Globalization of Health Essay
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Sample Essay on Globalization of Health
Globalization is an international interaction process that brings together various people, companies, and governments. The integration arises from the interchange of ideas and mutual sharing of worldviews. Globalization can also be defined as the coming together of the world or connecting to the world through defined systems (Cohen, 2013). It is achieved using the Internet and other networking platforms that promote the sharing of ideas or worldviews. It brings institutions and people together with the aim of providing quality and real time solutions to major problems presented by environmental conditions. According to Cohen (2013), globalization is a key factor in social and economic integration that organizations aspiring to record exemplary performance must embrace. It brings the world together through a global village concept that has helped in shaping destinies of many individuals globally. Institutions that aim at expanding their networks, reach out to more customers, expand market base, and increase productivity must embrace globalization as a strategic tool for development.
Globalization is the most viable tool for development in the 21st century. This is especially because the century is characterized by high levels of innovation, technological advancements, and creativity. These aspects run every sector of the world economy, including health, tourism, hotel, transport, and agriculture sectors. Globalization enables every sector to meet its performance goals that are aimed at improving service delivery to customers (Connell, 2010). In particular, the health sector has seen tremendous growth and expansion over the years both in the United States and elsewhere. This sector has been able to introduce new methods of treatment, Medicare service delivery, infrastructural development, and modern ways of medicine production. Many hospitals in the United States, including Pfizer, operate based on a globalization strategy. The hospitals have strong systems and globalized approaches to service delivery that enable them to offer basic treatment to patients anywhere globally. The main idea behind this mode of operation is to make health care acquisition a global thing that can be accessed anywhere in the world.
This paper gives a detailed analysis of Pfizer Company from a global perspective. The company is known for its outstanding performance in the medical sector in the U.S. and other jurisdictions where it has strategic business units. It is committed to revolutionizing service delivery in the health sector by taking health care closer to the people. This approach was adopted after it was established that many people, especially the sick, were suffering more because of inadequate pharmaceutical services. Many patients could not access quality medication easily or access drugs to help them in containing their deteriorating health conditions in good time. Therefore, the institution decided to focus its synergies in providing the much needed pharmaceutical services with utmost diligence. It has been able to achieve a lot due to the globalization concept of operation that it adopted. The concept has enabled it to collaborate with other critical service providers, formulate strong working relationships with stakeholders, identify health risks, and execute effective testing of new medicine. This paper covers critical discussion about the company’s background, strategies of performance, the areas in which it has globalized, why it has globalized, and the global forces.
Pfizer Health Company (Pfizer) is a renowned pharmaceutical service provider that started its operations in the year 1849. The institution is located in New York and its main research center is based in Groton (Rodengen, 1999). It was founded with a core mission to be the leading pharmaceutical service provider dealing in medicine and vaccine supplies. The idea was to bridge the existing gap between the global market needs and the supply chain that has always been characterized by immense challenges. Since its inception, the company has grown from strength to strength. It has been able to expand its business units to many locations, develop more infrastructural units, hire additional employees, and embrace technology in its key service systems (Cockerham & Cockerham, 2010). It enjoys a wider network of customers, suppliers, policy makers, medical specialists and other stakeholders because of its globalization initiatives. It has equally been able to double its performance over the years in terms of sales volumes and revenue capacity, factors that signify the exemplary nature of its business model.
To serve the world better, the company’s management identified that it was proper for it to embrace globalization in its service delivery. The management recognized that it was hard for the company to become globalized without applying globalization strategies. This prompted the adoption of major globalization strategies that included advertisement, social factors, diversification, market penetration or differentiation, and focus (Rodengen, 1999). The strategies are credited for the company’s success as they ignited performance at various stages of operation. They brought in a new lease of life in the institution, thereby enabling it to adopt universal techniques of service delivery. In particular, the initiatives undertaken enabled the company to expand its product range to cover specific global needs. It developed new global portfolio of products that included medicines and vaccines and other important consumer health care products. The range of products include blockbuster drug, Lipitor, atonastatia, Zithromax antibiotic, among others (Rodengen, 1999). The medicines and vaccines produced are meant to serve various healthcare disciplines that include immunology, cardiology, oncology, and neurology. These major health care disciplines focus on servicing critical medical needs of patients globally. This is because many diseases fall under the medical disciplines that are professionally operated.
