Business Strategy



 Five Forces: George Brown




The pharmaceutical industry is profitable. BMS had about $50 billion in revenue for the 2022 year. The pharmaceutical industry from 2001 to 2022 has grown exponentially year over year, revenue went from $390.2b to $1,482b. “For 2022, the total global pharmaceutical market was estimated at 1.48 trillion U.S. dollars.” (Mikulic) BMS offers innovative solutions to their customers, providing much needed medication to a high demand within society. Research and development remains prominent at BMS to help find the next lifesaving medicine. “In 2022, research and development spending in the pharmaceutical industry totaled some 244 billion U.S. dollars globally.” (Mikulic) Millions of people rely heavily on BMS’s products year over year, helping to keep demand high in the pharmaceutical industry. While BMS has large competitors, each company has a specific area of expertise used to focus their efforts on their target market. They currently provide medicine for cancers, diabetes, arthritis, and more. Research and development is an important piece to remain competitive within an industry. Developing better products and being early to an industry shift will help keep the company profitable for the foreseeable future.

Competitive Strategy: Nick Francisco

BMS focuses on the Industry wide Differentiation strategy, striving to create unique and innovative pharmaceutical products that distinguish itself within the pharmaceutical market and maintain a competitive edge. The competitive strategy for Bristol Myers Squibb is in a very solid and lucrative spot considering the practice areas that the company focuses on. BMS focuses on specific markets, such as chronic and severe illnesses.  They can use this to their advantage, as they have resources available to make a continued and sustained effort into developing medicine that is beneficial to the consumer and practice area.  BMS dedicates a substantial portion of their efforts to R&D in product development for this area of the market.  




To take into consideration the five forces listed above, BMS has to be diligent in maintaining different aspects of their strategies in order to keep and maintain their competitive advantage.  



  • To deter the competition that exists in this industry between their competitors, BMS needs to ensure that their efforts are sustained in making reliable and reputable products for usage in the treatment of severe illnesses, such as cancer. If BMS can maintain solid product development, they can keep competition from taking market share for these types of products.
  • Considering the threat of new entrants, it isn’t really a huge worry for Bristol Meyers Squibb.  BMS has such a long history and reputation available that makes it extremely difficult for others to enter their type of markets.  Additionally, BMS has a lot of resources and finances available to pressure new entrants.
  • The bargaining power of suppliers is something that BMS must be cognizant of, however given how much BMS likely spends on suppliers for resources in product development, it would be unwise for suppliers to lose them as a client and force BMS to use somebody else.  In most instances, I would not find this to be a huge issue.
  • In reference to the buyers of their products, they are also not a threat to the company.  The reason for this is that BMS has such a substantial and specified market for their products, the buyers will not have many options available to pick otherwise.  Moreover, products that are proven to be effective will be used in an instance where severe illness is the scenario.
  • The threat of substitutes is also minimal, and likely a non-factor - much to the reason that the buyers don’t have a lot of options.  This goes hand in hand with the buyer bargaining power.  

 

Bristol Myers Squibb ultimately maintains a competitive advantage based on their confidence in their research and development, which maintains the reliability of their long-term products in addition to their manufacturing and testing of new and potentially better products in the near-term.

 

Company Value Chain: Karla Rodriguez 

 

During the planning process, it's important to identify potential sources of competitive advantage for Bristol-Myers Squibb. By conducting a Value Chain Analysis, the company's various activities can be examined to determine which ones may be considered as economic rent sources and which ones could serve as barriers to new entrants or cause cost disadvantages to competitors. This analysis allows for a deeper understanding of the company's operations and potential advantages over its competitors.


Primary Activity

Description

Inbound Logistics

BMS maintains relationships with various suppliers providing raw materials, chemicals, packaging materials, and other components necessary for pharmaceutical production. The company coordinates inbound shipments through various transportation modes such as trucks, air freight, or ocean freight to deliver materials to BMS manufacturing facilities. BMS implements technology-driven solutions and supply chain optimization strategies to streamline inbound logistics operations.

Operations/Manufacturing

When raw materials arrive, it becomes crucial to analyze operational activities.  At Bristol-Myers Squibb, we’re always ready to process the raw materials into finished products and launch them in the market. Some examples of operational activities include machining, packing assembling, testing, as well as equipment repair and maintenance. These activities are not limited to manufacturing but also include service operations. Analyzing operational activities is essential to improve productivity, maximize efficiency, and ensure Bristol- Myers Squibb’s competitive success. Increased productivity can lead to consistent economic growth, increased profitability, and a strong foundation for gaining a competitive advantage.

