Strategic Management and Sustainability: AstraZeneca Strategic Analysis

This report provides an analysis of the external and competitive environment of AstraZeneca, a pharmaceutical company in the UK, with the help of frameworks and models such as PESTEL analysis, SWOT analysis, and Porter's Five Forces model. The report also discusses the importance of strategic management and sustainability for the company's growth and success.

Strategic management
and sustainability

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK ..............................................................................................................................................3
External environment analysis....................................................................................................3
Competitive environment............................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES:.............................................................................................................................11
Books and Journals:..................................................................................................................11

INTRODUCTION
Changes in business environment require to formulate an effective strategies so that
companies overcome or handle with the upcoming situations. Strategic management is the
management process in which an organisation manages their resources for achieving goals and
objectives (Makadok, Burton and Barney, 2018). With the help of strategic management
organisations are enjoying many benefits such as higher motivation in employees, increasing rate
of changes, optimum utilisation of scarce resources. This is necessary for a company that they
should analyse the external environment as it creates complexities for organisations (Fuertes and
et.al., 2020). In this context, AstraZeneca is undertaken which is pharmaceutical company of
UK. They have a portfolio of products which is required for dealing with major diseases. After
pandemic, it becomes very difficult for AstraZeneca as the market pressure is increasing
everyday. This report will be discussing the external and competitive environment with the help
of frameworks and models.
MAIN BODY
TASK
External environment analysis
External environment is defined as the environment which has not controlled by
organisations. That means this environment is uncontrollable which may be give positive or
negative impact (Bryson and George, 2020). It is important for companies to analyse the market
so that they will understand the upcoming challenges for them. Organisations are facing many
complex situations due to the external environment forces. Everyday the impact of external
environment in organisation operations is increasing which is necessary to handle for the
survival of company. AstraZeneca is one of the largest pharmaceutical company that run their
business very well in the global market. Due to COVID-19 pandemic situations, they are feeling
pressure and facing many problems (Tseng and Pilcher, 2021). It is found that pandemic
situation increases the demand of vaccines which AstraZeneca found in order to fight with virus.
This is necessary for company to analyse the external market which can be done with the help of
framework. PESTEL is the best model or framework which uses for the purpose of analysing the
external market.
PESTEL Analysis

It is one of the best tool or techniques that used by organisations for the purpose of
analysing external environment. It is found that external environment consists of many factors
such as political, social, economical, environmental, technological and ecological factors. These
factors are giving a great impact on the organisation performances and operations. This is
necessary for AstraZeneca that they should understand these factors for the purpose of
overcoming with the unexpected situations. All the factors are discussed below:
Political factors
Political factors include political stability, tax rates and incentives, legal frameworks,
intellectual property protections, etc. It is necessary for AstraZeneca to understand and analyse
the political factors as it plays a crucial role in the organisation. This factor gives an impact on
the long term profitability of AstraZeneca. AstraZeneca is the Healthcare organisation which is
operating more than dozen countries. That's why they have to face the impact of political factor.
Every country has different rules and regulations as the government is different from one country
to another one which creates complexities for AstraZeneca as they are operating in many
countries (de Klerk, Manuel and Kitada, 2021). After pandemic, it is found that the demand of
vaccines is increasing and every country is contacting to AstraZeneca. Due to excess demands,
they are unable to fulfil the demands of countries, so they require strategic management
approach which assist them to deal with all these issues. With the help of an effective strategic
management, they can easily manage their task and achieve their goals and objectives.