When and Where Pfizer Globalized
As already seen, Pfizer is a global pharmaceutical company that was started with the aim of providing unmatched medical services globally. To achieve this objective, it was necessary for it to embrace globalization strategies. It was also necessary for it to adopt conventional health care practices that were driven by global concepts of business growth. This made the company to embark on high-powered deliberations on how to become a fully globalized entity. The discussions started in 1960s when the company was experiencing steady growth and high demand for medical vaccines and drugs for various diseases (Rodengen, 1999). It is the same period when the company achieved its globalization goal. Pfizer expanded to new markets, adopted fresh ideas and medical best practices, and established the specific needs of patients.
Evidently, the company’s ability to globalize its health services has transformed its status and performance in the sector globally. It is has become more responsive to the growing patient needs. It has also become effective in service delivery and even enhanced its efficiency. Its services can be found in many countries across the world. In countries where it lacks physical presence, there exist subsidiary or franchise entities operating on its behalf. This aspect makes its key health products reachable to many people globally.
The move to embrace globalization started in earnest in the company’s headquarters in the United States. The deliberations started there due to the frequent orders for medicine and vaccines from the domestic market. The increasing number of orders was evidence that there was a great need for the company to go global in order to be able to serve the growing healthcare needs of patients.
Why Pfizer Globalized
From all indications, the company strived to globalize because of three major reasons. The first reason was to serve patients promptly irrespective of their location. The company wanted to increase the efficiency and effectiveness of its service delivery. For instance, it sought to guarantee real time response to customers’ needs for medicine and vaccines. The major target group in this respect included hospitals, pharmacies, and individual patients.
The second reason was environmental changes and relevance of globalization in expanding the market for health products. Global healthcare provision is considered an ultimate way of shaping destinies, helping in identifying more risks, and conducting new testing of medicines. The company further globalized so it could learn from the best global medical practitioners and be able to attract qualified medical specialists who would be able to offer quality health care services in every location of its service delivery.
The Global Forces That Made Globalization Attractive To the Organization
Organizations always experience immense pressure from various global forces to globalize or expand their scope of operation. The forces determine decisions made in the organizations with respect to product portfolio, formation of new performance strategies, and expansion into new markets (Connell, 2010). The forces also impose pressure on the interactive levels between companies, their policy formulation, and compliance with prevailing market trends. Various forces that were domestic and international in nature fueled Pfizer’s globalization push. Some of these forces included the need to remain sustainable, social factors, the existence of emerging markets, technological advancements, and greater global connections.
Focus on Sustainability
Pfizer’s globalization quest was further informed by the need to remain sustainable in the healthcare industry. The company wanted to remain profitable while serving the public effectively in the long-term (Connell, 2010). Remaining sustainable in this respect could not be possible without going global and ensuring proper coordination of activities between stakeholders. Going global was also one way of ensuring achievement of the company’s stamp of approval by its potential customers globally. No company can operate effectively and record exemplary performance without the global stamp of approval. With the stamp, a company is assured of expanding its global market share.
Advancements in healthcare technology resulted in the company’s strong quest to globalize. It was keen on exploring or taking advantage of such enhanced communication platforms and advertising networks as TVs, radios, and the Internet. These tools were very essential and instrumental in the company’s growth plan from the time it sought to globalize (Cohen, 2013). Indeed, many institutions were motivated to expand due to technology-enabled systems and Pfizer never wanted to remain behind, as it would have lost relevance.
Pressure from emerging markets also contributed greatly to the globalization of Pfizer. The emerging markets created immense competition and the need for the adoption of new health care provision strategies (Cockerham & Cockerham, 2010). Many people were looking for quality healthcare services during the period the company was looking to globalize. The new markets created strong rivalry forces that needed globalization in order to effectively counter. Therefore, the company focused on reaching out to the emerging markets and expanding its supplier base by going global through the use of e-technology to address customers’ needs. Its focus was to timely address the ever-changing patient needs.
