Strategic Analysis of Joint GSK and PFIZER Report 2022

Running head: STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER
STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER
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STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER1
Table of Contents
1. Introduction................................................................................................................2
1.1 The purpose of the report.....................................................................................2
1.2 Company background..........................................................................................2
2. External analysis of GlaxoSmithKline.......................................................................3
2.1 Discussion related to the business environment (PESTLE analysis)...................3
2.2 Porter’s five forces analysis of GlaxoSmithKline................................................6
2.3 Identification of the Opportunities and Threats...................................................8
3. Internal analysis of GlaxoSmithKline........................................................................9
3.1 Resources and capabilities GlaxoSmithKline......................................................9
3.2 Ways by which unique capabilities are linked to competitive advantage..........12
VRIO analysis of GlaxoSmithKline.........................................................................13
4. Strategy evaluation...................................................................................................14
4.1 SWOT analysis of Joint venture........................................................................14
4.2 Suitability...........................................................................................................15
4.3 Acceptability......................................................................................................16
4.4 Feasibility...........................................................................................................16
5. Conclusion................................................................................................................16
6. References................................................................................................................18
7. Appendices...............................................................................................................22
Appendix 1 – Success factors..................................................................................22
Appendix 2 – Cash flow and revenues.....................................................................22
Appendix 3 – Stakeholder power matrix based on joint venture.............................23

STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER2
1. Introduction
1.1 The purpose of the report
The analysis in the report will be related to joint venture that had been developed by
GlaxoSmithKline and Pfizer in the year 2018. The joint venture was able to provide major
opportunities to GSK for improving its strategies and developing value for the shareholders
as well. The report will provide an analysis of the internal and external environment of
GlaxoSmithKline based on the joint venture that has been formed with Pfizer Inc.
1.2 Company background
GlaxoSmithKline plc or GSK is a multinational pharmaceutical organization that has
its headquarters in Brentford, London. The organization had been established in the year
2000 with the help of the merger of two firms namely Glaxo Wellcome and SmithKline
Beecham. GSK has also gained the place of world’s seventh largest pharmaceutical
organization within the year 2015 after companies like Johnson & Johnson, Novartis,
Hoffman-La Roche, Merck and Sanofi. Emma Walmsley had become the CEO of GSK in the
year 2017 and she was also the first female CEO of the firm. The company had earned
revenues of around 21.3 Billion Euros with the sales of its vaccines and drugs (Gsk.com.,
2019).
The external environment will be analysed with the help of PESTLE and Porter’s
framework. Internal environment of the organization will be examined with respect to the
resources and capabilities that have been earned by GlaxoSmithKline in the pharmaceutical
industry. The approach that has been applied by the firm in order to develop the Joint venture
processes with Pfizer Inc. will also be a vital part of the study that will be made in the report.

STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER3
2. External analysis of GlaxoSmithKline
2.1 Discussion related to the business environment (PESTLE analysis)
Political factors – The rise in global expenditures in healthcare has a major influence
in the UK healthcare industry. Financial performance of healthcare ecosystem of the UK
affects GSK and its revenues even after the joint venture with Pfizer Inc. The Brexit based
proposal that was placed in the year 2017 has a major negative impact on the business
environment in the United Kingdom. The organizations like GSK that are a part of the
healthcare sector of UK can be influenced negatively due to low economic growth after
Brexit decision. The exit of the UK from European Union has affected the trade policies that
can influence the prices of GSK. Healthcare is also a major component related to social
welfare in the country and an organization like GSK is considered to be a major contributor
based to the proper improvement of economic growth of the UK and it is an opportunity for
its growth. (Aguinis, Edwards & Bradley, 2017).
Economic factors – The pharmaceutical industry witnessed many high value based
Joint ventures in the last few years. The growth rates of pharmaceutical industry have been
able to surpass many different industries that are a part of the United Kingdom. However, the
economic policies of the country have been influenced by the global financial crisis and
reduction in production volume has affected the manufacturing process of GSK. Government
interventions and labour costs are able to influence the productivity of GSK in the UK due to
the changes that can take place in the tax policies. The effective quality of infrastructure can
have an impact on the skills of the workforce of the organization that is able to provide
growth opportunity to GSK. The business operations of GSK in the United Kingdom have
been based on the effective prioritisation of proper investment of resources in the operations.
The major economic factors that have an impact on GlaxoSmithKline include exchange rates,

STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER4
interest rates, economic policies and the price fluctuations (DiMasi, Grabowski & Hansen,
2016).
Social factors – The changes that have taken place in demands and needs of
consumers have an impact on the products that are offered by pharmaceutical organizations
like GSK. Aging population has also enhanced the sales of GSK in the industry and research
and development based investments have increased due to increase in levels of demands for
the products. The class structure, power structure and hierarchy in the UK society can affect
the attitudes of customers in the UK. The needs of the UK society based on health and
wellbeing will be fulfilled effectively by the products that are offered by GSK. The political
and media attention is also able to play a key part in enhancing the sales of the firm and
provided opportunity of development to GSK (Barrick et al., 2015).
Technological factors – The advancements in technological and scientific
environment have provided support to the industry players so that they are able to adjust to
the changing environments. The pharmaceutical industry has depicted huge levels of
transformation in the last five years and provided chance of growth to the major
organizations. Value chain structure in the healthcare sector can influence the operations of a
firm like GSK. Digital technologies have been able to support the transformation of
healthcare sector of the UK. The “smart health” based approaches have improved the quality
of the products and offered opportunity of profitability improvement. The innovation
processes are encouraged with the assistance of proper research and development made by
GSK (Baumgartner & Rauter, 2017).
Environmental factors – The change in climate and weather can have an impact on
the laws that are developed for controlling pollution. Waste management and reduction of
carbon footprint by production process of GSK can influence its operations. The research and

STRATEGIC ANALYSIS OF JOINT VENTURE OF GSK AND PFIZER5
development activities that are accomplished by the GlaxoSmithKline in the medicine field
have to be based on the laws related to environmental protection. The company is thereby
able to save the image of the brand so that the sales levels can be increased in an effective
manner. The investments that are made in CSR activities are also based on the ways by which
the environment can be saved and offer an opportunity to GSK to improve its image
(Cartwright & Matthews, 2016).
Legal factors – The Discrimination law and anti-trust law are able to affect the
policies that are formed by GSK as the work environment in the organization will be
developed accordingly. Consumer protection is a major aspect related to legal aspects of
GSK. The healthcare based industry is considered to be highly critical in nature and the local
rules have to be taken into consideration in order to save the organization from facing any
lawsuit that provide threats to its operations. The selling and copyright based laws have also
been able to play a key part in the methods by which a major firm like GSK can sustain its
profitable operations (Chatterji et al., 2016).
Figure 1 – PESTLE analysis
PESTL
E
Political factors - UK
economic growth,
social welfare of
health sector.
Legal factors - Compliance
with the legal requirements,
healthcare industry facing
lawsuits.
Environmental factors -
Research and developmemt
related to environmental
protection laws,
investments in CSR.
Technological
factors -
Advancements in
technology,
scientific
advancements.
Social factors - Health
conscious customers,
Media and political
attention.
Economic factors - High
value mergers by GSK,
growth rates of
pharmaceutical industry.