Strategic Management and Sustainability in the Pharmaceutical Industry: A Case Study of Astra Zeneca

This case study explores the strategic management and sustainability practices of Astra Zeneca, a biotechnological and pharmaceutical company. It covers the internal and external environment of the company, including SWOT and PESTEL analysis, Porter's Five Forces model, and Industry Life Cycle. The study also provides insights on how Astra Zeneca can maintain a strong brand identity and achieve competitive advantage in the market.

Strategic management
and sustainability

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Introduction to the global pharmaceutical industry in UK..........................................................3
Internal and external environment of Astra Zeneca....................................................................3
Competitive environment of Astra Zeneca.................................................................................7
Conclusion.......................................................................................................................................9
REFERNCES:................................................................................................................................10
Books and Journals:..................................................................................................................10

Introduction
Strategic management consist of managing all strategies made to achieve organisational
goal on time. It is essential for every organisation to manage their strategies in such a way which
will help them to manage their workforce and resources in appropriate way (Dzwigol, 2020).
Sustainability in business reflects the effect a business or organisation have upon environment
and their society. It is essential to adopt sustainability factor in every business because it not only
focuses to the growth of organisation but it also helps to develop the condition of environment
and surrounding societies. Astra Zeneca is a Biotechnological and Pharmaceutical company
which is founded in the year 1999. It is headquartered in Cambridge, UK. The following file
covers internal and external environment of Astra Zeneca and their competitive environment. For
analysing internal environment SWOT model is used and to analyse external environment
PESTEL model is used. On the other hand, for analysing competitive environment Porter Five
Forces model and Industry Life Cycle is used.
Main Body
Introduction to the global pharmaceutical industry in UK
UK is known by their good economic growth and high living of standards for their
population. Pharmaceutical industry of UK plays an important role for the growth of their
economy because few companies of UK based like Astra Zeneca and Glaxo Smith Kline serve
their products and services internationally to many other countries. Annual turnover of UK
pharmaceutical industry is 42 billion British Pounds (Leading 10 analgesic drugs dispensed in
England in 2020, by number of items (2021)). In context to customers of this industry, they
mainly focus on their healths and they are health conscious which force the industry to provide
best medical facilities to their customers. In covid 19 pandemic, the demand of their services and
medicines increases and they are require to serve their medicines to needy people on time. In this
pandemic almost every household demanded medical facilities. It is recorded that Paracetamol
medicines are more manufactured as well as sold to customers in the year 2020-2021 (Leading
10 analgesic drugs dispensed in England in 2020, by number of items (2021)).
Internal and external environment of Astra Zeneca
Swot analysis consist of analysing strength, weakness, opportunities and threats of a company
(Elavarasan and et. al., 2020). In context of Astra Zeneca, Swot analysis are explained below-

Strengths-
 Astra Zeneca is famous good and rapid decision making which helps to handle the issues
as soon as possible. They mainly focus to provide best medicines to their customers as
soon as they ordered.
 They are also gaining benefit of good research and development presence in the existing
market. Their most essential and hard working department is research and development
department which analyse the growth of their company by analysing innovations.
 They adopt good growth strategies and their international presence which is more than
100 countries help them to attract more customers and gain good brand image.
 Product portfolio also help them to grow well. They manufacture medicines for cancer,
infection, respiratory and many others.
Weaknesses-
 Astra Zeneca was affected by shortage of drugs in the covid pandemic because suddenly
they receive many orders of their medicines and their inventory of raw materials are not
managed well to meet such kind of uncertainties. Hence, they face shortage of drugs at a
point.
 They are always highlighted due to their pricing issues. Their customers complain them
that they charge more prices as compare to normal prices.
 Lack of inspirational leadership also impacts negative upon their brand image. Lack of
inspirational leadership creates demotivation for employees and demotivated employees
can not perform well which directly impacts upon productivity of their company.
 The company is having less current assets as compared to their current liabilities which
impacts bad upon company and can cause bad debts for them in future.
Opportunities-
 Social media marketing is a good opportunity for them to grow well and attract more
customers toward their product. Today most the customers uses social media like
Instagram, Facebook and many others to collect information regarding reviews of a
particular company. Hence, they must maintain a good social media marketing content to
maintain good relationship with their customers.

