Strategic Analysis of GlaxoSmithKline plc in the Pharmaceutical Industry

APPLIED CORPORATE
STRATEGY ASSESSMENT:
STRATEGIC ANALYSIS
REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
1. External analysis......................................................................................................................3
2. Internal analysis.......................................................................................................................6
3. Strategy evaluation...................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic analysis termed out as process of collecting research on firm and about its
operating environment to formulate plan of action (Cotterill, 2019 ). Thus, present report is based
on business activities of GlaxoSmithKline plc, it is British pharmaceutical firm headquartered in
Brentford, London. Furthermore, study will cover activities as undertake external analysis with
application of PESTLE & 5 forces on Pharma industry. Also, internal analysis will be conducted
in terms to identify resources and competencies. Lastly, evaluation will be taken with use of
SAFe test.
MAIN BODY
1. External analysis
PESTLE analysis-
PESTLE is termed out as framework of the macro environmental components that mainly
used in terms to undertake environmental scanning of strategic management. Therefore, these are
outlined as-:
Political- From the past few years, the pharmaceutical firms are facing tough political scrutiny at
global level. Additionally, there is growing political intervenes that has created pressure on
healthcare authorities. There are some of countries that has particular framework on
pharmaceutical industry. There are number of laws in regards to safety, standards, certification
and drugs utilisation (Derzon, Clarke and Thurer, 2019). Additionally, there are populist
demand of cheaper drugs for lower classes of society. Due to this, many pharma enterprises are
facing major losses and it results into further fall in price.
Economic- The crisis relates with economical traumas are over but its effects can still be felt.
There are some of the countries in which the issues in relation to economic situation has not been
recovered yet. Such situation leading towards to loss to pharma industries. Additionally,
reduction in disposal income of consumers has wide impact on countries that undertakes the use
of different models of health insurance. However, pressure of economic are seeing as increased
growth within strategic buying groups that are leading down the price.
Social- The increasing ageing population provides the wide range of opportunities and also
contribute as threats to pharmaceutical industry (Liang, Lin and Gao, 2019). In the current era,
the people of old generation is continually enhancing and number of sick people is higher than
ever. Thus, this factor presents the both opportunities and threats to pharma companies.

Additionally, public are more aware than ever before and demands and expectation also have
changed simultaneously and this led to put additional pressure on firms. Social media and varied
other channels made the public active. This led to pharma sector come under pressure over how
they get closer to consumer and maintain profitable growth rates.
Technological- The advancement in techniques aid to creates new business opportunities. This
also affects the pharmaceutical company in huge context. This has brought several opportunities.
Rise of the social networking has given rise to varied new profitable opportunities to enterprise.
In the current era, social media plays the vital role in healthcare sector (Nazri and Sani, 2019 ).
This aids to connect with customers. It also provides pharma sector an opportunity to connect
with wide range of customers and advertise the commodities direct to customers. Henceforth, the
increase of IT brought wide range of opportunities in which cost are also minimum for drug
makers.
Environmental- The environmental risk connected with pharmaceutical firms. Henceforth,
some of the Pharma companies that can pollute the environment. Manufacturing of the drugs
leaves large carbon footprint. To have long term sustainability of pharma industry, environment
laws must have followed. Thus, proper storage and disposal is crucial to prevent negative impact
on environment.
Legal- The pressure of legal authorities is one of the major concern for pharmaceutical sector.
Therefore, there are different countries that has varied laws and legislation and this puts the
negative impact on working of industry (A PESTEL/PESTLE Analysis of Pharmaceutical
Industry, 2018). Pharmaceutical Laws are created mainly to undertake creation, sale, distribution,
and use of pharmaceutical drugs. These laws inclusive of intellectual property rights to protect
drug manufacturers' research, safety standards to protect the public from harmful side effects,
restrictions on marketing drugs to the public, and rules regarding how drugs may be prescribed
and distributed.
Poter's five forces analysis- This is defined as strategic management tool that aids to analyse
the working of industry. Thus, components of this entities are outlined as below contexted
manner as are-
Competitive rivalries- The pharmaceutical sector is one the most competitive industries within
the world. In this, profit margins are high and also inclusive of the small large players that has
strict government regulation (Robinson, Brown and Bambra, 2019). It leads to make the industry