Economic factors
In this factor, it includes saving rate, inflation rate, interest rate, economic cycle, foreign
exchange rate, etc. These are the important factors of economic which gives a great impact on
organisation as it get affected due to demand and supply. Any fluctuations in economic factors
gives an impact on organisation's demand and supply. It is found that due to pandemic, the
economic conditions of every country is get disturbed and demands of medicines & vaccines are
increasing. This imbalance creates problems for AstraZeneca as they have a high demand of
vaccines and medicines but they are not able to supply as economic conditions of countries are
very bad. This factors includes both macro and micro environment. Micro environment involves
competition which is increasing in pharmaceutical industry. This is necessary for AstraZeneca
that they need to gain competitive advantage in order to stay competitive in the market and this
can be done only with the help of effective strategic management. Strategic management helps
AstraZeneca to make strategies according to the current market situations.
Social factors
This factor gives an impact on the culture of an organisation. In this factor, company
needs to analyse the marketers of AstraZeneca that how they will understand the customers in
the market for achievement of target market. In the workplace culture of AstraZeneca, it is found
that marketers are doing activities according to the current trend in society.
Technological Factors
AstraZeneca is the pharmaceutical company in which technology plays an important role
in the success and growth. After pandemic, the work pressure on AstraZeneca is increasing
everyday as they have to manufacture vaccines and medicines which assists people to fight with
the virus (GURL, 2017). It also helps them in stopping the prorogation of virus. This can be done
with the help of new technologies which are able to produce more and more medicines in less
time. For that purpose, company must sure about effective implementation of strategies which is
the important part of strategic management. Formulation should be effective but implementation
of strategy decide the achievement of goals and objectives.
Legal factors
It is also an important factor in which company need to focus on the rules and regulation
of different countries. It is necessary for AstraZeneca to analyse some important laws such as
discrimination law, antitrust law in health care industry, health and safety law, employment law,

etc.
Environment factors
This factor is one of the important factor for pharmaceutical company as they released
many pollutant substances and gases in the environment which create pollution. This is crucial
for AstraZeneca that they should produce or manufacture medicines with minimum pollution as
day by day the environment get polluted. They need to perform a strategic management in which
they have to manage the minimum waste. This will helps in reducing the pollution.
After analysing these factors, it is found that AstraZeneca is the company which are
facing many problems after pandemic. This is necessary for an organisation to focus on strategic
objectives as it assists in achievement of goals and objectives. It is also very helpful in optimum
utilisation of scarce resources. For the purpose of increasing effectiveness in their strategic
management and sustainability, it is significant for AstraZeneca that they should identify and
analyse their core competencies and find their lack areas. This will helps them to formulate
strategic in order to improve the lack areas. This can be done with the help of SWOT analysis.
SWOT analysis
It is the most widely used method in which individuals or organisations are able to
understand the core competencies (Longhurst and et.al., 2020). For the success and growth of an
organisation, it is crucial for them that they should analyse their strengths and weaknesses. This
will assists them to make strategies for working on their weaknesses. SWOT analysis model is
very helpful for an organisation as it assists in identifying opportunities and threats. AstraZeneca
needs to use SWOT analysis so that they can manage their strategies more effectively.
Strengths Weaknesses
 AstraZeneca is ranking at first in
innovation index as they are running
their business very well.
 They are provided high levels of
customer satisfaction with the help of
their customer relationship
management approach.
 They have a successful track record in
development of new products. That
 It is found that in AstraZeneca that they
are not doing an effective financial
planning (Bruijl, 2018). Due to this,
they are not using the cash in an
effective way. It is very necessary for
the successful investment that company
should use financial resources in an
effective way but in AstraZeneca, they

means they are always focus on
innovation in which they fulfil the
needs and wants of customers.
 Due to the successful implementation
or execution of new projects, they are
generating good returns.
 In mergers and acquisition, they have a
successful track record.
 They have a strong distribution network
which increase their profits and returns.
are not doing very well.
 They are not highly successful in
integrating with different types of work
culture in the organisation. Due to this,
they are unable to work with different
people which reduces their profits.
Opportunities Threats
 Everyday the use of medicines is
increasing which shows a great
opportunity for AstraZeneca as they
can take this opportunity for the
success and growth of an organisation.
 After pandemic, the use of medicines
and vaccines are increasing. That
means the consumption in healthcare
industry is increasing which shows an
opportunities to increase their customer
base.
 Their innovation strategy is very
effective in order to grasp opportunity.
 AstraZeneca is facing a threat of
competition as they are operating their
business at global level and due to this,
they lose their competitive advantage.
 It is found that there is the shortage
skilled workforce in the market and
that's why company may be faces a
threat.
After understanding of SWOT analysis, it is found that AstraZeneca is running their
business very well but due to some threats and weakness, company is not able to achieve their
growth and objectives. They are also not gaining competitive advantages. This is necessary for
an organisation to manage their strategies in an effective way so that they can achieve their target
market. Strategic management plays an important role for overcoming with the threats and