 Technological development is also a good opportunity for them to grow well (Abdel-
Basset, Mohamed and Smarandache, 2018). They are required to develop their
technology in such a way that it will increase their productivity in minimum time period.
 Trade barriers or UK has been reduced which is a good opportunity for Astra Zeneca to
import and export their medicines in more countries.
 Customers of UK are more conscious to their health and they are ready to pay little extra
amount to consume good quality of medicines. Hence, it is a good opportunity for the
company to manufacture good quality of medicines and focus on their packaging to
deliver quality products to their end customers and gain their satisfaction.
Threats-
 Competitors of Astra Zeneca plays an important role in creating biggest threat for them in
their serving industry. Their competitors like Abbot, Glaxo Smith Kline and many others
impacts bad because their competitors focus to have technological development.
 New entrance is also consider as threat for them because in Pharmaceutical industry
when new companies enter the market then they make sure that they will have all
resources appropriately and their investment will high to capture larger part of market.
 Available substitute goods also create threat for the company because their substitute
goods are sold at lower prices and at lower quality which the customers are unaware to
know. Customers prefer to have low priced medicines and this will impact bad upon the
mentioned company.
 Increase in the prices of drugs from their suppliers force them to increase their overall
price of product because when they purchase their raw material on high prices then it will
impact to increase in production cost and increasing in production cost will impact to
increase in product prices.
PESTEL analysis is done to identify the factors of external environment. Astra Zeneca's external
factors are analysed below-
Political factors- It consist of government policies, trade regulations, interest rate and
many others (Song, Sun and Jin, 2017). In context of UK, they are having low interest rate for
their corporates so that they will use banking facilities to develop their business. On the other
hand, there is no trade restrictions in UK for UK based companies. Their government help them
to import and export their products easily. Hence, this will help Astra Zeneca to gain brand

identity in many countries by exporting their medicines and it will also help to import good
quality of drugs from other countries.
Economical factors- It consist of GDP growth rate, inflation rate, employment rate and
many others. In context of UK, they are well known for their higher economic condition which
consist of high employment rate. High employment of UK will help Astra Zeneca to hire well
skilled employees in their companies. On the other hand, low inflation rate is also beneficial for
the company to maintain a fix prices of their product for longer period of time.
Social factors- This factor of PESTEL analysis consist of identifying the impact of
behaviour, attitude, beliefs and values of the population of a nation (Ortega and et. al., 2019). In
context of UK, their population is believe to have high purchasing power and their mind set for
medical facilities are to broad that they are ready to pay high charges to gain good and effective
medical services. Hence, this will help the company to maintain the effectiveness of their
medicine. On the other hand, people of UK are so habitual to consume junk food item that they
have health issues like obesity, high blood sugar level, high BP and many others. Hence, it is a
good opportunity for Astra Zeneca to develop their product portfolio.
Technological factor- It consist of high and advanced technological condition within a
country (Kara, 2018). In context of UK, they are well known for their high and updated
technology. Hence, it is a benefit for Astra Zeneca to adopt high and updated technology in their
company which will help them to produce their medicines rapidly and increase their overall
production and profitability.
Environmental factor- It consist of tourism rate, pollution, climate, temperature and
many other environmental elements. In context of Astra Zeneca, they are required to focus on the
release of carbon dioxide gasses from their manufacturing area. Secondly, there are many other
toxic gases which are used to manufacture many types of medicines. Hence, company must
aware to utilize them in appropriate manner and in required quantity. It is also essential for the
company to analyse their moisture, humidity and many others in atmosphere so that they will
know how to store their medicines to save them from the threat of these mentioned factors.
Legal factors- It consist of legal laws and rules and regulation of a country (Wajid and
Zafar, 2021). In context of UK, their Consumer Protection Law indicates that customers have
full right to complain for a particular product in case that product harms their health. It is
essential for pharmaceutical companies to focus on labelling factor and label few essential

