WAC No. 21 (SM) Asad Ameen 11108124

Muhammad Mustafa Khan 11108123 WAC No. 21 (SM) Asad Ameen 11108124

23

WAC STRATEGIC MANAGEMENT

CASE NO. 21BRISTOL-MYERS SQUIBB-2011

GROUP MEMBER:-

MUHAMMAD MUSTAFA KHAN 11108123ASAD AMIN 11108124

BRISTOL-MYERS SQUIBB-2011Bristol-Myers Squibb (BMS) is a leading manufacturer of pharmaceutical, consumer, and nutritional products, it is a global biopharmaceutical company, which discovers and delivers medicine. BMS employs over 30,000 individuals. It is a world leader in many markets in which it competes and is dedicated to preeminence and market leadership in its core pharmaceutical business. 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.It is very difficult for the BMS to be on par with the rest of its competitors in the industry due to continuation rise of its R&D costs a part from facing a rigid competition from generic drug makers.MISSION STATEMENT:-The mission statement of BMS is:-To discover, develop and deliver innovative medicines that help patients prevail over serious diseases.ANALYSIS OF MISSION STATEMENT:-Nine components of mission statement:- Customers: - Customers (Patients) are mentioned in the statement. Products or services: -Innovative medicines are mentioned in the mission statement. Markets: - Communities arenot mentioned in which BMS is going to compete. Technology:- Nothing is mentioned about thetechnology Concern for the survival, growth and profitability: -Nothing is mentioned. Philosophy:-Nothing is mentioned. Self-concept:- BMS discovers innovative medicines. Concern for public image: - admit their responsibility towards society (economic, social, environmental sustainability.). Concern for the employees: -Nothing is mentioned.

VISION STATEMENT OF BMS:-Bristol Meyers Squibb-2011 does not have mission statement that is publicly (currently available) in the case study.OBJECTIVE STATEMENT OF BMS:- Commitment:-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. Patients and customersWe commit to scientific excellence and investment in biopharmaceutical research and development to provide innovative, high-quality medicines that address the unmet medical needs of patients with serious diseases. We apply scientific rigor to produce clinical and economic benefit through medicines that improve patients lives. We strive to make information about our commercialized medicines widely and readily available. EmployeesWe embrace a diverse workforce and inclusive culture. The health, safety, professional development, work-life balance and equitable, respectful treatment of our employees are among our highest priorities. Global communitiesWe promote conscientious citizenship that improves health and promotes sustainability in our communities. ShareholdersWe strive to produce sustained strong performance and shareholder value. EnvironmentWe encourage the preservation of natural resources and strive to minimize the environmental impact of our operations and products.

STRATEGIES:- Bristol-Myers Squibb is evolving its strategic focus in R&D to ensure continued leadership in delivering innovative medicines for patients with serious disease. At Bristol-Myers Squibb, Bio-Pharma strategy uniquely combines the reach and resources of a major pharma company with the entrepreneurial spirit and agility of a successful biotech company. With this strategy, they focus on customers needs, giving maximum priority to accelerating pipeline development, delivering sales growth and continuing to manage costs.Besides this following strategies are currently operated Product development Diversification (related) Forward integration.PROPOSED MISSION STATEMENT FOR BMS:-An emerging biopharmaceutical company dedicated to the research, development and commercialization of innovative proprietary active pharmaceutical ingredients (API)for patients with severe and life-threatening rare diseases.PROPOSED VISION STATEMENT FOR BMS:-To embody global pharmaceutical leadership through innovation, culture and growth guided by an unwavering commitment to significantly improve the lives of patients.Innovationbased on bold leadership in science and medicine resulting in the discovery, development and delivery of high-quality, differentiated products focused on patient needs. Aculturebased on good corporate citizenship that empowers employees through collaboration, inclusion, trust and timely decision making. Sustainablegrowthin corporate value by leveraging core therapeutic areas, and an industry-leading pipeline and product portfolio.

EXTERNAL OPPORTUNITIES AND THREATS:-OPPORTUNITIES:-1) Security technologies to make packaging and products less vulnerable to counterfeiting and to secure their movement within the supply chain.2) Generic drugs are only slightly less expensive than branded ones in Japan and Europe.3) FDA will often allow drugs to become OTC drugs as their patent ends.4) Specialty drugs have accounted for close to 2/3 of all new drugs launched.5) An integrated team addresses counterfeiting, product tampering, theft and diversion issues6) Expand accessto its products through strategic acquisitions & partnerships.7) FDA approval for BMY drug Yervoy to fight melanoma.8) Global pharmaceutical sales are expected to expand up to 7 percent over 2011.9) Pfizers Lipitor and Lillys Zyprexa patents expire in 2011.

