Strategic Management and Sustainability in Global Pharmaceutical Industry - Desklib

This report analyses the macro and micro factors of Astrazeneca in the global pharmaceutical industry. It includes SWOT and PESTLE analysis, industry life cycle model, strategic group analysis and Porter's Five Forces.

Strategic management and
sustainability

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Analysing the related framework for Global Pharmaceutical industry.......................................3
Evaluating the competitive environment of Astrazeneca............................................................7
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is a process of setting goals, procedures, and defines the objectives
in terms of make an organization more competitive (Anatolievna and Anatolievna, 2018). There
are various stages of strategic management such as analysis, goal setting, strategy formulating
etc. This report will based on the Astrazeneca, operated in pharmaceutical industry which is
established in 1999 by Astra and Zeneca group in UK. It offers medication and pharmaceutical
drugs, and also provide vaccine for covid-19 at early 2021. This report will analyse the macro
and micro factors by using relevant models in order to determine its external and internal
environment. Furthermore, the report will justify importance of small businesses and venture
start-ups to progress of social economy by using the relevant framework.
Analysing the related framework for Global Pharmaceutical industry
SWOT analysis on Astrazeneca
Swot analysis is used to identify internal factors by using the facts based upon realistic data
to find out strength and weakness that affect the business operations of the firm in the long run.
The SWOT analysis of ASTRA ZENECA is described as follows:

Strength
 The firm has done heavy investment in
research and development departments
with a highly dedicated team
workforce.
 It is operating in more than 100
countries and has employed more than
60000 people (AstraZeneca SWOT and
PESTLE analysis, 2021).
Weakness
 Various controversies, high operational
losses of the firm and bad public
relations created problem for the firm.
 Lack of involvement by the supervisors
and top management as well as
inefficient leadership was a demerit for
the firm (Abdel-Basset, Mohamed and

 It includes various treatment services
for cancer, cardio, neuroscience,
respiratory etc. diseases and is active in
developing new products through
continuous product innovation.
Smarandache, 2018).
 Financial planning is not done properly
and as a result cash is not used
efficiently.
Opportunities
 New technology in the markets has
allowed the firm to follow
differentiated pricing strategy to
maintain its loyal customers and attract
new potential customers.
 The firm also has the opportunity
expanded its channels through online
platforms (Benzaghta and et.al., 2021).
 Decreased cost of transportation can
also bring down the cost of Astra
Zeneca thus providing opportunities to
increase the market share and profits.
Threats
 The firm can be affected by the
continuous fluctuations in the company
lawsuits regarding the products
standards in different markets.
 Unavailability of skilled workforce
globally can also be threat for the
growth of the firm.
 Rising raw material costs can also be
threat for firm profitability.
 Developing drug at a very high cost can
also affect the profitability of the
business
PESTLE analysis
Analysing the factors which are directly affecting the healthcare industries such as
Political, Environmental, Social, Technological, Legal and Economic factors.

Political Factors- Political Factors may have influenced Astrazeneca when government
increases the tax rates and incentives for healthcare industry (Capobianco and et.al., 2021).
Frequently changing in Policies may harm the performance of business by uncertainty of
environment. This is important to analyze the protests by social activists, worker unions and
pressure group towards the organization in order to improve the results.
Economic factors- Organization performances directly influenced by economic
development of the county. Growth rate of GDP will determine the ability of Astrazeneca to
pursue long term strategies for growth. Macro factors that affect the company such as pandemic
of covid-19, rate of inflation, rate of interest and saving rate of FOREX. Major factors that
affected the company such as skill level workforce in the Healthcare industry and Cost of labour
and productivity in the economy.
Social Factors- It is affected by various social factors such as skill and demographics
level of the population (Kools and George, 2020). Astrazeneca should consider the development
of new product to widen the segment of products. Also, hierarchy, class structure and power
structure in the society affect the healthcare industry by imbalance in patients, doctors, clinical
workers and nurses. Lifestyle diseases increases frequent growing number of patients those are
suffering from diseases which are caused by urban lifestyle.

