Management Essays – Organizational Output

Organizational Output

Introduction

Output generally refers to the things produced. output, in terms of the production unit means total number of products generated for a given duration and the various cost associated with the production. Outputs also refer to the number of customers visited in a given time. The organization needs to become accustomed, if there is a decline in the output of the organization due to alteration in the external or internal environment.

Key outputs

Key outputs of the Pfizer include opening of

  • Manufacturing facilities,
  • New innovative products
  • And financial outcome (Pfizer Inc Third-Quarter 2004 Performance Report, 2008).

Manufacturing facilities: Pfizer Inc, the giant in Healthcare opened its manufacturing facility in Singapore of about $600. This investment will support the extensive plans of the company’s operations. In Asia, this investment has made the Pfizer important active pharmaceutical ingredient manufacturing plant. It is an entirely automatic facility. This facility in Singapore will prove to be an important link in manufacturing and developing dynamic ingredients that will be used in Neurontin. For tablets and capsules production, these ingredients are used and are transported to the drug product plants. The output obtained by the manufacturing plant will promote the global sales of about many billion US dollars. Pfizer selected this particular place because of well established corporate information technology unit (Kotler, 2002).

From an American-intensive chemical manufacturing company, Pfizer has shifted to a global research based pharmaceutical business. As a result, it has become the world’s biggest healthcare company based on research.

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Products: In 2007, the company performed extremely well and made such changes that have enhanced its future performance. Lyrica, Sutent and Chantix played a Key role and performed extremely well. Currently Pfizer has ten dissimilar divisions and encourages thirty-one diverse main products. Within each groups, the divisions and major products are: Cardiovascular and Metabolic Diseases, which includes Lipitor, Caduet, Norvasc, Diabetes, Arthritis and Pain, Central Nervous System Disorders, Infectious and Respiratory Diseases. Apart from this, Pfizer have six products that are into the pipeline of R&D.

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Financial outcome: In 2007, the company reflected strong financial performance. The company focused on constructing the value by attaining the financial goals, restricting spending, and maintaining the cost structure. In order to deliver the vast shareholder return, new program is approved by Board of Directors. Apart from this, the company announced an increase of 10% in the first-quarter of 2008. This has increased the share holder wealth. In the fourth-quarter of 2007, Pfizer showed revenue of $13.1 billion and in the year-ago quarter; it reflected an increase of 4%. Foreign exchange has a great impact on revenue of Fourth-quarter 2007. Apart from this, there is an increase in the second quarter revenues. In 2005, Pfizer showed a net income of $8,085 million, this reflected a decline of 29% in 2004. The company has the huge budget allocated for R&D. It has strong predictable cash flow in the next thirty months. Last but not the least, Pfizer shows a stable EPS growth (Organizational Culture and Product Innovation, 2004).

Relevance of these outcomes in my study

These outputs play an important role in estimating the company’s strength and achieving its long term objectives. Apart from this, these also support the extensive plans of the company’s operations and increase the shareholders’ wealth. Innovative products can bring huge profits for the company, since they will attract the consumers. New product development is the strong capability of the Pfizer due to its determination, focus and dedication to research. Pfizer is becoming financially secure because of the company’s strong endeavor for developing the new innovative products. Hence, these form the important part of the study.

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Interrelation between the outcomes

All these outputs can not operate independently; they are interlinked to each other. To develop innovative services and products is a critical issue for any company and it determines the level of financial outcome that the company will receive. If the company plans to open the manufacturing facilities, it has to see the scope for the new innovative products. Company will try to find out the success rate it will obtain by opening the new facilities. Financial measures are taken as the lagging indicators that derive the outcomes from precedent actions. Restricted reliance on financial indicators will lead to the behavior that forgoes long-term creation of value for short-term performance.

Hence, proper estimation of the financial constraints is important. To expand the company business the company needs to be sound in its financial policies. Greater the financial outcome greater will be the company’s strength. Innovative products have the capability to secure the company financially. In the pharmaceutical industry, product market is getting saturated and forcing the company to spend a huge portion of budgets on differentiation of product and in the marketing activities among the competitors.

Synergies created by the output

Positive synergy is created by these outputs. If they are properly aligned, they can yield to a huge profit. The proper investment in any field is precious because the firm gets the opportunity to take the advantage of new opportunities, which can derive the continuing development for the company. The total budget assigned for the development of new products by the company is the highest in the industry and can not be imitated by the competitors. Hence, development of new product development is exclusive and valuable to the organization. For this, the company uses the patent and license. New product helps in acquiring strong product portfolio. Proper financial investment in sales force plays a critical role as it determines the company’s strength in terms of profits and revenue. This example was found in the products such as Stutent and Lurica. The company’s internal process should be in line with the Pfizer external functions and must focus on the reorganizing procedures and processes so as to develop the efficiency in the operational activities to achieve a competitive advantage by spending fewer amounts.

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On the other hand, huge problems can arise if there is lack of proper coordination between these outcomes. All the outcomes are interlinked, so if they are not managed properly, they can put the company in trouble. Therefore, development of facilities requires huge research. And for this, company is required to properly allocate the resources to all the departments. Major chunk of revenue is used in the research and the development.

If any wrong decision is taken related to the development of new product without undergoing through analysis, the company can incur the huge financial losses, which will ultimately hamper the trust of the various stake holders of the company. If any strategy is missed out, it will lead to the space for the substitute products; for this, the company has to incur heavy loss.

Therefore company should take the proactive steps in order to defend the competitors. For this, the in depth analysis is required by the company. Therefore, efforts of all the departments in a coordinated manner are required (Kotler, 2002).

References

  • Kotler, P. (2002). Marketing Management: Strategies of Pfizer (11th Edition). New Delhi: Prentice Hall of India.
  • Organizational Culture and Product Innovation. (2004). International Business Review 13(6): 685-703.
  • Pfizer Inc Third-Quarter 2004 Performance Report. (2008). Retrieved April 28, 2008 from http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-20-2004/0002289038&EDATE=
  • Pfizer: A healthy business vision. (2004). Retrieved April 29, 2008 from http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/publications/singapore_investment04/singapore_investment10/pfizer_a_healthy.html
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