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

This report evaluates the UK and global pharmaceutical industry using PESTLE and SWOT analysis, and analyses the competitive environment of AstraZeneca using Porter's Five Forces and industry life-cycle analysis. The report also covers the impact of COVID-19 on the industry and AstraZeneca's response to it.

Strategic management
and sustainability

Table of Contents
INTRODUCTION...........................................................................................................................3
Evaluation of UK and Global Pharmaceutical industry.........................................................3
Evaluation of competitive environment of AstraZeneca........................................................6
CONCLUSION ...............................................................................................................................9
REFERENCE..................................................................................................................................9

INTRODUCTION
COVID 19 has handicapped the market across the globe which results in various
challenges in the essential supply chain and an upsurge in pharmaceutical industry. AstraZeneca
is taken as base company. AstraZeneca is a British Swedish multinational pharmaceutical and
biotechnology organisation which is established in 1999 with having headquarter in Cambridge,
UK. They having portfolio of products for diseases such as cardiovascular, infection,
gastrointestinal, inflammation and respiratory. Recently, they have developed Oxford
AstraZeneca COVID 19 vaccine. In this report, it covers various frameworks for analysing the
industry as well as sector critically. It also includes the competitive environment of AstraZeneca.
Evaluation of UK and Global Pharmaceutical industry
PESTLE analysis
PESTLE analysis is a framework for analysing all the macro environmental factors which
has an impact on the organisation. In context to the selected organisation, PESTLE analysis is
mentioned below:
Political analysis: Political factors has a significant role in identifying all the elements
which could create impact on the selected organisation and its profitability. The organisation is
operating in more then dozen nations and also expose itself to various distinct forms of political
environment. The major primary political factor which is affecting is pricing pressure form the
government in countries such as Europe, US. This could be affected by the outbreak as
government would be trying to provide pharma product to citizen a low prices (Zaidi, 2020).
Positive impact: AstraZeneca has opportunity of Brexit for surviving with stable
probability for elevating the market share.
Negative impact: The political pressure of reducing the price hike could lead to
loss for several firms and this could affect the organisation's probability as the firm would not be
able to increase based on the demands.
Economic analysis: COVID 19 has impacted the lives of every individual in a way or
other. The restriction created by COVID 19 has lead to shutting down of many industries and
due to this, the research and development is slowed down.

Positive impact: One of the positive impact of low return research and
development is that, it has the opportunity to reduce the research and development costs by
declining the price. The organisation would be capable to encounter the economic conditions
through reducing the research and developing expenditure. As the organisation would eliminate
the costs and elevate the profit margin, they would be able to survive in the economic downturn.
Negative impact: The economic downturn could create impact on various health
services and in response, the selected organisation is required to reduce the price of their
products in effort to capture the eyes of the customers (Ceptureanu and et. al., 2020).
Social factors: The people of UK and across the globe is tends to inclined more towards
health conscious. The young and middle aged adults are very much conscious towards their
healthy life. As COVID 19 has created a significant impact on everyone's life, people are
inclined more towards increasing their immunity as also make sure to take the vaccine.
Positive impact: One of the positive impact is that, people are exercising regularly
practising mindfulness and having healthy choices. This would make them healthy and elevated
their immune system. The selected organisation could increase the sales of its products which are
related to fitness.
Negative impact: The internet has significant effect on the individuals for gather
the information about various diseases and its medicine and compare with other similar
medicines which in results in increasing the expectations of the customers. Also, the trend of
staying fit would reduce the need for the pharmaceutical products.
Technological analysis: The organisation is having unique opportunity of using
technology to market directly to the customers. The advertisements allows the organisation to
communicate with the audience on their most reach portals which would greatly enhance the
advertising potentials (Snelson-Powell, Grosvold and Millington, 2020).
Positive impact: The positive impact of direct advertising is that, the organisation
would be able to lower the consumer acquisition costs and as a result, more number of consumer
could be gained and this would assists the organisation to grow.
Negative impact: One of the negative impact of direct marketing on the
organisation is that, the organisation would be getting low responses rates. Also, direct
marketing makes the negativity spread quickly and this could lead the firm in facing false
accusation.

