The article concerns the interest the pharmaceutical
company Pfizer had in purchasing another major company, AstraZeneca. An issue in the article is the prospect of
the companies’ futures. Another around certain experimental treatments one of
the companies is pursuing and how that will affect the business.
Seeing as the issue raised was concerning
the purchase of AstraZeneca by Pfizer, such an outcome would have a huge impact
on different stakeholders. A purchase of a company differs from a merger of
companies. Had AstraZeneca accepted Pfizer’s bid of £63 billion[1],
a reorganization would have been very likely. This may have led to a vast
amount of AstraZeneca’s employees losing their jobs due to Pfizer already
having most of the workforce that is needed.
AstraZeneca is a company owned by
shareholders[2]
and they are therefore highly concerned when a bid for the company is offered.
It would affect their share in the company because it could either rise or fall
drastically, and it would be hard to foresee which outcome it would be.
The
competition between Pfizer and AstraZeneca is an external factor. Pfizer’s
strategy for their business was to try to purchase a significant competitor.
Though this did not go through, it still increased Pfizer’s share price with
16% this past year[3].
It was increased because people believed that Pfizer’s strategy in expanding
and becoming larger is a long-term goal that will work in favour for the
company.
This external factor has affected
AstraZeneca in that the long term goals were in focus again and the CEO had to
spell out clear specific targets to show they were moving forward as a business.
There would otherwise have been a risk that another company would make a bid to
purchase AstraZeneca. Since last year when Pfizer made a bid, AstraZeneca’s
share price has risen 6% which is nowhere near the increase that Pfizer has
had.[4]
There are several internal factors that may
have been effected by the external threat a proposed bid like the above may
have led to.
Ethics by the workforce may have been
lowered as a new company would have introduced new employment guidelines and
terms of employment.
The development of scientific research and
drugs meaning the need to keep moving forward, may now be better and faster.
Acquisition of a highly scientific company may have led to the progression of
research of both companies combined and a higher knowledge of technology.
Another factor that may have been affected
is the socio-cultural factor. AstraZeneca has a higher market share in Sweden
than Pfizer for instance so they would probably have managed to expand faster
into more markets seeing as the two companies have higher sales in different
markets.
A year later, the acquisition of
AstraZeneca by Pfizer never happened. Yet both companies have declared what
long-term goals they have set for the future so a clear strategy has made it
possible for each business to gain from it in different ways. It also shows how
an external factor may force the people in charge of a company to act quickly,
and the responsibility a CEO has, to make sure that a business maintains a
competitive edge.
Bibliography:
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