THREATS:-1) The company acquires biotech companies, technology and expertise and hence a threat to its culture is infused ever more deeply.2) FDA requires 3 phases of expensive human testing before a drug can be approved.3) Many competitors in the market with Pfizer being the largest yet only having 8% of the market.4) Counterfeit drugs and product tampering, theft or diversion represent a threat5) Patent infringement in developing countries not honoring patents from other nations.6) With regulations it can take 12 to 15 years from time patent is received until the drug hits the market.7) For every 5,000 compounds discovered only one reaches the pharmacists shelf.8) Less than 1/3 of all marketed drugs achieve enough commercial success to recoup their R&D investments. 9) Pricingpressures.10) Global economic slowdown.COMPETITIVE PROFILE MATIX:-

Competitive Profile Matrix (CPM)

BMS (Our Company)Mass PharmaCompetitor

Critical Success FactorsWeightRatingScoreRatingScoreRatingScore

Advertising0.0620.1230.1800.00

12 manufacturing plants worldwide and conducts R&D in 4 countries0.1520.3030.4500.00

Customer Service0.1020.2030.3000.00

Co-development and co-commercialization agreements with companies0.1030.3010.1000.00

R&D0.1020.2010.1000.00

market share0.2030.6030.6000.00

Financial Profit0.1020.2030.3000.00

String of new technologies, alliances has strengthened the brand0.1030.3030.3000.00

Corporate strategy with the acquisition of many other companies0.0920.1810.0900.00

00.0000.0000.0000.00

00.0000.0000.0000.00

00.0000.0000.0000.00

Totals1.002.402.420.00

REASON FOR ALLOCATION:-Global expansion of 12 manufacturing plants in 4 countries is given a weight of 0.15 , because it is the key success factor for any business, and BMS is given a rate of 2.Similarly other factors like Customer Service is given a weight of 0.10, and BMS is given rate of 2 in this respect. A part from it Co-development and co-commercialization agreements with companies is given a weight of 0.10 and BMS is given a rate of 3in this respect, as they all are the critical success factors.EXTERNAL FACTOR EVALUATION MATRIX:-

OpportunitiesWeightRatingWeighted Score

1. Security technologies to make packaging and products less vulnerable to counterfeiting 0.1040.40

2. Generic drugs are only slightly less expensive than branded ones in Japan and Europe.0.0520.10

3.FDA will often allow drugs to become OTC drugs as their patent ends.0.0520.10

4. Pfizers Lipitor and Lillys Zyprexa patents expire in 2011.0.0930.27

5. Global pharmaceutical sales are expected to expand up to 7 percent over 2011.0.0320.06

6.00.0000.00

7.00.0000.00

8.00.0000.00

9.00.0000.00

10.00.0000.00

ThreatsWeightRatingWeighted Score

1. The company acquires biotech companies, technology and expertise and hence a threat to its culture is infused ever more deeply.0.1020.20

2. FDA requires 3 phases of expensive human testing before a drug can be approved.0.1830.54

3.Patent infringement in developing countries not honoring patents from other nations.0.1530.45

4. Less than 1/3 of all marketed drugs achieve enough commercial success to recoup their R&D investments. 0.1530.45

5.Counterfeit drugs and product tampering, theft or diversion represent a threat0.1020.20

