Business Model

Business Model Analysis of a Pharmaceutical Company

[Name of the Course]

Business Model Analysis of a Pharmaceutical Company

Introduction

This essay is alienated into three parts, to critically scrutinize the business model of a multinational pharmaceutical company. The company, which I have chosen, is “Pfizer”; one of the top pharmaceutical companies operating across the globe. An extensive research has been done to set up the foundation of this essay.

The research was conducted through different newspaper articles, magazines and books, online as well as on-paper, to prove my argument academically and factually and to add credibility to this paper. The three step flow of essay has been made in a sequence, from the introduction of business model, to its critical analysis and lastly, the arguments about this model.

Introduction of the Company

Pfizer is the second foremost multinational corporation, operating in the pharmaceutical industry (Pfizer, 2012, p. n.d.). It is an American organization, headquartered in New York City. Founded in 1849, by Charles Pfizer and Charles Erhart, the company is gratifying the needs of healthcare industry from more than 150 years. Initially, the company was founded as the manufacturer of chemicals, however, in 1950; it shifted its centre toward research-based pharmacology (World Market Intelligence, 2012, p. 1).

The company has made a range of acquisitions in 2000s, including Wyeth, Pharmacia and Warner Lambert. Though in 2009, Pfizer was pleaded guilty for illegally marketing a drug, which cost the company $3.6 billion of pay off. This might be the largest consequence every recorded for any crime (Barrett, 2005, p. n.d.).

Defining Business Model Concept

A business model defines a company's pathway towards generating desired revenue. Various business connoisseurs have described business model in different vocabulary; however, have maintained the parallel essence. A business model is principally comprised of two rudiments, firstly, what particular business works and, secondly, how it generates revenue from the market (Anonymous, 2002, p. 3).

In academic conceptuality, business model is architecture for product, service and information flows, including a description of the various business actors and their roles: a description of potential benefits for various business actors, and a description of the sources of revenue (Chesbrough, 2007, p. 1). It is a scheme through which a company derives strategies and tactics to earn the revenue proposed in its plans. Business model simply answer one question, how a company will make money to survive and grow? (Moss, 2007, p. 10).

For pharmaceutical companies, these need to look beyond their reliance on sales forces, development and research innovation to succeed (Moss, 2007, p. 10). Companies of this sector will require building on stronger and effective strategies for branding their offerings and products. Their business model has to comprised of every crucial aspect of business, keeping in focus the demands and views of each stakeholder of the market (Satish, 2007, p. 61).

Pfizer's Business Model

Subsequent to the Second World War, the first ever medicine sold by Pfizer, in the United States was Terramycin, which was primarily an anti-biotic (American Chemical Society, 2009, p. 4). By 1950s, Pfizer had established its multinational units in ...