Technological Factors- Technology used by Astrazeneca is one of the most significant
way of being in competition in the highly competitive area of the market. Rapid change in
technology advancement increases the consequences for strategic decision-making process.
Technology advancement affects company by data insecurity because there is possibility of
exchange or leak the personal information of company. Organization hires the training and
development team for particular advanced software which charges high cost.
Environmental Factors- There are various factors that are affected the Astrazeneca
health care industry like, even in a country or in a world there are different environmental norms
which impacted on profitability (Listl, 2019). UK has their own laws and liability clauses in
terms of environmental disaster. Due to decreasing the level of income the demand of
pharmaceutical products affect the company.
Legal Factors- Moreover, Corruption and Bureaucracy also influenced the company
negatively. Also, impacted by weak enforcement of laws and high level of corruption. Legal
factors that affect company while entering into the new market are take care about employment
law, Data protection, Health and safety law. Transparency and process in Judiciary system is a
greater conviction that affect the future plan of the health care industry.
Evaluating the competitive environment of Astrazeneca
Industry life cycle model
This is the model which is used to identify the growth of the business on the following
stages such as introduction, growth, maturity and decline. Industry is made when new products
are been developed and it closed down when it is unable to sustain growth in the long run.
Hence, Industry life cycle is very important for any firm to find out the changes in the industrial
structure, demand technology, competition and much more in the market. Also, it helps the firm
to introduce various product which can be consumed by large masses of people. The stages are
as mentioned below:
Introduction:
This is the stage where unmet medical needs are thought to be accomplished by the firm.
The idea is developed in the minds of the leaders to introduce new product in the market. For this
stage, an extensive research has to be carried to find out what new medicines can be introduced
that does not already exist in the market. Further, the potential customers for this medicine has to

closely identified so that the firm does not incur heavy losses in the future (Snell and Yemen,
2017).
Also, in this stage various patent rights have to be obtained for the drugs so that there is
no government interference in the future. Moreover, various trails have to be given initially on
laboratory animals to find out if the medicine is safe to be introduced in humans or not. Besides
this, in the situations like pandemic the quantity of dose and effects of consuming is also
analysed closely so that it can be found whether it is appropriate for consumption for target
group or not.
Growth:
The growth of the firm attained through advertising the drug in the local markets and
clearly specifying the details so that more number of customers are aware of it. Initially, the
medicines are introduced in smaller groups either through human volunteers or through
successive distribution channels (Soekhai and et.al., 2019). In the growth stage the effectiveness
and the side effects are also known by the Astra Zeneca. With the regulatory approvals and
appropriate pricing the drug is clinically prescribed to the patients in this stage. Moreover, in this
stage the quoted firm reviews and monitor the progress on regular basis to ensure that well-being
of the patient is maintained.
Maturity:
This is the stage where medicine is already launched in the market and further studies are
been conducted to understand the benefit and risk of the drug on a larger scale. Here, the
production process is analysed fully to understand the further potential of medicine within
market. Therefore, all the relative disease or additional diseases may identified which can be
treated in better ways through this medicine. Further, firm conducts detailed research on the drug
to find out any additional warnings associated the medicine so that proper prescription can be
provided to the patients. Besides in this stage primary goals of the company such as total profits
and cash flow from the sale of the drug is calculated so that firm can identify the market position
and availability of similar drugs by the competitor.
Decline:
This is the end of industry to support further growth in the market either because the firm
has become irrelevant or new competitors has entered into the market. It is also due to the
negative impact of demand of drugs in the market which has led to decline in total profits.

Besides this, decline stage of drug can also be due to the expiry of patent and entry of new
rivalries in the market who are selling the drug with similar contents at lower prices. The decline
stage for the quoted firm can also be due to decreased in the profit margin or loss in operations of
the business where firm is reinvesting all its profits back in the manufacturing of further stocks.
Strategic group analysis:
It is the method which is used by the firms to identify company’s profitability using
broad strategic dimensions (Gaol, Rahayu and Matsuo, 2020). There are various dimensions
which can be taken into consideration but some major dimensions taken for the analysis of the
ASTRA ZENECA are as follows:
Basis Astra Zeneca Pfizer Johnson & Johnson
Pricing The firm follows Tiered
pricing method where the
prices are segmented based on
specified target markets
(Marques, Moniz and de
Sousa, 2018)
The prices of this firm
are slightly higher than
other firms as they
ensure easy access and
provides maximum
benefits to its users.
It follows the planned
pricing strategy as well as
psychological pricing
technique by mainly
keeping the prices
according to the
consumers' affordability
Company
size
It has more than 70000
employees working in more
than 100 countries.
It has 78500 employees
in the U.S.A
It has 250 subsidiary
companies and operations
in 60 countries.
Brand
image
It is high value brand in UK
which deals in the treatment of
heart disease and cancer
patients worldwide.
It is the third largest
pharmaceutical
company based on drug
revenue (Galli, 2017).
The company is
established and has ranked
36 in fortune 500 list of
U.S in terms of revenue.
Distributi
on
channels
It follows the direct to
pharmacy model in which the
medicines will be made
available without the mediator.
It sells its products
through distributors,
retail chains, grocery
stores, convenience
stores and other
It has more than 350
distribution centres around
the world to cater the
needs of the individual.

