Term Paper: Product Piracy Is a Huge Problem

Pages: 3 (1145 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business - Advertising  ·  Buy This Paper

Product piracy is a huge problem that governments and companies face and with the growing sophistication of the world is becoming harder and harder to control. One of the ways in which companies are most impacted by piracy is that it reduces their ability to fund their research and development projects. Piracy is more widespread than popularly believed. In fact, some estimates approximate 9% of the world's products to be counterfeit (Carratu International ) and this number may well be growing. Certain consumer products, such as athletic footwear and music / electronic department are especially susceptible to this trend. In 2000 alone, customs borders of U.S. seized $7.8 million dollars of pirated DVD's, videos, and music CDs ( Bernstein & Munro, 60 ). China boasted that they had once seized $33 billion dollars worth of pirated music disks and videos. This is only a slice of the problem.

Dealing with the problem is difficult and companies and government -- these are the one that are usually most effected -- have tried various strategies. The problem is that products are often easy to imitate. Counterfeiters save by not investing in the expense of research and development, safety testing, and other expenses that go into inventing and crating a product. More so, penalties for piracy are relatively light. In this way, counterfeiters have more to benefit than lose by piracy, and companies / or governments trying to prevent it often find themselves fighting a losing battle.

The best way to address this problem is to instantiate it with a famous company -- Pfizer - that experienced the problem, particularly in regards to one of its most innovative products, Viagra, and found original ways to deal with it. The following essay, therefore, is a treatment of Pfizer, its problems and solutions as well as an analysis of Pfizer's current situation. Recommendation will be derived from the case study.

Pfizer began as a small pharmaceutical company in Brooklyn in 1843. It was Pfizer's perfection of the fermentation process that enabled them to become the world's largest producer of penicillin by the 20th century. Later this was coupled with their strategic excellence in research and development, production, and sales as well as excellent sustainability programs that included social activism and philanthropic activities (Rodengen, 59-77 ). All of this positioned them as a world-renowned company.

By 2004 they were making almost $7 billion and expecting proceeds (Clark, 2003). This case history deals with company's Chinese branch where it operated factories in Dalian and Guangzhou as well as corporate offices in Beijing.

In 2001, Pfizer found that more than 88% of the Viagra bottles showcased on shelves, other than in hospitals, were pirated copies of their own invention. Aside from loss of profit to company, this poses other concerns notably concerns of consumer safety and health (World Health Organization, 8) since counterfeiters rarely go to the trouble and expense of making sure that their pharmaceutical imitation meet the requirements of policies such as the United States Food and Drug Administration. In this case, the Chinese produced counterfeit Viagra had also spread to other parts of the world such as Panama, Mexico, the United States, the Middle East, Russia and Southeast Asia .

Although China had tightened its counterfeiting laws as a result of their inclusion into the World Trade Organization (WTO) in 2001, piracy still occurs at magnanimous rates on local and regional levels. Bribes and extortion compound police… [END OF PREVIEW]

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