Global Business Environment: Analysis of GlaxoSmithKline plc

This report analyzes the global business environment and its impact on GlaxoSmithKline plc, a pharmaceutical company. It discusses the internal and external factors, including political, economic, social, technological, legal, and environmental aspects. The report also highlights the strengths, weaknesses, opportunities, and threats faced by the company.

GLOBAL BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
About the company:....................................................................................................................3
The external environment analysis:............................................................................................3
An internal environment analysis:..............................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Business environment is a concept that involves some internal and external factors which
are also known as micro and macro environment factors that has a great influence on operations
as well as decisions of a business firm. Global business environment refers to forces of
environment at global level or from various countries (Dulić and et. al., 2020). Every business
organisation in today's worlds operates beyond their home countries in order to have greater sales
and revenue so enters into global market. Every market has impact on business and hence brings
fluctuations in their workings. Internal factors includes company's analysis of SWOT that is its
Strengths, weaknesses, opportunities and threats. On the other hand macro environment includes
forces that takes birth form political, economic, social, technological, legal and environmental
factors in industry as a whole. The present report discusses about such internal as well as
external factors from global perspective. GlaxoSmithKline plc is a pharmaceutical company
which operates its functions at multinational level is being take into consideration for the report.
TASK
About the company:
GlaxoSmithKline plc is a pharmaceutical company that operates at global level having its
headquarter in United Kingdom. The company is got its establishment in year 2000 through a
merger in between Glaxo Wellcome and SmithKilne Beecham. It not only deals in
pharmaceutical products but also in consumer products and biotechnology goods such as
nutritional items, pharmaceuticals, oral healthcare, vaccines, over the counter medicines and
many more.
The external environment analysis:
External environment refers to those factors that brings barriers in smooth functioning of
business organisation. It sometimes brings positive or favourable conditions and sometimes a
negative or unfavourable impact on organisation as well as on industry (Hoffman and Bowditch,
2020). It includes PESTLE analysis that is a composition of political, economical, social,
technological, legal and environmental factors. Such for are not in control by businesses and
hence requires a quick respond to the impact because any delay can give a set back to company
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either in terms of competition or sales in market. It is very necessary for companies to have
constant check on environment due to its dynamic nature. The study of external environmental
factors in respect of GlaxoSmithKline plc is conducted below:
 Political factor: Political factors includes influence or forces from government that can
bring changes in business operations ass well as on industry. It comprises of forces such
as restrictions on trade, fiscal policy, monetary policy, custom or tax rates, restrictions on
some goods in context to import or export or many other issues (Huridi, Jamaludin and
Hashim, 2020). It also comprises of stability and instability of political party as when
new party came into force it makes it some policies or changes into the exiting one that
needs to be adopted by all companies in economy. Sometimes forces from political party
acts in favour of companies and at some instances it has an adverse effect on businesses.
In context to GlaxoSmithKline plc company has to follow governmental policies in
respect to drug prices as the company deals in pharmaceutical business. A firm also needs to
abide by the rules and regulations in respect of trade and tariff that is in connection with
healthcare. On the other hand company gets support form government as it manufactures those
drugs with are used in benefit of human healthcare and treatment.
 Economical factor: This factor has an impact from economy of nation, its present
condition and development. The economic factors includes exchange rate, growth of
economy, various interest rates, inflation and deflation rate, demand and supply,
purchasing power, real and monetary income of country people, and several more factors
(Moktadir and et. al., 2020). This has a direct impact on company's products and services
prices on which they tends to sell their items in market.
In context to GlaxoSmithKline plc, the company gets continuous support as it offers
healthcare and bio products to country. Economy is always concern towards better health and
treatment of their people so it supplies a good amount of its products into economy. On the other
hand fluctuations in interest rate or exchange rate at multinational level effects company's
profitability in negative way because all countries does not reacts same in rates.
 Social factor: Every company functions its working within a society so it is very
important for company to look social factors and respond according to it. Forces such as
consumer acceptance, attitude, behaviour, preference, demographics, lifestyle, culture,
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and several others has an impact on business and industry according to which they are
required to produce and supply their offerings.
In context to GlaxoSmithKline plc there are few countries which pays more focus on
their health and well being whereas some countries does not have health priority where sales
differs. On the other hand regular and increasing awareness of society people towards their
health allows company to generate more sales that brings higher profits to GlaxoSmithKline plc.
Company is required to have respect for people in order to have long term sustainability in that
market.