Legal analysis: The various laws and restrictions has created influence for the global
pharmaceutical industries. In case of UK pharmaceutical industry, one of the major factor which
create influence in the firm is utilization of COVID 19 vaccine (Nasiri, 2021).
Positive impact: The major positive impact is that, the pharmaceutical industries
would be developing vaccine for COVID 19 which would be beneficial for the organisation in
increasing their profits.
Negative impact: The vaccine which is developed by the selected organisation has
faced issues such as many countries have banned by usage of vaccine as people have died after
taking the vaccine which has created a negative impact on the organisation.
Environmental analysis: The organisation has a plan which is known as 'Ambition Zero
Carbon' program in which the firm has committed to create zero carbon emission from
operations globally by 2025 and make sure that their entire value chain is carbon negative by the
year 2030.
Positive impact: The positive impact on the organisation is that, the firm would be
able create a great influence on the individual as well as enhance the brand image of the
organisation.
Negative impact: The zero carbon program would create political pressure of
firms to take radical action regards to climate impact which is having a negative influence on the
organisations (Wijaya and et. al., 2020).
SWOT analysis
SWOT analysis is a tool which is used by organisation for analysing the internal and
external factors which has an impact on it. This tool is also used to evaluate the competitive
position and development of strategic planning. In context to the selected organisation, SWOT
analysis is mentioned below:
STRENGTH WEAKNESSES
 AstraZeneca is one of the most leading
firm across the globe and it has several
strength. One of the major strength is
that, they are having a track record of
creating new products. Recently, they
were able to develop vaccine for
 The organisation is investing less on
research and development as compared
to other players in the industries. The
firm needs to reduce the costs of
research and development in effort to
generate high profits (Sherifi and et. al.,

COVID 19.
 Another strength is that, they are
having strong distribution network
which helps them in reaching the
potential market for provide vaccine for
COVID 19 across the globe.
2020).
 The industry in which AstraZeneca is
operating has a complex structure and
owing to this, the vaccine by the
government was time consuming.
OPPORTUNITIES THREATS
 The organisation has an opportunity to
develop new product for COVID 19 as
people are relying on the vaccine and
the organisation has a great opportunity
to develop more product to reduce the
spreading of the disease.
 Another opportunity is that, the
organisation could develop medicines
related to fitness as people are giving
fitness as their first priority. This
organisation could also make sure that
they develop medicine in such as way
that could also boosts the immunity
system to fight with the disease (Garri,
2021).
 The organisation faces lots of
competition in the industry in which it
is operating. The competition leads to
reducing the price of the products
which would directly impact the
revenue of the organisation.
 The low currency valuation is a threat
to the organisation owing to the
COVID 19 pandemic.
Evaluation of competitive environment of AstraZeneca
Industry five forces analysis of AstraZeneca
Porter's five forces is a model which determines and evaluate the five competitive forces
which could structure the organisation. This analysis is used to determine the corporate strategy
and this could be apply to any segment of the economy. In context to the selected organisation,
Porter's five forces is mentioned below:

Bargaining power of the suppliers (low): The number of suppliers in the pharmaceutical
industry is a lot as compare to buyers which means that the supplier has not much control on the
prices. The products which are developed by these suppliers are standardised as well as less
differentiated and also has a low switching costs which makes easier for the customers to switch
to suppliers (Kaplan, 2020). The organisation could buy new raw material from their suppliers
at a low price and if the costs are not suitable for AstraZeneca, then thy could switch their
suppliers as their switching costs are low.
Bargaining power of the buyers (low): As the number of suppliers are more than buyers,
the consumers are having few organisations to choose from and do not have much control on the
prices. Also, the consumers are not able to find alternative companies which manufacture a
certain commodity. This would makes the bargaining power of consumers low in the
pharmaceutical sector. AstraZeneca could concentrate on the innovation and differentiation to
capture more number of consumers. The product differentiation and quality of the commodities
are vital for the consumers and by focus on this, the organisation would be able to capture large
number of consumers (Vejvar, Lai and Lo, 2020).
Threat of new entrants (low): For the selected organisation, the economic of scale is
difficult for them to achieve in the industry in which it is operating. This makes easier for all
those which is manufacturing large capacitate for having cost advantage. In regard to this, it also
makes the production costlier for all the new players in the industry. