Corporate Strategy Force - Pestle Analysis
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Added on 2021-02-19
Corporate Strategy Force - Pestle Analysis
Added on 2021-02-19
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CORPORATESTRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................1EXTERNAL ANALYSIS................................................................................................................1PESTLE Analysis........................................................................................................................1Porter's Five Forces Analysis......................................................................................................4INTERNAL ANALYSIS.................................................................................................................5TOWS Analysis..........................................................................................................................5Value Chain Analysis..................................................................................................................7VRIO Analysis:...........................................................................................................................7EVALUATION................................................................................................................................8SAF Criteria................................................................................................................................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONCorporate Strategy refers to an ultimate pathway followed by an organisation which helpsthe firm in gaining an effective edge within the market. Moreover, corporate strategy providesappropriate vision for a company to essentially achieve its set goals and objectives in asustainable manner (Klettner, Clarke and Boersma, 2014). The assignment below is based onGlaxoSmithKline Plc, which is one of the biggest multinational pharmaceutical organisationswithin the UK. The firm is currently entering into a joint venture with Pfizer, another effectivepharmaceutical company situated in New York. The report covers a detailed external analysis othe pharmaceutical industry within the UK as well as internal analysis of the resources and keycompetencies of the organisation. Moreover, the report also includes evaluation of the strategy ofjoint venture using SAF criteria.EXTERNAL ANALYSISPESTLE AnalysisA crucial aspect of a business organisation is an appropriate analysis of externalenvironment of the business in context of determining the opportunities and threats available inthe wider market in context with the industry. Pharmaceutical Industry within the UK has been aforever evolving sector and there are several external factors in the business environment thatsurely have a wide impact on this industry (Papagiannakis, Voudouris and Lioukas, 2014). Toeffectively analyse the same, PESTLE analysis is used that is a framework for assessing theexternal environment. This analysis and the impact of external pointers are discussed below:Political Factors:All the factors under this head of PESTLE analysis are related with different rules andregulations. These are policy of government, political stability and international trade which mayaffect functionality of an industry. In UK legal pharmaceutical sector is highly controlled andregulated by political parties. The major areas which are organised by regulatory bodies aresupply chain, distribution channel and production activities. Sudden exit of Britain fromEuropean Union has created certain risks for this sector which is resulting in continuousreduction in the revenues from import as well as export. Almost 73% of revenues were generatedfrom EU which has declined right after Brexit (Politics and Pharma Market, 2019). Therefore, itis one of the major governmental policy that have affected the economy and specifically this1
sector. Thus, it can be said that this argumentation have resulted in a huge threat forpharmaceutical industry as it has affected political stability with assistance of demand for futuremarketplaces of healthcare.Economical Factors:Different types of factors such as foreign exchange, inflation, deflation, saving andinterest rates. All of them may have positive as well as negative impact on the development andgrowth of the industry and the companies which are executing business under it. Pharmaceuticalsector is contributing almost 8.2% in the revenues that are generated with the help of export allaround the world. Due to this around 113000 employment opportunities have been generatedwhich has resulted in high level of job in UK (Economic implications on Brexit, 2018). If UK isplanning to exit from EU then it can result in decreased growth of pharmaceutical sector due toreduced productivity. It can also affect the foreign direct investment of the sector because theinvestors may loose interest in the companies that are operating business under the industry. Ifthe organisations have ability to pool all their sources with the help of M & A arrangement thenit can help to control the productivity by supporting economic advantage of each other. Social Factors:Different elements which are related to the societal forces are considered as the part ofsocial factors. Population, healthy, education level, poverty etc. are such components which canaffect business of companies due to enhancement and reduction of them. In UK ageingpopulation have higher demand of new and innovative services from pharmaceutical sector asthey are highly concerned with their health. This requirement is considered as an opportunity forthe organisations executing operational activities under this industry (Ageing Population of UK,2017). If all the companies come together and combine all their sources with the help of strategicalliance or merger then it can help them to acquire a better position within the industry. It is onlypossible when they offer new and innovative pharmaceutical products or services to thecustomers which is based upon demographic segmentation.Technological Factors:There are various different types of factors which are considered as the part of thiselement of PESTLE analysis. These are technological advancement, innovative way ofproduction, new ways to conduct research and development activities etc. All the organisation inpharmaceutical industry of UK depend upon research and development activities which helps2
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