2
Key Intelligence Topic
  • The future of pharma
  • Prevent or Cure ?

3
Analysis of key factors
  • Industry Figures
  • Players, market shares, evolution
  • Who are Pfizer and GSK
  • Performances, products, policies
  • Investors outlook
  • In depth analysis
  • Risks, Opportunities, Capabilities
  • Implications
  • Recommendations
  • Strategies, positioning
  • Conclusions
  • Sources

4
Analysis of key factors
Top 10 Pharmaceuticals companies in the world
both companies are at the top
5
Analysis of key factors
Top 10 markets evolution
6
Analysis of key factors
Market segmentation
7
Corporate views and values
Company fact sheet
Mission - become the world's most valued company
to patients, customers, colleagues, investors,
business partners. Purpose dedicated to better
health and greater access to healthcare. Growth
through innovation Research based pharmaceutical
company
Mission - to improve the quality of human
life Purpose dedicated to better health and
greater access to healthcare. Research based
pharmaceutical company Shape a flexible RD
organisation that can respond to the challenges
and the opportunities
8
Corporate views and values
Company fact sheet
  • Customer
  • deeply committed to meeting the needs of
    our customers, and we constantly focus on
    customer satisfaction
  • Customer
  • understanding and responding to their often
    changing needs.
  • Stakeholders
  • We work with stakeholders to share
    knowledge, skills and goals on how to prevent or
    manage diseases, how to get medicine to the
    people who need it, and how to promote good
    health.
  • Stakeholders
  • we must provide the right information in a
    timely and effective way.
  • Personnel policy
  • Pfizer employs 122,000 people in 60
    countries and has sales in more than 150
    countries.
  • People are the cornerstone of Pfizer's
    success, we value our diversity as a source of
    strength, and we are proud of Pfizer's history of
    treating people with respect and dignity
  • Personnel policy
  • GSK business employs over 100,000 people in
    116 countries
  • Over 15,000 people work in research teams
    to discover new medicines
  • For employees, we create an environment
    that allows them to do their best work by being
    themselves

9
Analysis of key factors
Segment portfolio
10
Analysis of key factors
31
22
11
Analysis of key factors
Industry Supplements internal RD with BDL/MA
Activity
Source Evaluate, Internal Analysis
12
Analysis of key factors
Investor outlook
13
Analysis of key factors
Performance analysis, outlook
  • US continued to remain the largest market for
    pharmaceuticals in the world
  • Pfizer, Sanofi-Aventis and GSK remained as the
    top three companies in terms of pharma sales
  • Three relatively smaller players namely Amgen,
    Abbott Labs and AstraZeneca, however, reported a
    double digit growth during 2005 with Amgen
    recording the highest growth rate of 20.5 per
    cent.
  • Pfizer's own sale in the US market fell by 11.8
    per cent to 23.44 billion dollars in 2005 from
    26.58 billion.
  • GSKs US sales fell by 3.5 per cent during 2005.
  • Eli Lilly stood out as the largest spender of RD
    in 2005 with its spending of 20.7 per cent of
    gross turnover. Amgen, another relatively smaller
    player among the 15, has spent 18.6 per cent of
    its turnover on RD. On the other hand, Pfizer's
    RD expenditure declined by 3.1 per cent to 7.44
    billion dollars in 2005 from 7.68 billion.
  • The pharma companies are taking this threat from
    the generic players quite seriously by spending
    more on RD.

14
Analysis of key factors
Price pressures drive consolidations to maintain
earning levels
Sales
Price Pressures limits Industry ability to use
price for growth
Price
Sales
Price
Units
Units
MS
  • Industry continues to
  • consolidate in order to
  • cut infrastructure costs
  • Reduce sales reps
  • Eliminate TA areas
  • in Research
  • Reduce duplication in
  • support functions

MS
RD
RD
GA
GA
EBIT
EBIT
Consolidations protects Earnings growth
Capital value
15
Future Business Impact Assessment
Overview
  • Methodology
  • Risks
  • Opportunities
  • Implications