 Technological factor: This factor talks about innovation or technological change in
industry that creates an impact on business operations, supply chain or product and
services. It is very necessary for companies to have updates technology in their business
because now a days a world is of immense technology and demands technological
products or services (Njoh, 2020). It includes technological enhancement, research and
development, automation, innovation and many others.
In respect to GlaxoSmithKline plc, the company tries to adopt latest technology in its
operation and brings innovations in its products. They majorly focuses on research and
development department which brings greater scope and opportunities for them that helps them
in having high profits.
 Legal factor: This involves some legal aspects that are related to production or
operations of specific industry. It comprises of certain rules and regulations that a
company needs to take care for their employees as well as their area of operation. Health
and safety, consumer protection, intellectual property and others.
In context to GlaxoSmithKline plc, company is required to follow legal rules for its drug
manufacturing according to policies of all operating countries in which company sales its
products.
 Environmental factor: The factor has an influence from environmental surroundings,
nature and its aspects such as pollution or carbon free products, less wastage or
recyclable products and many others (Pettinger, 2020).
In context to GlaxoSmithKline plc, Company has its more focus on having good and safe
environment near them in order to have natural climate. The business takes care of
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manufacturing less chemical products and drugs along with having less pollution from its
process.
An internal environment analysis:
Internal environment are those factors which takes birth within the company and affects
business at very minimum level that can be controlled by management in time (Romann, 2020).
Internal environment analysis of a company includes SWOT that is a combination of company's
strengths, weaknesses, opportunities and threats which is mentioned below:
Strengths
 Company has a tight presence in global
market by serving its products in more
than 100 countries that helps
GlaxoSmithKline plc to diversify its
risks if any and has a great sales in
market. GlaxoSmithKline plc enjoys a great
competitive advantage by application
of innovation based on sciences and
and having customer centric techniques
in it.
Weaknesses
 Company has faced various allegations
form different countries in respect of
fake prices, unlawful promotion for
drugs, maintenance of less safety, etc.
that has an negative impact on its brand
image.
 GlaxoSmithKline plc has caught up
with patent expiry for certain drugs
which was manufactured in bulk by
company and hence suffered huge
losses in market.
Opportunities
 GlaxoSmithKline plc has a great
opportunity in expanding its business
by a way of acquisition or merger that
helps company in getting competitive
advantage at global level. Company carries an opportunity by
spreading awareness about health care
and it's importance with with they can
generate more sales and revenues.
Threats
 GlaxoSmithKline plc faces huge
competition in market in terms of
generic drugs.
 Company has threat form some
countries where the prices of drugs are
in the hands of government who always
tries to set minimal price for drugs.
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CONCLUSION
From the above report it can be concluded that global business environment includes
internal and external factors that multinational level that can affect company anytime from any
aspect. A company needs to be very careful while going global or is required to have proper
regular scanning towards environment so to have smooth business operations. Internal
environment includes SWOT whereas external comprises of political, economic, social,
technological, legal and environmental concerns. Global business environment possess high
competition in market but also provides scope of increasing sales by catering new market place.
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REFERENCES
Books and Journals
Dulić and et. al., 2020. Implementation of SWOT analysis to evaluate conservation necessity and
utilization of natural wealth: terrestrial orchids as a case study. Journal of
Environmental Planning and Management. 63(12). pp.2265-2286.
Hoffman, D. and Bowditch, A., 2020. The Global Pharmaceutical Industry: The Demise and the
Path to Recovery. Routledge.
Huridi, M.H., Jamaludin, A. and Hashim, R.A., 2020. INVESTIGATING A GLOBALISED
BUSINESS ENVIRONMENTS ON EXPORT PERFORMANCE. International
Journal of Psychosocial Rehabilitation. 24(4).
Moktadir and et. al.., 2020. Critical success factors for a circular economy: Implications for
business strategy and the environment. Business strategy and the environment. 29(8).
pp.3611-3635.
Njoh, A.J., 2020. Nature in the Built Environment: Global Politico-Economic, Geo-Ecologic and
Socio-Historical Perspectives. Springer Nature.
Pettinger, R., 2020. The Socio-Economic Foundations of Sustainable Business: Managing in the
Fourth Industrial Revolution. Springer Nature.
Romann, E., 2020. Implications for Business Strategy and Lessons from Japan in a Global
Business Perspective. In Nonmarket Strategy in Japan (pp. 161-183). Palgrave
Macmillan, Singapore.
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