Other major factors that pushed Pfizer into globalization included such social factors as changes in social structures, lifestyle patterns of the global population, buying patterns, consumer lifestyle, social orientation, cultural differences, and social status (Connell, 2010). The company needed to expand to be able to serve the needs of patients in diverse locations since social trends depicted a higher need for medical services by the majority of the global population. Achieving globalization at the time was a strategy to ensure that the company became well established in many locations so it could be easily accessible to patients in need.
Nature of the Domestic Market
The domestic market for pharmaceutical products in America experienced a steady growth from 1900 to 1960. This high level of demand was mainly caused by the First World War, the Cold War, and the Second World War (Bennett & Tomossy, 2006). There was high demand for Vitamin C to keep the population healthy while antibiotics were needed to fight against bacterial infections by both the American army and the general population. At the time, only small advancements in manufacturing antibiotics had been made and when Pfizer came up with an easier way of manufacturing Penicillin, there was a high demand of the drug. The nature of the market can be discussed as below;
Competitiveness in the pharmaceutical domestic market – During the 1950s, there were few companies that were manufacturing pharmaceutical products in America. At this period, the Second World War was going on and there was a very high demand for antibiotics for the American soldiers in the battlefield. Pfizer was by then producing substantial amounts of penicillin and therefore there was the need to initiate offices in allied countries to help with the distribution of the drug. In addition, the organization was using Deep-Tank fermentation process for the production of large quantities of penicillin and therefore it needed to globalize its laboratories by starting to operate in countries that were taking part in the war.
The lack of stiff competition in the American pharmaceutical industry gave Pfizer an easy breakthrough in the domestic market. Since the company’s inception, the majority of the population in America preferred its pharmaceutical products because they were affordable. Sparke (2013) argues that this factor enabled Pfizer to be a monopoly in the pharmaceutical products market and the enormous profits it realized from the domestic market were pumped into its expansion.
Moreover, the methods of production used by Pfizer were exemplary, enabling it to produce high quantity of high-quality products. This was evident when Doctor Richard Pasternack came up with a method of producing Ascorbic Acid (Vitamin C) without fermentation. The company could manufacture large quantities of Vitamin C and since Vitamin C was in high demand for by war soldiers, there was an increasingly high demand for the product resulting to the need for expansion. In addition, the company came up with the deep-tank fermentation process for manufacturing penicillin in large quantities, which enabled it to get potential market from external countries that were participating in the Second World War (Hitt, Ireland & Hoskisson, 2007). However, it is noteworthy that the success of Pfizer in the American domestic market was because of a combination of several factors which thereafter made it necessary for it to expand into global markets.
The Structure of the Global Market
The global market, during the 1950s, needed large amounts of pharmaceutical products in preparation for the Second World War. Many wounded soldiers who needed antibiotics for their treatment could not readily get them because at that time, the supply of the drugs was running short. This was because most pharmaceutical companies were relying on outdated procedures of manufacturing antibiotics. For instance, the Nystatin antibiotic was manufactured by extracting Streptomyces noursei from Virginia soils (Bennett & Tomossy, 2006). This process could not sustain the increasing demand for antibiotics and therefore there was a large potential market for pharmaceutical products outside America especially from the allied countries.
Since Pfizer was able to produce large quantities of penicillin through the Deep-Tank fermentation process, it was able to export this commodity to foreign markets. Extensive research of antibiotics by Pfizer’s doctors led to the Penicillin drug that was highly demanded during the Second World War. Allied countries during the war ordered antibiotics from the United States and an external potential market was consequently created (Hitt, Ireland & Hoskisson, 2007). Since Pfizer was the monopoly in the domestic market, it was forced to expand its operations beyond America to the other allied countries such as Brazil.
Shortly thereafter, more advancements of antibiotics were done in the United Kingdom and India and thus a stiff competition was created in the global market. However, Pfizer products were less costly and therefore attracted more customers globally. There was a large potential market for customers who could afford these pharmaceutical products hence more branches were opened up in Germany, China, Japan, and Taiwan to cater for the large market demand. By the beginning of the 21st century, Pfizer had already established firm roots in these countries.