elements like expiry dates, chemical solutions used to manufacture the medicines and many
others. Hence, the strict laws of UK help them to maintain a good discipline for them.
Competitive environment of Astra Zeneca
It is essential for every company to analyse their competitors and their strategies to
analyse what impacts they are putting on one's company (Bruijl, 2018). Hence, to analyse
competitors analyse of Astra Zeneca Porter five forces model is used which is explained below-
Threat of new entrance- New entered companies in Pharmaceutical industry can impact
Astra Zeneca in few ways if they enter the market wit innovative ideas to get more customer
satisfaction, reducing prices, better reach to customers and many others. This threat can be
eliminated when Astra Zeneca have high brand identity and maintain their prices lower then their
competitors. Introducing new services and new medicines will also help them to save from this
treat.
Threat of Substitute goods- Substitute goods are those goods which are used in place of
each other because these products have similar features and characteristics (Grebenshchikova
and Yakushev, 2017). In context of Pharmaceutical industry, many companies copy the products
and methods to manufacture their medicines. It is essential for Astra Zeneca that they will focus
on their services because it might be possible that products will be copied because of their
homogeneous feature but services are not copied by any other company due to their nature of
heterogeneous. It also essential for the company to develop high promotional strategies to aware
their customers for consuming their medicines rather then their substitutes.
Bargaining power of consumers- It consist of understanding total number of customers
and their behaviour toward a particular company. In context of Astra Zeneca, they are having
their business in more than one country which means they have a good number of customers.
Their customers are satisfied with their medicines and services like home deliveries and many
others. It is essential for them to lower their price as compared to their competitors and they must
adopt discounting features in case their customers purchase medicines in bulk. This will help to
satisfy their customers and maintain a strong relationship with them for longer period of time.
Bargaining power of suppliers- Suppliers also plays an important role the growth of any
company (Varelas and Georgopoulos, 2017). In context of Astra Zeneca, their suppliers help
them to provide good quality of drugs which further help them to manufacture quality medicines.
Hence, it is suggested to the company that they must maintain a good relationship with their

suppliers by providing them opportunities like huge discount on their medical purchases.
Secondly, it is recommended to Astra Zeneca to deny to depend on few suppliers and maintain a
good contact with m,any other suppliers because in case these particular number of suppliers
switch to other company then it will provide harm to Astra Zeneca.
Competitive rivalry- It consist of competitors and their strategies on a particular
company. The biggest competitors of Astra Zeneca are Abbott, Glaxo Smith Kline and many
others. In context of Glaxo Smith Kline, they have created a good brand image and well defined
brand identity in most of the countries that their customers trust them and prefer to purchase
medicines from them. Hence, this will impact upon Astra Zeneca. Hence, they are required to
focus on their prices and keep the prices little lower then their competitors to achieve
competitive advantage in the market.
Industry life cycle- It defines the various stages of a business through out it's life. There are five
stages of industrial life cycle which are explained below-
Start-up stage- This is the stage where business starts its operations recently by entering
the industry (Li, Alam and Wang, 2018). Here, they are little unaware about the market and due
to their weak brand identity in the market customers purchases less items from the company.
This is the stage where Astra Zeneca earn low profit due to improper brand identity and large
investment in the technology and other operating systems.
Growth stage- This is the stage where companies start growing well by developing the
features of their product and increasing awareness among customers. In this stage complimentary
products are also available in the market. Hence, customers have more options to purchase those
complementary goods which have lower prices. In context of Astra Zeneca, in their growth stage
most of the competitors start attacking with their strategies and tries to pull down the business of
Astra Zeneca. They start rising revenues for their business and increases promotions.
Shake out stage- It is the stage where companies merges with each other to gain
competitive advantage in the industry (Wang, Tan and Li, 2018). Here some companies
eliminate their business from market due to their improper management. Hence, here the revenue
earning speed becomes lower.
Maturity stage- This is the stage where companies reaches at its peak in earning good
revenue. In context of Astra Zeneca, they reaches their maturity level in the year 2012-2013
where they become good supplier of medicines to most of the stores. Most of the customers

demanding to have medicines of this company. Here, the main aim is to become leader of the
industry. Here, Astra Zeneca attempts those strategies which forces new entered companies to
shut down theier businesses by their competitive strategies.
Decline stage- It is the last stage where companies start shutting down their businesses
from the industry (Hipp, 2020). This is the stage where companies have to face huge losses and
they are unable to bear their losses with their available assets and cash. Hence, they have no
other option to sell their assets and cover their losses. Here, the main reason for declining of
companies is tough competition which forces other smaller companies to leave the industry.
Conclusion
It is concluded that internal and external factors of a business plays an essential role to
make strategies which help a business to operate their operational functions in a proper ways. In
context of Astra Zeneca, they analyse their internal and external business environment which
further help them to handle the situations of uncertainties. To analyse their competitive
environment they uses porter 5 forces model and industry life cycle.

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Li, X., Alam, K.M. and Wang, S., 2018. Trend analysis of Pakistan railways based on industry
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Online
Leading 10 analgesic drugs dispensed in England in 2020, by number of items (2021). [Online]
Available through: <https://www.statista.com/statistics/377895/top-ten-analgesic-drugs-
dispensed-by-item-in-england/>