6.00.0000.00

7.00.0000.00

8.00.0000.00

9.00.0000.00

10.00.0000.00

TOTALS1.002.77

REASON FOR ALLOCATION:-Security technologies to make packaging and products less vulnerable to counterfeiting is given a weight of 0.10 and rate of 4.Like-wise Pfizers Lipitor and Lillys Zyprexa patents expire in 2011 is given a weight of 0.09 and rate of 3, All these are the most important opportunities.FDA requires 3 phases of expensive human testing before a drug can be approved is given a weight of 0.18 and rate of 3, it is threat.BRISTOL-MYERS SQUIBB-2011 STRENGTHS AND WEAKNESSES:-STRENGTHS1) BMY has 12 manufacturing plants worldwide and conducts R&D in 4 countries.2) Co-development and co-commercialization agreements with companies have boosted image3) Inventory turnover of 4.1 versus industry average of 2.7.4) BMY bought Amira Pharmaceuticals in 2011.5) Deliver newmedicinesregularly6) Provide free medications to qualifying patients with financial problems in the U.S.7) Employ 44000 people all over world, strong global footprint8) String of new technologies, alliances has strengthened the brand9) Produce a wide range of drugs to treat, HIV, Diabetes, Bi Polar Disorder among many others.10) Low debt to equity ratio of 0.34.11) Plavix provides protection against heart attack and stroke accounts for $6 billion in sales annually. 12) Many key drugs were approved in 2011 and many more are expected to be approved in 2012.13) Corporate strategy with the acquisition of many other companies

WEAKNESSES:-1) Strong dependence on working with third parties to improve and enhance abilities.2) Have not expanded into emerging markets well enough.3) Goodwill and intangibles account for over 50% of equity4) Substantial drop in sales for two key drugs: Plavix, a blood thinner, and Pravachol, a cholesterol-lowering drug.5) Revenue isnt competitive enough to compete with R&D expenditures such as other top companies like Pfizer and Merck. 6) BMY is not in the top 10 of US based sales in 2010 for pharmaceutical companies.7) Company layoffs and post retirement plans may affect employee relations.

INTERNAL FACTOR EVALUATION MATRIX:-

Internal Factor Evaluation Matrix (IFE)

StrengthsWeightRatingWeighted Score

1. BMY has 12 manufacturing plants worldwide and conducts R&D in 4 countries.0.1040.40

2. BMY bought Amira Pharmaceuticals in 2011.0.1030.30

3.String of new technologies, alliances has strengthened the brand0.1030.30

4. Many key drugs were approved in 2011 and many more are expected to be approved in 2012.0.1540.60

5. Produce a wide range of drugs to treat, HIV, Diabetes, Bi Polar Disorder among many others.0.0830.24

6.00.0000.00

7.00.0000.00

8.00.0000.00

9.00.0000.00

10.00.0000.00

WeaknessesWeightRatingWeighted Score

1. Strong dependence on working with third parties to improve and enhance abilities.0.0520.10

2. Have not expanded into emerging markets well enough.0.1010.10

3.Company layoffs and post retirement plans may affect employee relations.0.0720.14

4.Substantial drop in sales for two key drugs: Plavix, a blood thinner, and Pravachol, a cholesterol-lowering drug.0.1010.10

5. Revenue isnt competitive enough to compete with R&D expenditures such as other top companies like Pfizer and Merck. 0.1520.30

6.00.0000.00

7.00.0000.00

8.00.0000.00

9.00.0000.00

10.00.0000.00

TOTALS1.002.58

REASON FOR ALLOCATION:-Many key drugs were approved in 2011 and many more are expected to be approved in 2012 is given a weight of 0.15 and rate of 4.Similarly BMY bought Amira Pharmaceuticals in 2011 is given a weight of 0.10 and rate of 3, as they are most important strengths. Company layoffs and post retirement plans may affect employee relations is given a weight of 0.07 and rate 0f 2, as it is important weakness.

SWOT MATRIX:-STRENGTHS1) BMY has 12 manufacturing plants worldwide and conducts R&D in 4 countries.2) Co-development and co-commercialization agreements with companies have boosted image3) Inventory turnover of 4.1 versus industry average of 2.7.4) BMY bought Amira Pharmaceuticals in 2011.5) Deliver. Newmedicinesregularly.6) Provide free medications to qualifying patients with financial problems in the U.S.7) Employ 44000 people all over world, strong global footprint8) String of new technologies, alliances has strengthened the brand9) Produce a wide range of drugs to treat, HIV, Diabetes, Bi Polar Disorder among many others.10) Low debt to equity ratio of 0.34.11) Plavix provides protection against heart attack and stroke accounts for $6 billion in sales annually. 12) Many key drugs were approved in 2011 and many more are expected to be approved in 2012.

WEAKNESSES1) Strong dependence on working with third parties to improve and enhance abilities.2) Have not expanded into emerging markets well enough.3) Goodwill and intangibles account for over 50% of equity4) Substantial drop in sales for two key drugs: Plavix, a blood thinner, and Pravachol, a cholesterol-lowering drug.5) Revenue isnt competitive enough to compete with R&D expenditures such as other top companies like Pfizer and Merck. 6) BMY is not in the top 10 of US based sales in 2010 for pharmaceutical companies.7) Company layoffs and post retirement plans may affect employee relations.

