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Pfizer: Focus on operating skills

Sanjiv Shankaran

PFIZER'S sharp focus on improving operating efficiencies helped the company record a 35 per cent increase in net profit in the first half of the financial year 2000-01 (the financial year ends in November).

Over the last few quarters, Pfizer has steadily improved the profitability of its operations on the heels of an effort to curb superfluous cost and improve the productivity of its sales force. Continuing with the strategy helped Pfizer record an operatin g profit margin of about 20 per cent in the first half of 2000-01. The net profit margin for the same period was about 11 per cent.

In the first half of 2000-01, it's sales grew by about 16 per cent, above the growth rate recorded by the overall market. Two products launched by Pfizer recently, Hepashield (Hepatitis-B vaccine), Magnex (hospital antibiotic), have shown smart growth. S o did another older product, Protinex.

The significant contribution of the three products underlines Pfizer's strategy: Sink large resources into a handful of products to get the maximum mileage.

The company has one of the most admired field forces in the country. The company's policy hinges on trying to steadily improve the productivity of its field force in order to record growth. Pfizer backs up the emphasis on its field force by paring costs. Therefore, the company's manufacturing facilities have been whittled down over time and finished goods purchases is a significant proportion of expenditure.

Pfizer's net profit for the first half of 2000-01 was Rs 35.63 crore, up by about 35 per cent in relation to the previous year's half yearly performance. The performance in the second half of the year is likely to be in line with that in the first half. The company is likely to record above-market growth rate on the back of systematic marketing.

Pfizer is expected to continue with its present policy of increasing sales effort for a relatively limited basket. In other words, working on the existing assets and avoid big capital expenditure The policy is likely to pay off in the near future and the company should post impressive results during the time.