16
Future Business Impact Assessment
The PHA Model
  • Exclusively developed to study the two companies
    in their competitive environment, understanding
    the impact of future events for their future
    business strategy.
  • Each risk and opportunity assessed in its
    magnitude, considering two additional company
    dimensions

17
Future Business Impact Assessment
Events (risks)
  • Product Recall Litigations
  • Patent Expiration
  • BRIC Competition Generics
  • Free Access Price Dumping
  • Public opinion pressure

18
Future Business Impact Assessment
Risk assessment
Safe Zone
Bubble size denotes event likelihood
Danger Zone
19
Future Business Impact Assessment
Risk assessment
Safe Zone
Bubble size denotes event likelihood
Danger Zone
20
Future Business Impact Assessment
Markets (opportunities)
  • Cancer Treatment
  • Pandemic Bioterrorism
  • Healthcare Animal
  • Online Pharmacy
  • Developing World

21
Future Business Impact Assessment
Opportunity assessment
Addressable
Bubble size denotes market likelihood
Missed
22
Future Business Impact Assessment
Opportunity assessment
Addressable
Bubble size denotes market likelihood
Missed
23
Future Business Impact Assessment
Implications
  • Exposed to animal rights activists and public
    opinion pressure.
  • Betting on pandemic flu vaccine as next large
    pharma opportunity.
  • Reliant on blockbusters and over-the-counter
    medicaments.
  • Heavily exposed to product recall and BRIC
    competition on generics.

24
Future Business Impact Assessment
Summary
  • In the near future, risks for pharma seem higher
    than the opportunities.
  • The best equiped to face the new challenges will
    win.

25
Recommendations
Pfizer 1st Recommendation
  • Pfizer
  • Big company
  • Loose pieces
  • No course of action

Align the business
  • Be clear
  • Vision
  • Mission
  • Strategy
  • Be manageable

Get smaller and align the business
26
Recommendations
Pfizer 2nd recommendation
Co-marketing with generic drug manufacturers
27
Recommendations
Pfizer 3rd recommendation
Go on-line
e-business
Pharmacy
Wholesaler
28
Recommendations
Pfizer 4th recommendation
Promotion Brand or efficacy of product
29
Recommendations
Pfizer 5th recommendation
Research Development Better focus
  • Improve OTC portfolio
  • Avoid entering areas where excellence is reached

30
Recommendations
Glaxosmithkline 1st Recommendation
Research Development CONTINUE
31
Recommendations
Glaxosmithkline 2nd recommendation
Vaccination
Continu efforts
32
Recommendations
Glaxosmithkline 3rd recommendation
Go for prevention
Less sofisticated drugs needed. Competition ?
33
Recommendations
Glaxosmithkline 4th recommendation
  • Focus on neglected diseases
  • HIV/AIDS
  • Tuberculosis
  • Malaria
  • Obesitas Cholesterol
  • etc …
  • Enhance participation in community programmes
  • Animal testing
  • Human testing
  • Image building
  • PR

34
Recommendations
Glaxosmithkline 5th recommendation
Acquisition OTC
Candidate good prospect for product
diversification
35
Opportunities
General for the pharmaceutical market
  • Entering new markets China, East-Europe,
    Latin-America, Vietnam
  • Alliance with BioTech companies Technology,
    innovation

36
Conclusion
Distinguishing markets
Cure market
Prevent market
Future key players Generics manufacturers
Future Key Players Pharma innovators
37
Conclusion
Distinguishing markets
RD Focus
Prevent
Cure
Sales Focus
past
present
future
38
Questions
39
Secondary sources
  • Annual report Pfizer 2005
  • Annual report GSK 2006
  • IMS Health Global Pharma forecast Feb. 2006
  • NYSE, sept.2006
  • MIDAS, new market segmentation Feature Dec. 2005
  • Neil Mahoney - Global Business Management
    Concepts, presentation
  • PharmaBiz, "Struggle of the giants",  May. 2006
  • Wood McKenzie
  • www.imshealth.com
  • www.pharmaexec.com
  • www.chartsbank.com
  • BCG e-Health Reports
  • Wall Street Journal
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