Doing Business Globally: Pfizer and Hisun Pharmaceutical Partnership

This report provides a comprehensive analysis of the business partnership between Pfizer Inc. and Zhejiang Hisun Pharmaceuticals, focusing on the challenges and complexities of doing business globally. The study examines the external issues and trends driving the partnership, including the potential of the Chinese generic drug market. It identifies expected benefits and synergies for both companies, while also addressing the reasons behind government involvement. The report delves into the risks associated with the partnership, comparing and contrasting it with Pfizer's partnership with Hospira. A significant portion of the analysis is dedicated to exploring the cultural differences between the US and China, particularly in organizational culture, and their impact on the partnership's success. The report also discusses the effects of exchange rate behavior and identifies key challenges in international business, offering insights into their impact on learners and the future of global business. Appendices include detailed analyses such as PESTEL, SWOT, VRIN, value chain, and Hofstede's cultural dimensions, providing a robust framework for understanding the partnership's dynamics and outcomes.

Running head: DOING BUSINESS GLOBALLY & INTERNATIONALLY
Doing Business Globally and Internationally
[Business Partnership Between of Pfizer Inc. with Zhejiang Hisun Pharmaceuticals]
Name of the student:
Name of the university:
Author note:

1DOING BUSINESS GLOBALLY & INTERNATIONALLY
Executive summary-
The study is aimed at understanding the different factors, which influence the business performance.
The purpose is being served through the example of joint venture between Pfizer and Hisun. The
venture has however failed to deliver on the set expectations. The paper identifies few reasons for
failure. Cultural difference in specific the organizational culture is being shown as one of the reasons
for failure.

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Table of Contents
Introduction-....................................................................................................................................4
Part A: Answer to Question 1-.........................................................................................................4
1.1 Important external issues & trends driving the partnership-.............................................4
1.2 Area of expected benefits & synergies for both the companies-.......................................6
1.3 Reason behind the involvement of Chinese and US governments-...................................7
2. Describing the partnership-......................................................................................................8
2.1 Explaining the associated risks-.........................................................................................8
2.2 Comparing & contrasting this with Pfizer Inc.’s recent partnership with Hospira-..........9
2.3 Justifying the views-..........................................................................................................9
3. Analyzing the cultures involved-.............................................................................................9
3.1 Corporate culture in Pfizer and Hisun-............................................................................12
3.2 Organization culture:.......................................................................................................13
3.3 Impact on the partnership-...............................................................................................14
4. Critical discussion of the possible effects of the exchange rate behavior-............................15
Part B:............................................................................................................................................16
5. Three challenges of doing business internationally-.............................................................16
5.1 Impact of challenges on a learner-...................................................................................17
5.2 Impact on the future of international business-...............................................................18
Conclusion-....................................................................................................................................18

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References-....................................................................................................................................20
Appendix-......................................................................................................................................28
1. Hofstede’s cultural dimension for the United States and China-..........................................28
2. PESTEL analysis of the USA pharmaceutical industry-.......................................................28
3. PESTEL of China pharmaceutical industry-.........................................................................31
4. Porter's five forces of pharmaceuticals industry in China and USA-....................................34
China:-...................................................................................................................................34
USA:-.....................................................................................................................................36
5. VRIN analysis of Pfizer and Hisun-......................................................................................37
6. Value chain for Pfizer and Hisun-.........................................................................................39
7. SWOT analysis of Pfizer & Hisun:-......................................................................................42
8. Charles Handy Model:...........................................................................................................45

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Introduction-
The partnership working is a boom in the global pharmaceutical industry. There can be many
reasons for it; however, moving beyond the patent medicine concept is one of those that attract
Multinational Corporation towards it. Multinational companies wish to continue with their highest
selling product even after the expiring of patent medicine. Commercializing the off-patent medicine
has become a source of good business (Lezaun & Montgomery, 2015). The same purpose has driven
the interest of Pfizer and Hisun for a collaborating business. Both the companies have analyzed the
business opportunities with the off-patent medicine. The result of such interest has produced one of
the most notable joint venturing the global pharmaceutical industry has ever witnessed
(Press.pfizer.com, 2017). The main purpose of this assignment is to analyze the challenges, which is
there in partnering business.
Part A: Answer to Question 1-
(Refer to Appendix 2)
The analysis does provide some supportive facts that may prove the business relationship of
Pfizer with Hisun a success. Developing countries such as China is a potential market for generic
medicines. The reasons behind the facts include the stable local government policies for off-patent
medicines, developing infrastructure, demand for such medicines etc. However, the business
relationship needs to have a plan to counter the various environmental challenges such as proper
disposal of unwanted medicines as these are extracted through urination. A significant amount of
medicines is disposed through urination and pollute the rivers and the surrounding environment. Eco-
friendly drugs will be the potential answer to the identified challenge (Cameron et al., 2012).
1.1 Important external issues & trends driving the partnership-

