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Copy of Bristol-Myers Squibb
Transcript of Copy of Bristol-Myers Squibb
Competitive Profile Matrix
External Factor Evaluation Matrix
Positioning Map Actual Proposed The five-forces model of competition
Competitive Profile Matrix
External Factor Evaluation Matrix
Positioning Map Financial Ratios Analysis
Internal Factor Evaluation Matrix Introduction/ Case abstract The case explained about Bristol-Meyers Squibb (BMS), a global biopharmaceutical company that discovers and delivers medicine To be in a drug manufacturing business, BMS has to face stiff competition from competitors or risk going out of business due to several reasons The leading and largest product of BMS, Plavix which is use for treatment of hypertension and diabetic, faces a patent expiration. It is very difficult for BMS to be on par with the rest of its competitors in the industry due to the continuation rise of its R&D costs apart from facing a rigid competition from generic drug makers. Vision statement Original According to the case study Bristol-Meyers Squibb does not have publicly available vision statement. After detailed discussion and research, we have decided to propose an effective vision statement for Bristol-Myers Squibb company that fits its image as one of big pharmaceutical companies in the world. Proposed VS To make continuous improvement on producing an excellent pipeline of drugs and put greater effort on fulfilling demand on serious unmet medical needs. We take a pledge to become a leader in pharmaceutical industry while continue improving our drugs for the benefits off all stakeholders. Mission statement is “to discover, develop and deliver innovative medicines that help patients prevail over serious disease”. BMS has more lengthy commitment statement as follows “to our patients and customers, employees, global communities, shareholders, environment and other stakeholders, we promise to act on our belief that the priceless ingredient of our product is the integrity of its maker. We seek transparency and dialogue with our stakeholders to improve our understanding of their needs. We take our commitment to economic, social and environmental sustainability seriously, and extend this expectation to our partners and suppliers Original “To our patients and customers, employees, global communities, shareholders, environment and other stakeholders, we promise to act on our belief that the priceless ingredient of our product is the integrity of its maker. We seek transparency and dialogue with our stakeholders to improve our understanding of their needs and become a world leader in pharmaceutical industry through great research and development (RND) effort. We take our commitment to economic, social and environmental sustainability seriously, and extend this expectation to our partners and suppliers.” Proposed Original Proposed Internal Audit Financial ratio analysis Internal Factor Evaluation Matrix External Audit The five-forces model of competition S.W.O.T Analysis Strengths Weaknesses Opportunities Threats SO Strategies ST Strategies Competitive Profile Matrix SPACE Matrix External Factor Evaluation Matrix Positioning Map Financial position average = [(+3)+(+6)+(+4)+(+2)+(+7)+(+5)] / 6 = 4.5
Industry position average = [(+4)+(+5)+(+3)+(+6)+(+1)+(+7)] / 6 = 4.33
Stability position average = [(-1)+(-2)+(-7)+(-3)+(-3)+(-1)] / 6 = -2.83
Competitive position average = [(-1)+(-2)+(-7)+(-3)+(-1)+(-1)] / 6 = -2.5
Directional vector coordinates: x-axis: 4.33+ (-2.5) = +1.83
y-axis : 4.5 + (-2.83) =1.67 Grand Strategy Matrix Internal-External Matrix Quantitative Strategic Planning Matrix
Significance of Strategy 1: Pursuing a forward integration strategy by acquiring their distributors.
Pursuing a forward integration strategy by acquiring their distributors (in this case McKesson Corporation, Cardinal Health, Inc and Amerisource Bergen Corporation)
BMS can increase its revenues for the coming years. The present distributors have high profit margins. BMS could profitably distribute its own products and price them more competitively by integrating forward.
- BMS can also mark up some profit to lessen their high cost of R&D. Significance of Strategy 2: Pursuing an extensive product development of biologic drugs, which are produced in living cells.
Due to strong performance of R&D and financial position of BMS, it is appropriate to pursue this strategy. This is achievable by utilizing their strong financial performance.
- By pursuing this strategy, BMS can obtain a massive economic reward once they launch a new compound that is widely accepted in the marketplace. This is the major source of BMS’s hefty profit margins. Recommendations and Justifications Based on the QSPM analysis, we recommend that BMS should pursue the second alternative strategy. The difference between biological drugs and normal prescription drugs is that biological drugs can search out the diseased organs or cells that need to be treated. They are showing to have better long term outcomes with fewer costly side effects. Studies show that this leads to quicker recovery time and less additional treatments because they have fewer side effects. Biological drugs are currently more costly but will become cheaper in the future as they are made in larger quantities. S.W.O.T Analysis External Audit Internal Audit Grand Strategy Matrix WO Strategies WT Strategies know-how