Areas of Health That Enabled Pfizer to Globalize
It is very clear that Pfizer’s globalization was due to the high demand for pharmaceutical products around the globe. Countries which did not take part in the Second World War did not have urgent needs for the pharmaceutical products. This was because they were at a lower risk of contracting bacterial infections. This situation created two different groups of countries: one group that needed immediate pharmaceutical products and another that did not have urgent demands for the products (Sparke, 2013). The former played a huge part in informing Pfizer’s decision to undertake global expansion. Today, the two groups are still exist. In developing countries, people are still struggling to get primary health care while in developed countries, the basic health situation is beyond primary health care. Specifically, in developed countries, people are in more demand for secondary health care and less demand for primary health care.
The need for pharmaceutical products in the 1950s was also influenced by the need to come up with new medicines to address the healthcare issues emanating from the effects of the Second World War. The primary aim at that time was to get control of the aftermath of the war. In today’s world, there is more testing of medicines that can cure viruses. Bacteria are no longer a threat but doctors are still looking for efficient antibiotics to cure them. More advanced bacteria and viruses have been identified and there is more demand for pharmaceutical products that can cure them. However, not all patients can afford these drugs. Some of the drugs are so expensive that only a few people can afford them.
Strategies Pfizer Used To Expand Its Operations
Globalization is a noble idea desired by many organizations. It transforms how activities are conducted and enhances performance. Any organization that aspires to withstand competitive pressure in the global health sector has no choice but to embrace it holistically (International, 2011). It is the surest way for achieving increased response to customer needs. However, before the process of globalization is started, a number of factors have to be considered. Similarly, relevant strategies have to be put in place and adhered to from the preamble stages of process implementation to completion.
Companies must understand the environment in which they are operating so they may establish potential risks, customer needs, and prevailing opportunities worth exploring. They should also execute detailed feasibility studies to establish their strengths and weaknesses (International, 2011). This helps in shaping the decision on whether to globalize or not. Feasibility analysis also assists in ascertaining whether a company has adequate resources to enable it finance its activities and remain sustainable. Other aspects that should be taken into account include culture and cultural practices of customers, consumer purchasing behavior, and competition.
For Pfizer, the first strategy towards conquering new markets was the execution of a detailed internal and external analysis. The company executed in-depth evaluation of its strengths and weaknesses that facilitated proper identification of what it could achieve (Ismail, 2011). The second strategy entailed identification or understanding of the behaviors and cultures of the potential customers in the new markets. This was done in several nations including but not limited to Mexico, Belgium, Cuba, UK, Canada, and panama. The move helped the company to decide on the appropriate advertisement and product distribution techniques to use. It also helped in the mobilization of health care resources such as diagnosis machines and employees (Ismail, 2011). Understanding of the cultural practices of the societies gave the company’s management the opportunity to plan and allow for the establishment of a centralized expansion zone. This aspect allowed for the effective coordination of activities and the hiring of qualified staff.
Likewise, the company took time and identified the level of international competition while taking into account its own competitive edge in the industry. Its management fully recognized that gong into a new market without a proper understanding of the competition in it would be disastrous. Competitive advantage must be established given that its absence exposes a business to severe performance struggles (Ismail, 2011). The move allowed Pfizer to gain traction and effective connection with customers.
Another strategy the company adopted was the use of strategic partners in diverse locations. It expanded its networks through local institutions in the various countries it sought to expand. The institutions accepted to act on its behalf by selling its much valued medicine products and vaccines to customers (International, 2011). The local entities also contributed to the company’s success by creating awareness of its major products among potential buyers. This strategy enabled the pharmaceutical service provider to spread its branches even to remote areas globally. The new branches created more opportunities for organizational growth and economic development.
Many people value and credit the company for its globalization initiative. They are happy that the initiative has consistently enabled them to access quality pharmaceutical services in good time when the need arises. Various health complications no longer pose severe fear to most people because relevant drugs or vaccines can be accessed easily. The company also used technology-enabled systems and various media platforms to access the global market. The technology used included advertisement on TVs, radios, and the Internet. These platforms helped in creating awareness about the company’s operations and key products. They also helped in informing people about the major health services the company offers and the importance of the services in promoting human health. Such information became helpful as it attracted many people towards accepting the company and embracing its products.