weaknesses. It assists in improving their lack areas and convert into their strengths. SWOT
analysis is very helpful for the company as they can grow easily and gain a competitive
advantage by work on weak areas.
Competitive environment
In healthcare industry, everyday the competition is increasing due to globalisation.
AstraZeneca is running their business at global level and that's why they are facing an intense
competition (O'Hara and et.al., 2017). This is necessary for an organisation to analyse the
competitive environment so that they will take significant corrective measures in order to fill
deviations. Competitive environment can be analysed with the help of an appropriate framework
such as Porter's Five Forces model.
Porter's five forces model
It is the model which is used by organisation for the purpose of analysing the competitive
environment. This is found by Michael Porter that there are five forces which gives an impact on
organisation's profitability. The impact of five forces on AstraZeneca is mentioned below:
Threat of New Entrants
In healthcare industry, there are may organisations enter in the market with their low
pricing strategy, innovation, new ways, etc. which gives a pressure on AstraZeneca. It becomes
necessary for AstraZeneca to make strategies and manage them for gaining a competitive

advantage which assists in dealing with the threat of new entrants. In this process, strategic
management plays an important role as they can easily achieve the objectives and reducing the
impact on new entrants (Song, Wang and Zhu, 2018). Strategic management leads to competitive
advantage which reduces the fear of new entrants in the market. They can also build their brand
image in the market more effectively which is very helps for them as customers cannot switch on
other organisation. They can tackle the threats from new entrants by implementing innovative
strategic which should manage so that they can achieve their goals.
Bargaining Power of Suppliers
Bargaining power of suppliers in Porter's five forces model shows the pressure that
provided by suppliers on organisations. Suppliers adopts many different approaches or tactics in
order to give pressure on organisations such as reducing the quality of products, availability of
products, increases the process of products, etc. With the help of these tactics company feels
pressurising and they pay extra to the supplier if they are less in number. Their profit share will
be reducing of the organisation has less number of suppliers. In the case of healthcare industry, it
is found that AstraZeneca has high bargaining power and that's why their profit sharing ratio is
automatically decrease. This is necessary for the company to manage their strategic approaches
in an effective way so that they will achieve their objectives effectively.
Bargaining Power of Buyers
In this force, company will face low profit margin if the bargaining power of buyers is
high. In this case, buyers can easily negotiate as they are many choices in which they can buy
their goods and services. Day by day the bargaining power of AstraZeneca's employees are
increasing and that's why their profit margin is reducing which is not beneficial for organisation.
It can be tackle with the help of formulating an effective strategy in terms of pricing and
marketing.
Threat from Substitute Products
It is the factor in which an organisation has a threat of substitute. In healthcare industry,
everyday the substitute is increasing which create a threat for AstraZeneca as they need to make
sure about their proper strategic management. Increasing in the threat of substitutes reduces the
profits and vice-versa. AstraZeneca has low threat from substitute products as they develop new
products in the market which does not have any threat of substitution. For this continuation, it is

necessary for a company to give importance to their strategic management so that they can
remain in the position of competition.
Rivalry among the existing players
It is found that this is the force in which existing players are in the stage of rivalry which
influence on pricing strategy (Hole, Snehal and Bhaskar, 2019). It is found that AstraZeneca
operates in a highly competitive market in which they need to focus on remaining competitive in
the market. This can be done with the help of effective strategy and strategic management.
From the above discussion, it is found that competitive environment is necessary to
analyse in the market so that they will ensure the success and growth. With the help of this
model, company is able to achieve their goals and objectives.
CONCLUSION
It can be concluded from the above discussion that external environment should be
analysed by organisation so that company is able to analyse the upcoming challenges. This is
necessary for an organisation to use model for analysing external environment such as PESTEL
analysis. This framework is very effective for organisation as they can analyse the external
environment in an effective way. In addition to this, report also covered competitive environment
which influence on the operations and functions of organisation. Company should analyse the
competitive market so that they formulate strategy accordingly. External and competitive
environment has a great impact on strategic management. It gets affected in the process of
managing strategy formulation and implementation.

REFERENCES:
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