SWOT analysis
Strengths:
* Global market leader * Patent protection * Patent protection can help shield a company and their products from competition. This raises the profits a company can earn on those products, because another company can't copy their products without paying a royalty * Blockbuster pipeline * Revived blockbuster credentials in recent years for Lyrica, Sutent and Chantix. This should fuel growth into the future and help develop other notable drugs to create the next generation of blockbuster drugs * Research and Development * A robust research and development organization can introduce new products and services before competitors in order to expand market share and increase revenue. * Innovative Culture * A company with an innovative culture continuously produces new and inventive products. An innovative culture can boost a companies brand value, because consumers associate the company with the latest products. Besides the brand boost, new products can help a company stay competitive in a tough market. If a company has the best product in a segment, they are likely to gain market share in that segment. * Other points to consider: * Lipitor is the first choice of drug for treatment of high cholesterol. * Lipid regulator market will continue to generate high revenues. * Pfizer, leading pharmaceutical company, most profitable * Pfizer has well respected name all over the world and has some of the top research, advertising, financial and marketing talent * Lipitor recommended by American hearth association. * High Cholesterol, which is a common problem across the globe is only likely to increase with rapidly aging population specially in the US and rise in obesity levels.
Weaknesses
* Co-marketing agreement for pfizer: * Co-marketing agreements can limit Pfizer’s global presence, because it results in reduced revenue and payments to Pfizer's for their drugs. They have to share revenue with other parties. * Reliance on few products: * The reliance of a company on too few products can increase their risk to any one of their big products. Risk can come from government actions, safety concerns, supply problems and output problems. These increased risk cause the cost of capital to increase and the value of the firm to decrease. * Drug pipeline: * Since the majority of future earnings is predicted by the drug pipeline, a weak pipeline displays a weak future for revenue growth and earnings possibility. If a pipeline is in trouble, then they must either increase spending on research and development or acquire drugs from other developers. * Unsuccessful Acquisition Business Model: * Large historical growth came from acquisitions. Future growth is depended on acquisitions, which are difficult to maintain and integrate the newly acquired companies. Additionally, companies historically overpay for acquisitions and synergies rarely occur. During times of adverse credit markets, acquisition can be very expensive. Accounting problems usually occur with companies, which use acquisitions to grow their business. Difficult to understand accounting statements increase risk through lack of clarity. Higher risk increases the cost of capital and decreases the value of firms. * Other points to consider: * Company’s financial health is highly dependent on Lipitor, which is dangerous (when patent will expire) * Comapany’s reputation has been tented by association with celebrex, which increases the risk of cardiovascular damage. * Pfizer also manufactures Zoloft, an antidepressant that was widely criticized for over-prescription to teenager, and possibly causing increased suicidal thoughts in this population. The company website now states that the drug is not advised for people under the age of 17.

Opportunities: * Demographic trends: * Favorable demographics favor this market. Health care and peripheral industries will continue to grow for the foreseeable future. The health care industry has positively long term potential, because the average age and absolute number of older people is increasing. Long-term demographics favor an increase in demand for health services worldwide. Consumers are getting older and large in number. * According to CDC, in 2014 every 1 in 5 adults will have high cholesterol as compared to every 1 in 6 in 2008. * Restructuring a Business: * Streamlining the operations and cutting cost may have positive affect on cash flow and growth. It could increase innovation by reducing red-tape and increasing communications throughout the organization. * Other Opportunities * Funding available to facilitate product/company * Acquisitions and in-licensing/co-development opportunities * Pfizer has developed a new AIDS drug called Maraviroc * Lipid Regulator Market Will Continue to Generate High Revenues Threats: * Regulated Business * Government regulation increases the risk to the underlying business and thus increases the risk factors. Regulation increases risk to a business by increasing future uncertainty * Economic Downturn Influencing Purchasing Power of Drugs * The economic downturn is influencing consumer's purchasing power, because when customers lose their jobs or lack money they may be forced to use generic drugs or alternative medicines / procedures. * Exposure to Generic Competition * The US has the Largest Generics Market * International Competition on Rise * Higher international competition could decrease profits and hurt revenue growth. * Merck & Schering-Plough, two of Pfizer's greatest rivals, plan to combine forces and develop a medicine to rival Lipitor. "The planned drug, meant to reduce levels of the harmful type of cholesterol in two ways.