channels.
Product
quality
It follows it owns strict quality
standards and assures greater
quality in its operations.
The goal is to enable
local production of high
quality products by
conducting affordable
operations throughout
the world.
The firm success is based
on providing the premium
quality products and has
gained market through
selling baby products.
Interpretation:
Based on the above, strategic analysis plays an important role in the formulation,
implementation new ideas in the firm. From the above table, it can be said that all the three firms
Astra Zeneca, Pfizer and Johnson & Johnson are very effective in their operations but it can be
said that Astara Zeneca has grown immensely by gaining competitive advantage through its
pricing policy and product quality. Moreover, Astra Zeneca is continuously striving for the well-

being of the people through collaborating with various other companies to provide best of the
services.
Porter's Five Forces
Porter Five Forces is a tool of analysing the strategic management and sustainability in
terms of profitability for a particular industry.
Threats of New entrants (high)- For healthcare industry threats of new entrants is high
because it brings innovating and put pressure on doing new things with the help of lower the
pricing strategy, reducing the cost of product and also providing the new values for the
customers (Marzorati and Pravettoni, 2017). Industries like Astrazeneca has the high barriers
towards the entry in terms of huge capital and legislative hurdles as introduced by
pharmaceutical company. Moreover, the price of competitor's product also affects the demand of
existing customer.

Bargaining Power of Buyers (low)- There are significant power of government over the
pharmaceutical company. This is necessary to offer different prices in terms of geographical
areas and constituency of the market. Healthcare industry have to developed their products that
at least have low side effects so buyer can purchase low to medium power. Buyers demand
sometimes put pressure on the company in the long run when it demands a lot and buying at low
prices.
Bargaining Power of Suppliers (moderate)- Pharmaceutical firms buy their raw
material from numerous suppliers so the switching costs of suppliers are comparatively high.
Emerging markets are affected by various external factors that are characterized by economic
suppliers. There are variations in the infrastructures quality among the suppliers. As such, power
of suppliers are low in the pharmaceutical industry (Milam and et.al., 2020).
Threats from substitute products (high)- Availability of substitute products for
Astrazeneca are comparatively less to other industries. This is the weaker force for company
because it produces for low profit earning. Due to covid-19 the substitute products are increases
as per the quality of the product. However, higher the quality charger high price for it and vice-
versa. There are certain emerging markets that have regards to patent protection. Also, there is a
medium threat of substitutes in the markets. Patent expiration also lead to loss of the revenue.
From the particular knowledge, it is clear that there is a low to high threat of substitutes.
Industry Rivalry (low)- The Astrazeneca industry strives to exploit the prevalent big
opportunities using various technological advances. Moreover, companies in the pharmaceutical
industry face stiff competition from generics when patents of drugs expire. Smaller healthcare
companies focused on certain aspects of the drugs manufacturing process (Narayana, Pati and
Padhi, 2019). Competitors may have large market share and ready to gain position in the market
and gain market share.
CONCLUSION
From the above report it can be summarized that in Covid -19 external and internal
business environment can affect the business operations of firm on a large scale. There are
various factors such as strength weakness, opportunities, legal, social, technological etc. resent in
the environment which has created both positive and negative impact on the working operations
of the Astra Zeneca. Further report has also analysed the impact of porter five forces and

industry life cycle to understand the firms market position in competitive environment. Lastly,
the analysis in this report has proved efficient in finding out existence of various strategic groups
and impact of those groups in pharmaceutical industry through comparison table and chart.

REFERENCES
Books and journals
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry.10(4).p.116.
Benzaghta, M. A. and et.al., 2021. SWOT analysis applications: An integrative literature
review. Journal of Global Business Insights.6(1). pp.54-72.
Galli, B. J., 2017. Applying Strategic Analysis to Quantify Investor Risk of Pfizer
Pharmaceuticals. International Journal of Risk and Contingency Management (IJRCM).6(3).
pp.1-13.
Gaol, F. L., Rahayu, S. and Matsuo, T., 2020. The development of information system with
strategic planning for integrated system in the indonesian pharmaceutical company. Open
Engineering.10(1). pp.721-732.
Marques. C. M., Moniz, S. and de Sousa, J. P., 2018. Strategic decision-making in the
pharmaceutical industry: A unified decision-making framework. Computers & Chemical
Engineering.119. pp.171-189.
Snell, S. A. and Yemen, G., 2017. AstraZeneca: Transforming How New Medicines Flow to
Patients1. Darden Business Publishing Cases.
Soekhai, V. and et.al., 2019. Methods for exploring and eliciting patient preferences in the
medical product lifecycle: a literature review. Drug Discovery Today. 24(7). pp.1324-1331.
Online
AstraZeneca SWOT and PESTLE analysis. 2021. [online]. Available through:
<https://www.swotandpestle.com/astrazeneca/>.