An Analysis of a Strategic Business Issue within Pfizer

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
[An Analysis of a Strategic Business Issue within Pfizer]
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Executive summary
Strategic deals such as joint venturing between healthcare companies are considered good
practices. Such deals help tackle the challenges of operating in international locations. The
challenges could be anything from regulatory hurdles to market competitors. This study also
addresses a similar topic. It does so about a joint venture between Pfizer and Hisun, which
eventually got ended. As revealed in the study, Pfizer wanted to dominate the Chinese healthcare
market by utilizing the production and commercialization efficiency of Hisun in branded generic
medicines. It was a very potential deal considering it was for tapping on the growing demand for
generic medicines in China as well as abroad. However, the deal had some strategic flaws, which
eventually resulted in an official closure of the deal. Pfizer was found being responsible largely
for the failure as it had no strategies to stand by the weaknesses in both firms. Pfizer had no
assessment of the developments of problems, which became reasons for the closure of the deal.
An issue like data mismanagement, which is a serious offence, was either overlooked by Pfizer
or it has no scope to control such practices. The study also gives a few sets of recommendations
to Pfizer to improve their practices in many such deals to happen in the future.

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Table of Contents
1. A brief introduction to Pfizer.......................................................................................................3
2. The strategic business issue in the context of Pfizer...................................................................3
PESTLE analysis.........................................................................................................................5
2.1 An overview of relevant strategic decisions that led Pfizer quitting its joint venture with
Hisun................................................................................................................................................7
3. Using relevant literature review and other contemporary examples to understand why the
venture with Hisun had strategic implications and the impact on the competitive performance of
Pfizer................................................................................................................................................9
Strategy Clock...........................................................................................................................10
Application of the “Corporate Strategy Directions” model for the organizations.....................12
Identify, if any, Internationalisation drivers..............................................................................13
Apply Porter's Diamond for the organizations..........................................................................14
In the alliance – which of the two companies has the most fair strategy..................................15
4. Conclusions................................................................................................................................16
5. Recommendations......................................................................................................................17
References......................................................................................................................................19

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1. A brief introduction to Pfizer
Pfizer is a public listed multinational pharmaceutical corporation headquartered in New
York City. Pfizer is one of the world’s largest pharmaceutical companies. Fortune ranked Pfizer
57th largest revenue-generating company in the United States. It has been into strategic alliances
with the world's renowned names in the Pharmaceutical industry such as GlaxoSmithKline and
Hisun. It produces medicines and vaccines for cardiology, oncology, neurology and
endocrinology. Some of its products are Lipitor used to control and reduce the blood cholesterol
level, Lyrica for fibromyalgia and neuropathic pain, Diflucan for treating antifungal diseases,
Zithromax used as an antibiotic, and Celebrex used as an anti-inflammatory drug (Pfizer.com,
2019).
The main purpose of this task is to analyze the issue that ended the joint venture between
Pfizer and Hisun. To serve the purpose the relevant literature review will be used. Besides, few
relevant management models or frameworks will also be used to assess the reasons that
compelled Pfizer to develop a joint venture with Hisun. The use of suitable management models
or frameworks will continue in regards to assessing the impacts of the joint venture on the
competitive advantage of Pfizer.
2. The strategic business issue in the context of Pfizer
The strategic business issue in this study is an unsuccessful strategic alliance between
Pfizer and Hisun. In addition to assessing the factors that affected the venture, the section will
also identify the facts that might have compelled Pfizer to venture with Hisun. All problems for
the venture started with a ban on US drug exports from Zhejiang Hisun Pharmaceutical plant in

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Taizhou city. Hisun Pharmaceutical plant is not alone to have faced the ban. There are 38 more
drug manufacturing facilities in China to have been disallowed from exporting drugs to the
United States (Pharmaceuticalintegritycoalition.org, 2019). The situation could not have been
that bad for Hisun Pharmaceutical plant and others also had Hisun cooperated with the FDA in
their investigation session and followed strict guidelines of international bodies on the data
integrity issue. In investigations, FDA could find the trace of data mismanagement at Hisun
Pharmaceutical plant. When they dug deeper into this matter they could find intentionally
hammered disks, which might have contained some important data. It was also being found that
a quality analyst had removed disks to delete data of failures when tested on a high-performance
liquid chromatography (HPLC) computer (Fiercepharma.com, 2019).
Having been involved in data integrity issue is less big a problem than adopting unethical
ways to suppress any evidence of test failures in possible ways. Hisun constantly denied any data
mismanagement at the Hisun Pharmaceutical Plant in China. When being found to have
tempered some important data of test failures Hisun played with its employees and blamed one
of its employees for all this. According to Hisun, it is due to the inefficiency of an employee that
caused use to loose such vital data of test failures. According to them, they could have taken
strict actions against the data integrity issue had they found it (Fiercepharma.com, 2019). On the
contrary, investigation officers from the FDA confirmed the involvement of one of the Quality
Analysts of Hisun Pharmaceutical Plant in China. These are some serious concerns to a
Company of Pfizer’s stature. Pfizer, one of the leading drug makers in the world joined hands
with Hisun thinking to offer Branded Generic Medicines to people in China and countries across
the globe (Business-news-today.com, 2019). However, the series of data integrity issues at the
Hisun Pharmaceutical Plant in China forced Pfizer to think of the JV (Joint Venture). Nothing

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could be worse for a deal than having complaints pouring from the customers and international
bodies like FDA regarding the data integrity issue. The issue reached the height when customers
became aware of the issue. As confirmed by the FDA, few customers complained regarding the
microbial results. The results were found as out of spec on testing the company's API
(Fiercepharma.com, 2019). It is very difficult for a globally renowned Company such as Pfizer to
continue with a partner who is receiving a series of criticisms from the FDA and the customers
as well. Understandably, when customers are losing their trust on the genuineness of the drugs
there is no point in selling them the Branded Generic Drugs. Customers will nothing but doubt
on each of the offerings coming out of the JV (Shabbir, Malik & Malik, 2016). Eventually, Pfizer
had to look for an exit from this JV to keep its reputation alive.
PESTLE analysis
In this section, the probable factors in China considered by Pfizer while tying up with
Hisun will be discussed.
Political
The political landscape in China laid by the Chinese government and the political parties
is very healthy for development works in the healthcare sector (Ambler, Witzel & Xi, 2016).
This is one of the reasons why Pfizer got attracted to creating a joint venture with Hisun. Pfizer
has a long back association with the country. Pfizer is one of the leading and renowned names in
China in terms of producing and supplying vaccines and medicines to people in China (Ambler,
Witzel & Xi, 2016). The venture with Hisun was seen as an opportunity in the field of generic
medicines.