It is further noteworthy that Pfizer embraced Porter’s generic model to gain access into the new global markets. The strategies under the model were suitable since they presented requisite market expansion and awareness creation incentives. They ensure that the organization executed its marketing activities efficiently and effectively. The main strategies used by Pfizer in this regard were diversification, differentiation, and focus strategies. First, diversification was used to enable the company penetrate new and different markets with ease. The company achieved this by diversifying its product range depending on various factors that included customers’ needs and buyers’ income levels (Roy, 2009). For instance, the company did not introduce its medicines and vaccines at the same time in some markets. This was especially so in markets that were deemed competitive. In such markets, Pfizer entered using low-end products or items that were not in sufficient supply by rival companies. After gaining inroads in the markets, the company went on to introduce real medicine to the people. With this strategy, the pharmaceutical firm was able to gain access into markets within the Euro-zone, some Asian nations, and some African countries.
Focus strategy is a noble market entry concept that Pfizer embraced to the fullest. The strategy was effectively used by focusing synergies in serving certain markets and market segments. The company first executed proper market segmentation that assisted it in knowing the particular needs of each segment (Roy, 2009). The segmentation allowed the management to know where to target with a product or service. It ensured accuracy in addressing the needs of the people, especially patients, given that they were able to get relevant services courtesy of the effective segmentation. Certainly, the concept fueled the company’s quest to execute the globalization process with a clear focus on the price that in turn influenced the people’s lives effectively.
Additionally, Pfizer used differentiation to gain access to new markets and become the world’s pacesetter in research and medicine distribution. Market differentiation enabled the company to service each market depending on the prevailing needs and competition. Markets with low health care needs were not heavily invested in as compared to those with higher needs. Highly competitive markets were also not flooded with products at once. The entry was systematic and it started with unique services in that market. The idea was to avert possible wastage of resources due to low returns.
Division of the World into Safe and High-Risk Areas in Terms of Human Health
The drive to globalize has resulted into more health centers forming clear divisions or segments through which they operate. The division is majorly based on the area of the health issue and challenges that people face such as the risk of illness and areas where new medicine is tested (Klug, 2006). The segmentation criteria helps patients to understand or know where to find certain types of medicine and tests and how to manage various risk situations. Similarly, the criteria helps health care institutions to understand the various health issues faced by patients and hence be in a position to provide relevant solutions. It also allows them to decide effectively on the type of drugs or medicines to test and supply in the market for usage. As noted, globalization is a concept that is characterized by constant circulation of products and services. The circulation is done across countries and it is based on the efficiency of the criteria used.
To date, the practice still continues in the health sector. Institutions in the sector globally are constantly striving to ensure that their goods and services are in good circulation (Klug, 2006). They are also keen to foster their acceptance and reception by customers in the market. They circulate medicines, health care professionals, vaccines, and medical equipment. The objective of the program is to bring health care services closer to people and enable individuals globally to access quality medical care at any location. People can even move to foreign nations to secure the precious services based on the design of the program. It suits movement of people and transfer of medical equipment including staff to where services are necessary. Current trends in the medical sector show clearly how hospitals and various medical service providers conduct globalization programs (Klug, 2006). Most of them organize free consultation and treatment days to give patients the opportunity to get professional treatment and advice on health issues such as diabetes, cancer, high blood pressure, and other chronic illnesses. The mobile provision of health services has equally resulted in enabling individuals to access health insurance resources efficiently. The schemes enable people to access medical care at any location globally once covered by the universal insurance schemes provided.
The globalization of Pfizer was due to the characteristics of the domestic and the global market. The domestic market created a high demand allowing the company to expand and as it expanded, the quantity of products manufactured escalated to a level that it was able to sustain the domestic market and still sell to the global market. It can be noted that the First World War and the Second World War were among the major contributing factors for the increase in the demand for these pharmaceutical products due to the health of the soldiers who were involved in the wars. Thus, it can be concluded that the high demand for pharmaceutical products, extensive research, and a large base of potential customers were the contributing factors to the globalization of Pfizer Inc.
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