Outbound logistics

Delivering the product to the customer through various intermediaries is a crucial part of outbound logistics. The process includes material handling, warehousing, scheduling, order processing, transportation, and delivery to the destination.  To achieve its business growth objectives, Bristol-Myers Squibb can analyze and optimize its outbound logistics to explore competitive advantage sources.  When outbound activities are carried out promptly and cost-effectively, while also maintaining the product quality, it enhances customer satisfaction, and opens growth opportunities for the firm. This is particularly important for Bristol-Myers Squibb when dealing with perishable products that require swift delivery to the end customer.  Therefore, the company should pay specific attention to its outbound value chain activities to ensure maximum efficiency and customer satisfaction.

Sales and Marketing

At this stage, Bristol-Myers Squibb aims to showcase the benefits and unique features of its products to persuade customers that its offerings are superior to those of competitors. The company understands that producing high-quality products at affordable costs and with distinctive features is crucial to create value once marketing and sales activities are initiated. The sales agents and marketers of Bristol-Myers Squibb play a significant role in this process. Bristol-Myers Squibb employs various marketing and sales techniques such as sales forces, advertising, promotional activities, pricing, channel selection, quoting, and building relationships with channel members. The company may use the marketing funnel approach to structure its marketing and sales activities. Depending on Bristol-Myers Squibb's business objectives, brand image, competitive dynamics, and current standing in the market, the marketing strategies can either be push or pull. Integrating practical and wise marketing activities can enhance the brand equity of Bristol-Myers Squibb and differentiate it from the competition. However, it is important for the company to make reasonable commitments about product features that can be fulfilled by the production department. This underscores the need to ensure coordination between different value chain activities.

Customer Service

In the modern business landscape, post-sale services play a crucial role in building customer loyalty.  Customers are more likely to return to a company if they receive excellent support services, just as they would if they were impressed by marketing and promotional activities.  In today’s technologically advanced era, negative e-WOM can be detrimental to a company’s reputation.  Therefore, it is essential for Bristol-Myers Squibb to analyze its support activities and ensure that they are efficient, timely, and reliable to prevent negative feedback.  By offering excellent post-sale services, the company can establish a positive brand image and encourage customers to spread positive word of mouth.



Business Processes: Caitlin Monaghan 

 

Customer service is an integral business process of Bristol Myers Squibb. Customer service at BMS involves structured processes that follow predefined guidelines and protocols to handle inquiries, complaints, and requests. The company offers support systems to healthcare providers, pharmacists, and patients, providing guidance, information, and assistance regarding their products. BMS offers customer service through various communication channels, including phone support, email correspondence, and through digital platforms. This dedication to customer service ensures that patients receive the necessary support, building trust and improving the overall healthcare experience. 

A dynamic process at Bristol Myers Squibb is its recruiting process. The pharmaceutical industry experiences constant changes, and BMS's recruiting efforts dynamically adjust to these trends. BMS actively engages with potential candidates through social media platforms, industry events, and networking opportunities to build relationships with candidates and stay connected with potential talent. The company adapts its hiring strategies in response to changing business demands. For instance, they scale up hiring efforts in certain areas due to new drug developments or market expansion.

 

Information Systems: Kiran Kaur

 

Given Bristol Myers Squibb's differentiation strategy of targeting specific market segments with superior medications, investing in research and development in areas like oncology, immunology, and cardiovascular diseases, and staying ahead of competitors and new entrants through heavy investment in research, their information systems play a critical role in supporting these strategies. Under the guidance of Catherine Francisco, we uncovered that BMS utilizes management information systems such as Salesforce and LinkedIn.

BMS utilizes a variety of social media platforms to support its marketing and sales, such as Facebook, Instagram, and LinkedIn. The company uses LinkedIn for talent sourcing and recruitment. BMS establishes and nurtures talent groups on LinkedIn, connecting with professionals interested in the company and its industry. These communities serve as platforms for sharing information, networking, and fostering relationships with potential candidates.

Bristol Myers Squibb utilizes Salesforce for customer service to enhance interactions and relationships with healthcare professionals, patients, and other stakeholders in the pharmaceutical industry. Salesforce provides a unified platform where BMS can gather and manage comprehensive customer data. This helps in creating a complete view of each customer, allowing representatives to personalize interactions and provide tailored support.

Each of these information systems support Bristol Myers Squibb's differentiation strategy by focusing on customer engagement, relationship building, and innovation. These systems collectively contribute to BMS's efforts to offer superior and targeted medications in specific therapeutic areas, setting them apart from competitors.