Resources and Capabilities for Competitive Advantage in Pfizer

This report analyzes the resources and capabilities of Pfizer that provide a competitive advantage in the market. It also identifies key changes in the external environment and evaluates the impact of competitive forces on entrepreneurial activities and profitability within the industry.

Strategy, Enterprises and
Innovation

Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
Critical evaluation of resources and capabilities that provides competitive advantage in market
......................................................................................................................................................1
TASK 3............................................................................................................................................3
Identification of key changes in external environment and its impact on entrepreneurial
activities.......................................................................................................................................3
TASK 4 ...........................................................................................................................................5
Using Porter's Five Forces framework and evaluate the impact of the main competitive forces
which are influencing entrepreneurial activities and profitability with in the industry ..............5
CONCLUSION ..............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Replacing and improving organisation processes to enhance productivity and efficiency
as well as to enable the company to extent the quality and range of current product and services.
Creating and developing new or exiting product and services in order to meet dynamic customer
trend, demands and expectation. Innovation is creating by making effective strategy and
executing it in most effective manner is termed as strategic innovation. It refers to a process of
redesigning and reinventing the business strategy to achieve growth, create value for the business
and its customer as well as generate competitive advantage. To define this concept the selected
company is Pfizer which was established in 1952 in UK. The company provides healthcare
services, developing solution and medicines to improve the condition of people as well as it also
working for NHS (Amara, Hong and Hafeez, 2019).
This report cover critically analyse the internal resources and capabilities which provide a
competitive advantage to the company. Further, it highlights the key drivers of change in the
external environment and their impact on the entrepreneurial activities of the company. At last, it
defines the Porter's five forces framework which has great impact on the profitability and
operations of organisation.
TASK 2
Critical evaluation of resources and capabilities that provides competitive advantage in market
VRIO Analysis
VRIO analysis can be described as a strategic framework which help organisation in
identifying various advantages and resources in order to secure a competitive edge. It helps an
organisation in ascertaining the competitive advantage of an organisation. It is beneficial for
managers of Pfizer to make a systematic evaluation of varied tangible as well as intangible
resources streamlining with its value chain (Cao and Chen, 2019). It also help in streamlining
and determining organisation which resources or capabilities it want to keep, delete or enhance.
All the elements in accordance with VRIO analysis are discussed below:
Resources and
Capabilities
Valuable Rare Inimitable Organised Competitive
implication
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Manufacturing
processes
Yes No Competitive
parity
Packaging and
distribution
channel
Yes Yes No Temporary
competitive
advantage
Research and
development
department
Yes Yes Yes Yes Sustained
competitive
advantage
Various resources and capabilities of Pfizer along with their their implication in an effective
manner are as follows:
Valuable- These are those resources of organisation which helps in providing value to
customers. This helps them in grabbing opportunities but only provides competitive parity.
Valuable resources in relevance with Pfizer are as follows:
Manufacturing process are valuable for Pfizer as through this they can access their production
processes effectively and can generate more sales (Chepsarakov, 2022).
Packaging and distribution are considered as a valuable resource as it helps them to reach a
large number of customers through improved supply chain.
Research and development department is valuable for Pfizer as it helps them to gain access
about different medicines and vaccines as per the need of people.
Rare resources are those capabilities which makes the competition in market challenging
but not impossible. This help managers of Pfizer in securing competitive advantage in market. In
accordance with Pfizer these resources are:
Packaging and distribution channel are rare resources for Pfizer as it help them to give a
challenging competition to its rivals.
Pfizer has a well-developed research and development department which helps them to gain
competitive advantage in market.
Inimitable resources can be described as those aspects which are hard to copy by
competitor and when they try to imitate them, it incurs huge cost. These resources in relevance
with Pfizer is its research and development department. As it it well equipped and established as
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well as help them to grab varied opportunities. Inimitable resources help Pfizer in gaining
competitive advantage for a limited period of time.
Organised resources are those which needs assistance of company's system and
processes for securing sustained competitive advantage. In context with Pfizer, these resources
are termed as its research and development department. Through well-equipped research and
development department which closely aligned with their professional as well as experienced
staff, they secure sustained competitive advantage in market for a long period of time.
