Bristol Myers Squibb SWOT Weaknesses and an Analysis of Their Accounting Policies

SWOT Analysis: BRISTOL MYERS SQUIBB

Bristol Myers Sqibb SWOT:Weaknesses and an analysis of their accounting policies

Bristol-Myers Squibb was formed after the merger between Bristol Myers and Squibb Pharmaceuticals. The merger took place in 1989, this merger created the second largest drug company in the world. The company headquarters are in New York City and has a workforce of over 35,000 employees. Since the merger, Bristol-Myers Squibb has endeavored to be the leading developer, marketer and licenser of pharmaceutical healthcare products that are used for treatment of cancer, HIV / AIDS, cardiovascular diseases, hepatitis, and rheumatoid arthritis.

The company has been facing some challenges especially in regards to loss of market share for their biggest selling drugs to the generic drug companies. This mostly happens when the market exclusivity period of the drugs they have invented expires. This forces the company to invest so much in Research & Development so that they can enjoy exclusive rights of the drugs they develop. The company has been aggressively working towards acquiring the smaller pharmaceutical companies especially the ones that are in the late stages of their clinical drug tests, these would boost the company's sales as well as boosting its commercial potential.

Weaknesses of Bristol-Myers Squibb

Bristol-Myers Squibb's main weakness is the exposure to generic drugs after the expiry of their drug patents. Many companies that deal with generic drugs always come up with cheaper drugs that serve the same purpose as the drugs developed by the major pharmaceutical companies. This makes the company's sales to drop drastically as people always go for the generic and cheaper drugs. The generic drugs are as good as the other drugs, and they are highly recommended by hospitals due to their cheapness.

Due to these generic drugs the pharmaceutical companies invest heavily in their research and development program so that they can always have a marketable drug before the generic ones hit the market. Bristol-Myers Squibb has a strong pipeline but the drugs they have in their pipeline have to compete with other drugs that were introduced in the market earlier than theirs, and this puts the company at a disadvantage as it is not able to boost its commercial potential.

Another weakness faced by Bristol-Myers Squibb is to get FDA approval on their new drugs. The company invest a lot and does a series of tests before they can forward the drug for FDA approval and if the drug fails to be approved the company incur a lot of losses. Though this does not happen often, when it does it has far reaching consequences and affects the overall performance of the company.

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