The common goal of any organization is to achieve its objectives which revolve around profit, survival and prosperity. Robert M. Grant (1991:22) identifies two routes to achieve their objective which includes the location of an industry favorable to earn a rate of return above the competitive level and attain a position of advantage over its competitors within the industry, allowing the company to earn return more than the average return of the industry. Duane Ireland et al (2005) mentioned that internal and external analysis is important for the managers in order to develop and the implement the best strategy by evaluating the capabilities and resources of the firms and customer preferences in the market. Glaxo SmithKline (GSK) with a long history dating back to 18th century produce 9 billion Tums tablet, 6 billion Panadol tablets and 600 million tubes every year with more than 200 million customers worldwide and spends more than £300,000 every hour into research and development for innovation in medicine. The company has been able to compete in the industry with strong customer base all over the world, just because of its business strategy which is aimed at increasing growth, reduce risk and improve GSK’s long term financial performance which include growing a diversified global business, deliver more products of value and simplify GSK’s operating model. The present study aims at identifying the key drivers for change, critical success factors, key business strategies over the past five years using Porters generic strategies and resource and capabilities of GlaxoSmithKline over the past ten years so as to analyze the business strategies.
Table of Contents
1. Introduction
2. Core Elements of the Glaxo Smith Kline
3. Market Share
4. Level and intensity of market competition
5. PESTLE analysis
5.1 Political
5.2 Economic
5.3 Sociological
5.4 Technological
5.5 Environment
5.6 Legal
6. The critical success factors for GSK
7. GSK Business Strategy
7.1 Supplier Power
7.2 Buyer Power
7.3 Substitutes
7.4 Barriers to Entry
8. GSK Resources and Capabilities
8.1 Resources of GSK
8.2 Capabilities
9. Conclusion
Research Objectives and Themes
The study aims to conduct a comprehensive internal and external analysis of GlaxoSmithKline (GSK) to evaluate the company's business strategies, market position, and operational drivers over a five-year period, specifically utilizing Porter's Generic Strategies and PESTLE analysis to understand its competitive advantage.
- Evaluation of core business strategies and growth drivers for GSK.
- Analysis of the pharmaceutical market structure and competitive intensity.
- Assessment of macro-environmental factors affecting global healthcare operations.
- Identification of critical success factors for maintaining market leadership.
- Review of organizational resources and capabilities supporting product innovation.
Excerpt from the Book
PESTLE analysis
The PESTLE analysis of GlaxoSmithKline reveals the following facts.
Political – The international pharmaceutical industry in regulated by national regulatory authorities through various laws and regulations governing the testing , approval, manufacturing, labeling, and marketing of drugs along with safety, price and effectiveness of products. (www.gsk.com)
Economic – As per the data of fiscal year ending December 2007, the company had sales of $45816.1 M with a growth of 0.7% and net income of $10,605.7 million registering a growth of 21.2%. Whereas global pharmaceutical sales in 2007 were £329 billion as compared to £328 billion in 2006 wherein US is the major market with 43% sales led by Europe and France which are followed by other European and Non European nations. (Deshapriya, 2008)
Chapter Summary
Introduction: Provides the organizational background of GSK and explains the importance of internal and external analysis for strategic management.
Core Elements of the Glaxo Smith Kline: Outlines the company's operational structure, focusing on the pharmaceutical and consumer healthcare segments.
Market Share: Examines the global pharmaceutical market landscape and positions GSK as the second-largest company behind Pfizer.
Level and intensity of market competition: Analyzes the competitive nature of the global drug market and the impact of large industry players.
PESTLE analysis: Evaluates the Political, Economic, Sociological, Technological, Environmental, and Legal factors impacting GSK’s global performance.
The critical success factors for GSK: Identifies key drivers such as R&D investment, innovative medicine pipelines, and emerging market expansion.
GSK Business Strategy: Applies Porter’s Five Forces framework to assess supplier power, buyer power, substitutes, and barriers to entry.
GSK Resources and Capabilities: Discusses the financial, intellectual, and human resources that enable GSK to maintain a competitive edge.
Conclusion: Summarizes the findings and reflects on the future potential and challenges of the pharmaceutical industry.
Keywords
GlaxoSmithKline, GSK, Pharmaceutical Industry, Business Strategy, Porter’s Five Forces, PESTLE Analysis, Market Share, Research and Development, Healthcare, Innovation, Competitive Advantage, Emerging Markets, Vaccines, Global Performance, Strategic Management.
Frequently Asked Questions
What is the primary focus of this study?
The study focuses on performing a strategic internal and external analysis of the pharmaceutical company GlaxoSmithKline (GSK) to understand its business drivers and competitive standing.
What are the central themes of the analysis?
The central themes include business strategy evaluation, global market competition, environmental impact assessments, and the analysis of organizational resources and capabilities.
What is the main objective of the research?
The primary objective is to identify key drivers for change and critical success factors by analyzing GSK’s performance over the past five years.
Which scientific frameworks are applied in this research?
The study utilizes Porter’s Five Forces framework and PESTLE analysis to provide a structural evaluation of the company's strategy and macro-environment.
What does the main body of the paper cover?
The main body details the company’s market share, competitive intensity, environmental impact, strategic responses to challenges, and detailed resource capabilities.
How would you describe the core keywords of this work?
The work is defined by terms like pharmaceutical innovation, strategic management, global healthcare, market competition, and organizational resilience.
How has the 'think globally, act locally' strategy influenced GSK?
This strategy has guided GSK to focus on localized market needs while leveraging its global resources and R&D capabilities for expansion.
How does GSK mitigate the threat of product substitution?
GSK mitigates substitution threats by heavily investing in research and development to maintain a constant pipeline of innovative, proprietary pharmaceutical and consumer products.
- Citar trabajo
- Felix Otieno (Autor), 2012, External and Internal Analysis of Glaxo SmithKline, Múnich, GRIN Verlag, https://www.grin.com/document/266192