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a) Macro & micro environmental analysis-
Macro environmental analysis-
(See Appendix 2 & 3)
Micro environmental analysis-
(See Appendix 4)
b) Internal analysis-
VRIN of Pfizer & Hisun-
(See Appendix 5)
Value chain of Pfizer & Hisun-
(See Appendix 6)
c) Analysis based on SWOT, PESTEL, 5 Forces, Value Chain and VRIN-
(See Appendix 2 to 7)
The joint venture between Pfizer and Hisun is one of the biggest deals in the global
pharmaceutical industry. The deal has probable been done to satisfy the needs of individual. Pfizer
has probably done the deal after getting encouraged from the prospects of generic medicines in
developing nations such as China. China is one of the biggest platforms for generic medicines. Hisun
is the leader in generic medicines in China. The mentioned facts have probably attracted Pfizer
towards the deal (Cameron et al., 2012). However, it could not turn up as expected. The dropping
profits of Hisun especially in the US market have probably encouraged the deal to fail. The huge

6DOING BUSINESS GLOBALLY & INTERNATIONALLY
reduction in supply of doses is probably one of the reasons. However, Pfizer has ensured that the
company will keep on providing the technological and legal support to generic drug manufacturing at
the global platform. The generic drugs will now be manufactured locally in China (Huang et al.,
2013). The joint venture deal had looked a potential move due to the fact that Hisun is a leading firm
in China in manufacturing of generic drugs and the generic drugs are picking up in demand at the
global level especially in the developing nations. The deal would have benefitted Hisun from the
technological and the legal perspectives both in China and at the global level. However, it could not
prove wonder for Hisun as the supply of doses had dropped in US and that had encouraged Pfizer to
move out of the deal (Fiercepharma.com, 2017).
1.2 Area of expected benefits & synergies for both the companies-
Following are the expected benefits of the joint venturing in between the Hisun and Pfizer:
 Will be one of few resources to provide high-quality and inexpensive medicines to the people
at the global platform (Press.pfizer.com, 2017)
 Joint venture will be benefitted by Pfizer through an efficient R&D process, international
standard for market promotion, operational capabilities and manufacturing quality
management (Press.pfizer.com, 2017)
 Joint venture will be benefitted in China as the country has 70% of the entire domestic
pharmaceutical industry for off-patent medicines (Press.pfizer.com, 2017)
Synergies:
(See appendix 7)
The joint venturing was a result of mutual benefits for both Pfizer and Hisun. Hisun had
aimed to get benefits of research & development (R&D) expertise, the technological background and

7DOING BUSINESS GLOBALLY & INTERNATIONALLY
the legal supports at the global platform. In this way, Hisun could have expanded in few other
markets at the global level. On the other hand, Pfizer had aimed to get a good understanding of
Chinese market for generic drugs. Nevertheless, China is a highly potential market for generic drugs.
Hisun is a leading name in China in terms of manufacturing the generic drugs. In this way, the joint
venture had probably happened to get the expected benefits to both the partnering companies.
1.3 Reason behind the involvement of Chinese and US governments-
There can be many reasons such as the prospering demand for the off-patent medicine in the
world especially in emerging countries. China is a highly potential market for generic medicines
probably because such medicines are cost-effective and high in quality (Hassali et al., 2014).
Pharmaceutical industry is a key sector, which significantly contributes in the local economy. Hisun
is a leading name in China for generic drug manufacturing. The joint venture was supposed to allow
a wider exposure to different market, access to advanced research & development (R&D) process
and the legal support at the global platform. Additionally, the joint venture will allow increased
investments by Pfizer in generic manufacturing. This was thought as a better opportunity to produce
an advanced in technology and cheaper generic medicines to both the Chinese and the global
customers. Such facts had probably attracted the Chinese government to support the joint venture
between Pfizer and Hisun (Barber et al., 2013).
External circumstances in the United States were not so favorable at the time when the joint
venture between Pfizer and Hisun had happened. Customers were found eager for such medicines as
they had found supports on chronic diseases like cardiovascular system at a much cheaper rate.
However, the manufacturing of generic medicines was not supported full heartedly. This is because
the manufacturers in the US were asked to prove their stand as much profitable as the expensive
branded patent medicines (Comanor & Scherer, 2013). This has probably prepared a platform to look

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for other markets. Nevertheless, to the United States government, the joint venture between Pfizer
and Hisun was a much better deal as this will allow to flourish the business prospect of Pfizer and
hence the economy of the US. Moreover, the deal was supposed to be a productive option in terms of
getting access to the manufacturing of generic medicines. This will allow them to supply medicines
at the global platform especially in emerging nations (Comanor & Scherer, 2013).
2. Describing the partnership-
The partnership had looked indeed a potential move. This will help Hisun to reach to a global
platform, which has not happened before due to the incompetent efficiency. However, the company
will now have the advanced R&D and lot more in the form of Pfizer (Press.pfizer.com, 2017). This
will provide opportunity to the company to operate at a global platform. Additionally, the company
will also grow in the domestic market (Comanor & Scherer, 2013).
This was a positive move for Pfizer as well. The company got the opportunity to enter the
Chinese market. The country has a wider prospect for the generic drugs (Sun, 2013). Pfizer had
supposedly got a potential market. This was supposed to be beneficial for both the company and the
United States. The success of joint venturing was also supposed to be good for relationship between
the United States and China that has never been friendlier (Lieberthal & Jisi, 2012).
2.1 Explaining the associated risks-
There are several associated risks with such joint venturing between Pfizer and Hisun. One
of such risks can be the difference in the organizational culture that can also affect the objectives
behind the joint venturing. Both Pfizer and Hisun have different objectives behind the joint
venturing. Sufficient leadership tends to miss at the earlier stages of the relationship (Zhao, Hwang &
Yu, 2013).

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2.2 Comparing & contrasting this with Pfizer Inc.’s recent partnership with Hospira-
The Pfizer’s Inc. recent partnership with Hospira may be different to the joint venturing
relationship between Pfizer and Hisun in following ways:
 Hospira is a United States based company and hence, there will not be many cultural
conflicts as it is in case of Pfizer-Hisun (Jackson & Wang, 2013)
 The partnership will provide Pfizer a dominant position in producing the generic sterile
injectables (Pfizer.com, 2017)
 The market is expected to grow for generic sterile injectables by 2020. The estimated value
could be around $20 billion in 2020 (Pfizer.com, 2017). On the other hand, the partnership
business with Hisun is surrounded by certain risk factors such as the cultural differences
(Jackson & Wang, 2013)
 Additionally, Pfizer and Hospira will be together to manufacture a difficult to produce life-
saving sterile injectables (Pfizer.com, 2017)
2.3 Justifying the views-
Cultural differences are a barrier to business success (Gesteland, 2012). Additionally, the
relationship between China and the United States may also affect the joint venturing. Hospira has lost
its stock trading on the New York Stock Exchange (Pfizer.com, 2017). This will indeed be beneficial
for Pfizer as the company will have a much-needed control in the joint operation. This is never
possible in the joint venturing operation with Hisun, which had a 51% shares in the venturing
(Pfizer.com, 2017).
3. Analyzing the cultures involved-

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Hofstede's cultural dimension- a comparative analysis of business cultures in the United States and
China has been attached to the appendix section.
Power Distance-
China scores double to the United States in terms of power distance, which means that
leadership is much respected in China. This further means that an easy interaction with the leaders
will be comparatively tougher in China. The cultural dissimilarities in between the United States and
China might bring communication gap, which is not a very good sign for a progressive business.
Americans are very casual while interacting with the leaders. They might find this difficult to interact
with the counterpart in China (Jackson & Wang, 2013). An integrated approach is indeed required to
run a successful joint venturing (Damanpour et al., 2012).
Individualism-
Individualism is very low in China in comparison to the United States. This means that self-
values are least addressed in China. This discourages the making of innovation. This is highly
evitable in terms of joint venturing. Joint venturing is not just a collaboration of two companies. It is
rather a collaboration of two distinguish culture. China differs to the United States in a large degree
in terms of individualism. Chinese are less expressive; however, the Americans are high in
expressions. The collaboration of innovation will there be of no mean in the joint venturing of Pfizer
with Hisun (Pudelko Tenzer & Harzing, 2014).
Masculinity-
Both China and the United States are more or less equal in terms of masculinity. This means
both the countries are competitive in nature. Competitive skills will probably help the joint venturing;
however, the other identified differences might not allow flourishing the partnership business.

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Competitiveness can become productive if both the partners are walking down the same line. Both
Pfizer with Hisun has different strengths. A collaboration of different strengths will probably serve to
the good outcome; however, the identified cultural differences might impose stoppages to the
objective (Vaara et al., 2012).
Uncertainty Avoidance-
Uncertainty avoidance states the level of ignorance that a culture has for an uncertain future.
The United States is little ahead of China in avoiding the unexpected future. Ignoring the unexpected
future can prove to be a good mean to success. This is because such cultures will be progressive in
their purpose. Thinking much about the unexpected future might hamper the making of creative
skills, which has become a key to success in the contemporary business world (Vaara et al., 2012).
The joint venturing between Pfizer and Hisun needs a lot of creative strategies as both the companies
have different capabilities. Utilization is possible only when both are progressive and less worrying
about an uncertain future. This is indeed not the case in the joint venturing of Pfizer and Hisun.
Long-term Orientation-
Chinese is much more focused on the long-term orientation. This means they are focused on
long-term business objectives. On the other hand, business in the United States is more inclined
towards short-term goals. This is indeed a threatening signal for the venturing between the two
different companies. There are ample of cultural differences between the United States and China. In
such scenario, this can be assumed that Pfizer can think of quitting the joint venturing business with
Hisun at any point in time. If the expected success is not attained Pfizer can opt the exit from the
partnership business (Kvedaraviciene & Boguslauskas, 2015).
Indulgence-