1) OPPORTUNITIES2) Security technologies to make packaging and products less vulnerable to counterfeiting and to secure their movement within the supply chain.3) Generic drugs are only slightly less expensive than branded ones in Japan and Europe.4) FDA will often allow drugs to become OTC drugs as their patent ends.5) Specialty drugs have accounted for close to 2/3 of all new drugs launched.6) An integrated team addresses counterfeiting, product tampering, theft and diversion issues7) Expand accessto its products through strategic acquisitions & partnerships.8) FDA approval for BMY drug Yervoy to fight melanoma.9) Global pharmaceutical sales are expected to expand up to 7 percent over 2011.10) Pfizers Lipitor and Lillys Zyprexa patents expire in 2011.

1) THREATS2) The company acquires biotech companies, technology and expertise and hence a threat to its culture is infused ever more deeply.3) FDA requires 3 phases of expensive human testing before a drug can be approved.4) Many competitors in the market with Pfizer being the largest yet only having 8% of the market.5) Counterfeit drugs and product tampering, theft or diversion represent a threat6) Patent infringement in developing countries not honoring patents from other nations.7) With regulations it can take 12 to 15 years from time patent is received until the drug hits the market.8) For every 5,000 compounds discovered only one reaches the pharmacists shelf.9) Less than 1/3 of all marketed drugs achieve enough commercial success to recoup their R&D investments. 10) Pricingpressures.11) Global economic slowdown.

SO:-S4,O6As BMY bought Amira Pharmaceuticals that willexpand accessto its products through strategic acquisitions & partnerships.

S1,O9

BMY has 12 manufacturing plants worldwide and conducts R&D in 4 countries that will lead to increase in revenue because on the other hand Pfizers Lipitor and Lillys Zyprexa patents expire in 2011.

S5,O2Deliver medicines on the regular basis, similarly Generic drugs are only slightly less expensive than branded ones in Japan and Europe, so both leads to increase in revenue of BMY.

WO:-W2,O3If BMY expanded into emerging markets well enough then it will lead to increase in market share as compare to competitors.

W4,O1Capitalize on growing marketing

ST:-S8,T1String of new technologies, alliances has strengthened the brand, The Company acquires biotech companies, technology and expertise and hence a threat to its culture is infused ever more deeply.

S1,T6Start production of generic OTC drugs

S9, T8Wide range of products helps to achieve commercial success to recoup R&D investments.

WT:-W3,T3Add a division for the production of OTC drugs for $200M

W2,T10Should lead to expansion.

SPACE MATRIX:-X-axis1.2

Y-axis-0.8

FP

ConservativeAggressive

7

6

5

4

3

2

1

CPIP

-7-6-5-4-3-2-11234567

-1

-2

-3

-4

-5

-6

-7

DefensiveSPCompetitive

EXPLANATION:-Results show that BML lies in the conservative quadrant of space matrix, so following strategies are suggested. Market penetration, market development, product development.

Internal Analysis:

Financial Position (FP)

Sales4

Debt to equity ratio4

Gross margin6

ROA5

ROE3

Financial Position (FP) Average4.4

External Analysis:

Stability Position (SP)

Technological change-3

Rate of inflation -4

Regulations-7

R&D expenses-3

Competitive pressure-4

Stability Position (SP) Average -4.2

Internal Analysis:

Competitive Position (CP)

Product quality -2

Market Share-4

Technology-5

Customer loyalty-1

Control over suppliers and distributors-3

Competitive Position (CP) Average-3.0

External Analysis:

Industry Position (IP)

Profit potential4

Growth potential3

Financial stability2

Ease of entry into market2

Resource utilization3

Industry Position (IP) Average2.8

BCG MATRIX:-DivisionRevenuesPercent revenuesProfitPercent ProfitRelative market shareIndustry growth rate

11948000001003090000015.86%0.40 (assume)4%

Relative Market Share Position

High Medium Low

1.0 .50 0.0

High+20StarQuestion Mark

Industry

Sales

GrowthMedium 0Cash CowDog

Rate

(Percentage)

Low -20

EXPLANATION:-Company lies in the quadrant of the quadrant question mark, so strategies Market penetration, market development, product development are suggested.IE MATRIX:-DivisionSales%salesProfit%profitIFEEFE

