Pfizer PESTLE Analysis 2022

PESTLEanalysis Team
PESTLEanalysis Team
Table of Contents
Table of Contents

We conducted a Pfizer PESTLE Analysis to see the external factors affecting Pfizer in the last 173 years and to explain the success it has achieved.

If you've made it through the pandemic and don't live under a rock, I'm sure you've heard the name, Pfizer. Pfizer was always a famous pharmaceutical and biotechnology corporation, but after the pandemic, it has seen new levels of popularity.

Pfizer was established in 1849 by two German immigrant cousins in Brooklyn, New York. After looking at all the success it has achieved over the years, we are bound to conduct a Pfizer PESTLE Analysis to see the external factors affecting Pfizer in the last 173 years.

Pfizer is among the top world's leading biopharmaceutical companies, employing more than 78,500 individuals worldwide. Pfizer is a gigantic global company working to improve healthcare standards across the globe by operating in 52 countries.

Pfizer has a vast product line consisting of different varieties of drugs. During the tough times of COVID-19, Pfizer developed its vaccine against the pandemic. After that, Pfizer has become a household name.

The drug manufacturing company managed to earn huge gains during the pandemic period. A surge in demand for Pfizer products led to huge profits. In 2021, 92% operational growth was observed in Pfizer's revenues compared to 2020.

You must be thinking about what sort of challenges such a huge company can face. Don't worry; we will give you complete insight. With the help of PEST analysis, this article will identify the external factors that have impacted Pfizer and will continue to influence Pfizer in the future.

Before proceeding further, we'll first explain what PESTLE analysis is and how it can be used.

A PESTLE analysis is a tool that can help analyze the various macroeconomic factors that affect a company's operations. It enables the company to formulate long-term strategies and increase its market share.

The word PESTLE is an acronym representing various factors such as Political, Economic, Social, Technological, Legal, and Environmental.

You'll find this article very interesting since, along with receiving information about the world's leading pharmaceutical company, you'll also learn about the PESTEL framework.


Political Factors Affecting Pfizer

Several factors impact an organization. Like other factors, political factors also significantly affect a company's long-term performance.

Since Pfizer operates in many countries across the globe, it has to encounter different political systems and governments. Therefore, Pfizer has to weigh risks involving political factors before making investments in other countries to achieve success.

Whenever a government changes, with a new government, comes new government policies. Countries lacking political stability can negatively impact Pfizer's operations in that country since there's a risk that newly formed governments may affect the operations of Pfizer.

The lack of regulatory bodies can also be considered a major political factor that would affect the growth of a pharmaceutical company like Pfizer. The absence of regulatory bodies would make the process more fragmented, and as a result, the company's operations would be affected negatively.

A similar scenario occurred when Pfizer signed an agreement with South Africa's Biovac Institute to manufacture their COVID-19 vaccine.

Although Pfizer decided to assist in the manufacturing of the pandemic vaccine, due to a lack of regulatory bodies in South Africa, Pfizer decided that the entire manufacturing process could not take place there; hence the main vaccine ingredients would be transported from Europe and only the filling and finishing process would take place in South Africa.

Pfizer mainly operates in countries with adequate regulatory bodies that ensure the smoothness of the operations. But some countries lack regulatory bodies. Therefore, carrying out operations in such countries will result in the fragmentation of the manufacturing process.

This would increase the production cost of Pfizer's products; as a result, Pfizer will experience low profits, which is not beneficial for the company.

Moreover, political unrest in the form of invasions also affects Pfizer. For example, due to the recent Russian invasion of Ukraine, Pfizer decided to stop its investments in Russia. This act will prevent Pfizer from generating more revenue in the long run.

Pfizer also needs to keep a close eye on the tax policies of different governments since a change in tax policies will have a direct impact on Pfizer. In addition, taxes are an essential tool of fiscal policy used to distribute income equally.

Generally, governments have imposed low taxes on Pfizer despite its enormous increase in income, but countries experiencing high-income inequality may Impose higher rates of taxes on Pfizer. Due to this high tax policy, a decrease in the revenue of Pfizer would be observed, which is not suitable for any company.

Economic Factors

Understanding economic factors are essential in making wise decisions and guiding your company to greater heights. This section of the PESTLE analysis will discuss how economic factors such as exchange rate, recessions, and labor costs affect Pfizer.

The exchange rate is an essential factor due to which currencies appreciate or depreciate. Therefore, a fluctuating exchange rate can affect Pfizer's investment plans since the currency value won't be stable.

Economic recessions can impact any company's growth adversely. The great depression in the US from 2007 to 2010 was damaging for every industry. The pharmaceutical industry experienced less damage since they only produce necessary drugs but still, Pfizer and some other top pharmaceutical companies experienced slow growth during the recession.

Other than that, high labor costs also impact companies' operations since an increase in labor wages puts pressure on the prices of products. As a result, prices increase.

For example, due to the limited supply of labor, the cost of labor increases, which will increase Pfizer's cost of input. As a result, the price of its products will also increase, making Pfizer's products expensive in the market. This may lead to a decrease in the demand for Pfizer's products, leading to a fall in the company's revenue.


