Strategic and SWOT Analysis of GlaxoSmithKline (GSK) plc.

Table of contents

Introduction

GlaxoSmithKline plc (GSK) is a British multinational consumer healthcare, vaccines, biologics and pharmaceutical company. It is a 5th ranking FTSE 100 Company based on market capitalization as at closed on 27th July 2012 (Morning Star, 2012). It was established in the year 2000 by the merger of Glaxo Wellcom plc and SmithKline Beecham plc and has its headquarters in London, United Kingdom (GlaxoSmithKline Plc., 2012a).

Strategic Management Process- Macro-environmental scanning, strategy formulation and implementation

According to Sir Andrew Witty, Chief Executive officer of GSK, Pharmaceutical industry is very complex and dynamic in nature. Various sorts of unprecedented challenges are faced by the industry. There is a constant increase of pressure from healthcare providers, regulatory issues and patent expiries. These have contributed to an environment that has subjected to lower growth and high risk factors (Annual Report: GlaxoSmithKline Plc. 2011). GlaxoSmithKline has concentrated their business on three primary priorities i.e., growing diversified global business, delivering more products of value and simplifying the operating model. Through these priorities they aim to deliver sustainable growth, improve long-term financial performance and reduce risks and thus adhere to their mission of improving quality of human life that enables people to do more, feel better and live longer (GlaxoSmithKline Plc., 2012b).

SWOT Analysis

Strengths/Weakness

  • Internal Strong Sales.
  • Good marketing infrastructure.
  • Industry leading R&D team.
  • Ability to cut down on costs.
  • Good balance sheet and financial statements.
  • Effective implementation and execution of strategic priorities, life cycle management strategies and business fundamentals.
  • Initial commercial expectation could not be delivered by R&D team.
  • Highly dependent on competitive and dynamic Central nervous system and respiratory markets.

Opportunities/Threats

  • External Entry into antibodies and biologics segment of market.
  • Potential to deliver strong growth by R&D team.
  • Potential to expand business in emerging markets.
  • Strong cash and assets position.
  • Effect of generic products sales on sales of the company.
  • Change in governmental and federal laws as it concerns with the healthcare.

GSK has capitalised on its strengths and available opportunities over the years and has successfully minimized weaknesses and eliminated threats.

Porter’s Five Forces

  • Threat of new entrants: Due to the high costs required to enter the pharmaceutical and healthcare industry, the threat of new entrants is quite low. The economies of scale for production may not be very significant but there are other barriers to entry. It is very timely and costly process to develop new products that requires extensive research and development (Kasapi, 2011; Gottinger et al., 2010). The government and federal laws and Food and Drug Administration impose strict rules and standards on the companies that can act as a barrier to entry. Patent expiries is a huge barrier for the new entrants in this industry, as the patents last about 20 years and thus the products are protected by their respective companies. The new firms trying to enter the market could find this very discouraging. The already established firms like GSK have constructed strong brand names and loyalty with its customers thus making it difficult for new firms to build up a competitive brand name (Kasapi, 2011).
  • Threat of substitutes: GSK faces a huge threat from generic brand medication- often seen as the main substitute of the products produced by pharmaceutical companies. Complementary Alternative Medicines (CAM) is another substitute of GSK products. The generics, CAM and brand names are the same product delivered to the customers, the only difference being name and price (Kasapi, 2011).
  • Bargaining power of buyers: Buyers do not pose significant threat on GSK, as the company spends most of its R&D to develop new patent products. The major consumers of products are doctors, pharmacists, patients, hospitals and other healthcare facilities. Considering the number of buyers in the market, the power of buyers is relatively small (Otieno, 2006).
  • Bargaining power of suppliers: The main suppliers for GSK are labor, raw material providers, patient’s in clinical trials, study staff, investigators and other ranging from production, marketing to distribution (Otieno, 2006). The suppliers hold immense power and can impose a considerable threat to the company by withholding supplies or reducing the quality of supplies and thus can have a major effect on GSK.
  • Rivalry among competitors: Pharmaceutical industry is very aggressive and dynamic . There is the constant struggle for market share within the dynamics of the industry based on innovation and new patent products. The rivalry is such in this environment where only the strongest would survive (Kasapi, 2011). GSK has used foresight and planning to position them for success in the long term.

Recommendations

GSK should reduce risks and threats by broadening its range, expanding in to new product areas with potential and seizing opportunities across other geographic boundaries. It should explore the segment of vaccines, biopharmaceuticals and consumer healthcare that has definite potential and thus increase its sales growth. It should focus on the geographical potential of its business in emerging markets and economies. GSK should also focus on its R&D team- its training and development and new scientific discoveries to ensure constant delivery of current products and new products in future. The global restructuring programme and the slight change in business model that can open channels of diversification and business growth could be expected to be more profitable in the long-term. It should concentrate on Return on Investment and reducing its working capital to sustain its current position and emerge as a market leader in future.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyStudyWriters
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
excellent job! got an A, thank you
Customer 452773, May 24th, 2023
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Nursing
Impressive writing
Customer 452547, February 6th, 2021
Human Resources Management (HRM)
excellent
Customer 452773, June 25th, 2023
Business and administrative studies
excellent job
Customer 452773, March 12th, 2023
10th grade English
very good
Customer 452773, March 26th, 2023
Business and administrative studies
Thank you for your hard work
Customer 452773, October 19th, 2023
ACC543MANAGERIALACCOUNTINGANDLEGALASPECTS
excellent
Customer 452773, January 25th, 2024
History
Don't really see any of sources I provided, but elsewise its great, thank you!
Customer 452697, May 8th, 2021
BUSINESS LAW
excellent job made a 93
Customer 452773, March 22nd, 2023
Business and administrative studies
excellent paper
Customer 452773, March 3rd, 2023
Business and administrative studies
Thank you
Customer 452773, March 19th, 2023
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat
Close

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp