Pfizer’s recent announcement that it would lay off 10,000 workers amidst tough competition from generic drug makers is sending a shockwave throughout the global manufacturing community. Private label manufacturers are not only here to stay; they are also getting stronger.

Sure, there are plenty of statistics we could throw your way about the growth of private label from the likes of ACNielsen and the other crop of usual suspects in the analyst and research community. But the bold fact of the matter is that private label is becoming stronger and more disruptive to makers of branded goods.

Pfizer is currently feeling the private label pain as the maker of Viagra and other popular drugs said it will lay off 10,000 workers, or about 10 percent of its workforce, due to generic drug makers cashing in on expired patents, enabling them to make cheaper knock-offs. Deutche-Welle provides a decent breakdown of Pfizer’s mounting business woes, summed up succinctly in the following excerpt:

Pfizer chief executive Jeffrey Kindler said the company needed to cut costs because it expected its profits to stagnate over the next two years and be roughly comparable to the $48.4 billion (37 billion euros) it reported for 2006. Analysts predict that profits will drop by almost 40 percent.

“We are facing significant challenges in a profoundly changing business environment,” Kindler said in a statement. “I believe we must fundamentally change the way we run our company to meet these challenges.”

And as mentioned earlier, generic drug makers are cashing in on Pfizer’s expired patents, as implied here:

Pfizer has been suffering from the loss of patent protection on key drugs like the antidepressant Zoloft and the antibiotic Zithromax. Sales of both drugs plunged more than 70 percent in the fourth quarter of 2006, the company said.

The company’s problems are compounded by the fact that Pfizer has not produced a single hit despite an annual research budget of $7 billion. So the lesson here appears to be that you damn well better have a constant flow of hot products to replace the ones that will be gobbled up by the generic industry. How can $7 billion not make this a reality?

But Pfizer isn’t the only company getting its assets kicked. The Wal-Marts of the world are slowly taking a bite out of the branded electronics industry by selling its own line of flat-panel TVs, DVD players and other consumer electronics, according to Electronic News.

Said Chris Crotty, an analyst at market research firm iSuppli:

The large retailers are all increasing their activity in developing their own private label brands for all products, including electronics. Anytime you have a large volume buyer it affects the supply chain. For a lot of reasons this trend will move power away from traditional OEMs to EMS providers and ODMs that work directly with retailers to develop private labels.

In the same Electronic News editorial, CEA economist Shawn Dubravac said retail data for all product categories indicate that private labeling was in the low teens as a percent of total in the early 1990s, reaching 20 percent by decade’s end. While Dubravac believes private label electronics is lagging behind the overall private label trend, electronics is indeed making huge inroads.

Another taste of the rise of private labels can also be found in the apparel industry, according to Exduco, which prominently highlights Hartmarx CEO Homi Patel, challenging students at Kellogg to develop solutions to meet real-world business challenges. Hartmax makes men’s suits and, like other manufacturers, has been forced to adjust to “megatrends” that affect its business every 5 years.

“Ten years ago, we had 25,000 employees working in 37 union factories in the U.S.; today, we have 4,000 people in six factories,” noted Patel, who says fewer retailers retain more power than ever before.

“You can’t sell them all your brands, you can no longer sell exclusivity. There are not enough different enterprises,” said Patel.

Do the same challenges faced by pharma, electronics and apparel also affect your company and industry? If so, how are you combating these problems?