Social Factors

Understanding the societal factors of a specific culture or society is vital if one is to succeed in the marketplace. Societal factors such as norms, traditions, and demography can help organizations to cater their services according to those norms by making their products/services more meaningful for customers.

Social factors create a significant impact on a company's performance. Therefore, before making an investment in a country, a company like Pfizer must analyze the demography of that country. According to WHO, the risk of falling ill increases with age.

Considering this research, Pfizer should invest more in countries with a higher ratio of older people, for instance, Japan. In this way, Pfizer can provide treatment to the people in need and increase its revenue.

Any multinational company should learn about the country's norms before investing there. Business and social practices differ from country to country. A lack of knowledge of a country's norms and values can get a company into great trouble.

Pfizer, a drug manufacturing and pharmaceutical company should practice in countries according to their norms and values. For instance, public advertisements of certain products may be considered inappropriate in some countries. To avoid public backlash and run smoothly, Pfizer should recruit local management and let them run the company.

Technological Factors

The evolution of technology has transformed the healthcare industry. Advanced technology can help healthcare providers deliver better care and improve their patients' quality of life while reducing costs and improving productivity.

We've become accustomed to instantaneous access to information and resources in today's fast-paced world. Yet, healthcare delivery systems are often slow to adopt new technology.

There are so many different technological factors that impact Pfizer's growth. One of the factors that can be considered a challenge for Pfizer would be the evolution of technology.

As technological growth occurs, people expect Pfizer to match their expectations. Pfizer has to adapt to new technologies and make full use of the internet and social media to stay in the game.

Knowing the significance of its presence on the internet, Pfizer launched its website with complete information about its products and provided exclusive insight into the company.

Another technological factor that would impact Pfizer would be its competitors gaining a technological edge over Pfizer by using innovation. If its competitors invest more in research and development, Pfizer may be driven out of the market.

Pfizer has been spending a significant portion of its revenue on research and development to counter this threat. In 2020, Pfizer spent more than 22% of its income on research and development. Pfizer was among the top pharmaceutical companies that spent considerable money on research and development.


Governments make laws to ensure no violation of rights takes place. Without legal protection and the adequate rule of law, the international investor would think twice before entering the Biotechnology & Drugs sector.

Implementation and application of laws vary from country to country so Pfizer should consider the legal factors that would impact the company before entering a new market.

Lawsuits always bring a disgrace to the company's name; they should be avoided at any cost. Breaking the law can result in a lifetime ban and heavy penalties.

There are several legal factors on which Pfizer's future depends, such as laws against discrimination.

Great importance is given to anti-discriminatory laws across the globe. To stay out of trouble, Pfizer should make sure no discrimination occurs at Pfizer.

Pfizer knows how important it is for the company to abide by the laws. In its report for 2020, Pfizer disclosed that it aims to recruit more Blacks, African Americans, Latinos, and Hispanics by 2025. This policy will create a good name for the company and bring good publicity.

Moreover, like any other industry Pharmaceutical industry also has strict laws. Therefore, taking patent laws lightly can cause significant damage to Pfizer.

Recently, Alnylam pharmaceuticals filed a case against Pfizer on patent infringement. This has created a big controversy all over the media, holding Pfizer's reputation at stake. Such controversies can damage Pfizer financially and earn a bad name.

Environmental Factors 

Sustainability is becoming a necessity for organizations in today's fast-paced world. As a result, government and pressure groups call for organizations to adhere to environmental standards.

Climate change is one of the environmental factors that significantly impact organizations. Since climate change has increased the frequency of natural disasters worldwide, Pfizer should make sure to keep its supply chain flexible so that it doesn't observe any disruption in supply.

An increasing percentage of greenhouse gasses are considered a great threat to the environment. Pfizer could use renewable technologies in the drug manufacturing process to mitigate the emission of greenhouse gasses.

Another environmental factor that influences Pfizer's sales is using eco-friendly products in manufacturing and packing processes. After the UN pitched sustainable development goals, great importance was given to eco-friendly products.

To stay consumer-friendly and have a good reputation in the market, Pfizer should adopt eco-friendly methods for manufacturing and packaging.

Knowing the importance of environmental factors in a company's growth, Pfizer is working on attaining sustainability goals.

Pfizer has been encouraging its customers to reduce pollution and promote eco-friendly practices. Moreover, with the help of NGOs and governments, Pfizer is working to improve health care.


Pfizer PESTLE Analysis: Final Thoughts

After reading this article, I'm sure you can now list the external macroeconomic factors that impact one of the leading pharmaceutical companies, Pfizer.

This PESTLE analysis identified some of the political, economic, social, technological, legal, and environmental factors upon which the growth of Pfizer depends.

Are you still confused about how PESTLE analysis is conducted? Don't worry once you look at some of the examples of PESTLE analysis, you won't remain confused. PESTLE analysis provided you with the external factors that affect Pfizer. To get insight into internal and external factors affecting Pfizer, look at our Pfizer's SWOT analysis.

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