11948000001003090000015.86%2.582.77

The Total IFE Weighted Scores

Strong Average Weak

4.0 to 3.0 2.99 to 2.0 1.99 to 1.0

IIIIII

IVVVI

VIIVIIIIX

EXPLANATION OF IEE MATRIX:-As our company BMS falls in the 5th quadrant, therefore we suggest a strategy of Hold and Maintain (Market Penetration, Product Development).GRAND STRATEGY MATRIX:-

Rapid Market Growth

Quadrant IIQuadrant I

Market PenetrationProduct Development BMS

0

Weak Competitive PositionStrong Competitive Position

0

0

Quadrant IIIQuadrant IV

Slow Market Growth

EXPLANATION:-BMS falls in the first quadrant, so we suggest following strategies:- S1=. (Market Penetration)Increase product line for drugs S2= (Product Development)Adoption of innovative strategies

QSPM:-

Increase product line for drugsAdoption of innovative strategies

OpportunitiesWeightASTASASTAS

1.Security technologies to make packaging and products less vulnerable to counterfeiting 0.1030.3010.10

2.Generic drugs are only slightly less expensive than branded ones in Japan and Europe.0.0520.1020.10

3.FDA will often allow drugs to become OTC drugs as their patent ends.0.0540.2030.15

4. Pfizers Lipitor and Lillys Zyprexa patents expire in 2011.0.0930.2710.09

5.Global pharmaceutical sales are expected to expand up to 7 percent over 2011.0.0320.0610.03

6.00.0000.0000.00

7.00.0000.0000.00

8.00.0000.0000.00

9.00.0000.0000.00

10.00.0000.0000.00

ThreatsWeightASTASASTAS

1. The company acquires biotech companies, technology and expertise and hence a threat to its culture is infused ever more deeply.0.1010.1040.40

2. FDA requires 3 phases of expensive human testing before a drug can be approved.0.1800.0030.54

3.Patent infringement in developing countries not honoring patents from other nations.0.1510.1500.00

4. Less than 1/3 of all marketed drugs achieve enough commercial success to recoup their R&D investments. 0.1520.3030.45

5.Counterfeit drugs and product tampering, theft or diversion represent a threat0.1000.0000.00

6.00.0000.0000.00

7.00.0000.0000.00

8.00.0000.0000.00

9.00.0000.0000.00

10.00.0000.0000.00

StrengthsWeightASTASASTAS

1. BMY has 12 manufacturing plants worldwide and conducts R&D in 4 countries.0.1040.4020.20

2. BMY bought Amira Pharmaceuticals in 2011.0.1020.2030.30

3.String of new technologies, alliances has strengthened the brand0.1020.2010.10

4. Many key drugs were approved in 2011 and many more are expected to be approved in 2012.0.1540.6010.15

5. Produce a wide range of drugs to treat, HIV, Diabetes, Bi Polar Disorder among many others.0.0830.2420.16

6.00.0000.0000.00

7.00.0000.0000.00

8.00.0000.0000.00

9.00.0000.0000.00

10.00.0000.0000.00

WeaknessesWeightASTASASTAS

1. Strong dependence on working with third parties to improve and enhance abilities.0.0500.0010.05

2. Have not expanded into emerging markets well enough.0.1000.0020.20

3.Company layoffs and post retirement plans may affect employee relations.0.0700.0000.00

4.Substantial drop in sales for two key drugs: Plavix, a blood thinner, and Pravachol, a cholesterol-lowering drug.0.1040.4000.00

5. Revenue isnt competitive enough to compete with R&D expenditures such as other top companies like Pfizer and Merck. 0.1530.4500.00

6.00.0000.0000.00

7.00.0000.0000.00

8.00.0000.0000.00

9.00.0000.0000.00

10.00.0000.0000.00

TOTALS3.973.02

EXPLANATION:-So, Market penetration is better.(increase product line for drugs)

RECOMMENDATIONS:-As market penetration is the better option for the company, company should adopt following:-1. Add 2 new manufacturing plants in China for $200M.2. Product generic versions of Lipitor and Zyprexa for $100M.3. Increase R&D by $200M for the production of specialty drugs.4. Add a division for the production of OTC drugs for $200M.Add 2 new manufacturing plants in China for $200M will benefit the company to great extent.