TASK 3
Identification of key changes in external environment and its impact on entrepreneurial activities
The key changes happening in external environment can be assess and identified by
PESTEL framework. PESTEL analysis is a framework utilised by companies to see a big picture
of their industry. It is a fact based analysis which provides extensive understanding of external
elements of business which helps businesses to make strategic decisions and helps in providing
more business opportunities and minimise risks (Jinsong and Meng, 2021). Pfizer was in the
health industry since 1952. The company has engaged in exploring, developing and producing
healthcare items and has seen major changes happening in operations due to macro changes. The
study of all factors in context to Pfizer is discussed below:
Political- It helps in determining elements that has the power to impact companies long
term profitability. Being a healthcare organization, Pfizer face various government intervention
in their operations. The company is exposed to several type of political risks as involves working
with drugs to manufacture medicines. Pfizer follows all trust laws associated with drug
manufacturer and implements legal frameworks for contract enforcement.
Economical- Inflation level, interest rate, foreign exchange rates or economic situations
decides the approx quantity of investment in healthcare companies. Maximising relaxation of
trade policies helps Pfizer to further invest into more areas. When Covid-19 hit world, the
investment of government in healthcare industry increase which helps the management of
company to further explore in new vaccinations.
Social- The attitude and behaviour of people towards their health and safety resulted in
more profits for healthcare firms. People of UK are really concerned over their health prospects
and safety from various viruses resulting in more recognition of Pfizer as it has been conducting
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its operations from very long time with National healthcare system. Pfizer benefits from social
factors by manufacturing products that gives improved customer experience.
Technological- Technologies are evolving fast and putting great emphasis on healthcare
industry too. There are several technologies which are impacting Pfizer's operations such as
supply channels disruption, innovation in product supplies, rate of technology, access to more
data of consumers etc. Advance technologies help Pfizer to make fast its production process and
minimise cost of production. The management of company brings more developments in mobile
technology which has enhanced customer satisfaction in healthcare firms (Juhong, Ruijun and
Yaqi, 2020).
Environmental- In recent times, it is important for firms to abide by government norms
made for environment protection. Pfizer follows all legal standards and spread awareness in its
customers to protect environment. The company undertakes several environment practices which
alters the manufacturing and innovation in production. Adopting renewable technologies also
helped the firm to be environmental friendly.
Legal- This factor plays significant role in development of Biotechnology and drugs
industry. Healthcare industry must follow certain laws like discrimination laws, anti-biased, data
protection law etc. Pfizer abide by every law related to employment and distribution to remain
legal in law's eyes. The company develop various legal protection acts of intellectual properties,
patents and other copyrights.
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TASK 4
Using Porter's Five Forces framework and evaluate the impact of the main competitive forces
which are influencing entrepreneurial activities and profitability with in the industry
Porter's five forces is a business analytical tool which provide guidance to the manager of
company about the various sources and competition level available in the market which has great
impact on the profitably and operation of company (Schork, 2021). The management of Pfizer
use this tool to determine the level of competition to make effective strategies to meet it
effectively. The analysis helps the company to determine its current position in the dynamic
market based on the elements like customers, competitors, financial strengths, suppliers and
alternate solutions. The Porter's five forces in relevance to Pfizer are as follows-
Competitive rivalry- The competitive rivalry in healthcare industry is high for
medicines but it is not applicable where almost all companies make huge profit. Pfizer is one of
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the most successful and power company in this industry. Also, they conduct best research as well
as development facilities that means they grab the patents for most of all the innovative
medicines. This enable them to protect themselves from the high competition while the patent
allows them to rend high cost or prices for the selling medicines to get return on the cost incurred
on development and research for maintaining high profit margin (Walls, 2021). The real
competitive rivalry is not so high.
Bargaining power of customers- The impact of this force in the pharmaceutical industry
is low because it is directly related with the health and treatment of people. The medicines sold
by the Pfizer are different and effective form other medicines and most of the doctors are
prescribed the medicine of Pfizer so the customer have less choice to buy other brand. They
have to buy the brand of Pfizer at the available price. The company have power to sell their
unique and innovative medicines at high price to cover the cost of development and research as
well as maintain profit margin. That means the bargaining power of customer is low in case of
buying necessary medicine (Yang, Qin, and Moulaert, 2021).
