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Introduction:
Pfizer Inc. is a research-based diversified health care company with operations around the globe. Pfizer Inc. has three main business groups. They include the Consumer Health Care Group, U.S. Pharmaceuticals Group, and the Pfizer Animal Health Products Segment. For purposes of this case, we will discuss the Animal Health Products Group, where in 1998, accounted for twelve percent of the company's revenues.
Industry Background:
The process for making beef begins with the ranchers breeding and raising cattle, in order to sell them to feedlots. The ranchers' goals are to minimize death of the cattle, to breed low birth weight calves, to produce grade A choice beef, and lastly to produce calves that gain weight quickly. By the time the feedlots purchase the cattle, the more the cattle weights, the better. The next step in the process after the feedlots purchase the cattle is for the feedlots to sell the beef to the meatpackers. There are four main meatpacker companies that account for eighty percent of the entire industry. The meatpackers act as a middleman between the producer and the consumer. Since the majority of this industry is controlled by a few companies, this creates a problem because they act similar to a monopoly. Due to this monopolistic view, there is no free-flow of information throughout the supply chain and beef prices tend to be higher than they should. After the meatpackers have packed the beef, they sell it to retail stores, which in turn sell the meat to us, the consumer.
Industry Trends:
There are a variety of trends that directly influence the beef industry. To beg ...