Bargaining power of suppliers- The impact of this factor in pharmaceutical industry is
quite high as the innovation and production of medicine are highly depended on the raw material
supplied by the supplier. To develop innovative and effective medicine for the betterment of
people health the Pfizer have to maintain high quality as well as use high quality of raw material
which are not easily available in the market and are very rare. So the supplier enjoy high
bargaining power and charge high cost to supply rare material to the company. Also, the
machinery and its equipment are rarely and very few available in the market which are essential
for the production process.
Threat of new entrants- To enter in the pharmaceutical industry, the new companies
required to take licence to conduct their operation and face many restriction regarding quality
and effect of medicines. So the impact of this factor on the profitability and operations of Pfizer
is low. Also the human resource as well as financial capital for conducting medicine production
and research is very high which small companies can not afford and the Pfizer operate its
business at very large scale which the new companies fail to compete. So the restriction and
barrier for new entry in this industry is high, the impact of this factor is low on Pfizer (Yew,
2021) .
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Threat of substitute- The impact of this factor in pharmaceutical industry is moderate
or low due to required high quality, research and development for producing medicines. The
Pfizer provides high quality and innovative medicine which is rarely available in the market and
demand of their brand id high as compare to the medicine of competitors (Zu and Zhang, 2022).
The doctor and customer prefer the medicine of Pfizer due to its curable power is high and the
company enjoy high profitability and loyal customer base.
CONCLUSION
As per the presented information, it is concluded that innovation and effective strategy
helps the company to gain competitive advantage as well as earn maximum profit and customer
base. By VRIO analysis the management can identify the internal strengths and weaknesses in
order to get competitive advantage to compete with competitors in dynamic world. By using
PESTLE analysis the management of business can determine their external factor which
influences the profitability, productivity and efficiency of the company. Porter's five forces is a
most power tool which enable the management to get direction for improvement by determining
the competition level and policies of suppliers, competitors to achieve the success.
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REFERENCES
Books and journal
Amara, D.B., Hong, C. and Hafeez, M., 2019. Evaluating the eco-innovation strategy in business
opportunity identification-enterprise business growth nexus. International Journal of
Information Systems and Change Management, 11(3-4), pp.272-291.
Cao, H. and Chen, Z., 2019. The driving effect of internal and external environment on green
innovation strategy-The moderating role of top management’s environmental
awareness. Nankai Business Review International.
Chepsarakov, A.V., 2022. Building An Innovative Strategy For Enterprise
Development. Business Strategies.
Jinsong, Z. and Meng, L., 2021. Environmental Regulation, Optimal Choice Strategy of
Innovation Activities and Enterprise Value in Tobacco Control Cities. Tobacco
Regulatory Science, 7(5), pp.1230-1244.
Juhong, C., Ruijun, Z. and Yaqi, Z., 2020. The effect of servitization strategy on enterprise
performance: Based on the mediating of business model innovation. Science Research
Management, 41(4), p.131.
Schork, S., 2021. Innovation Leadership in the Digital Enterprise: Lessons From Pioneers.
In Handbook of Research on Management and Strategies for Digital Enterprise
Transformation (pp. 86-109). IGI Global.
Walls, A.J., 2021. Design‐Led Innovation: A Framework for the Design of Enterprise Innovation
Systems. Design Management Journal, 16(1), pp.93-110.
Yang, J., Qin, Y. and Moulaert, F., 2021. The influence of employee pressure on the
management cost of enterprise technological innovation using mental health
education. Work, (Preprint), pp.1-10.
Yew, J.L.K., 2021. Family Firms, Enterprise Development and Tacit Knowledge
Transformation: Small and Medium Enterprises (SMEs) Innovation in Malaysia. Global
Business Review, p.09721509211047648.
Zu, Y. and Zhang, R., 2022. Supplier change, market competition and enterprise
innovation. European Journal of Innovation Management.
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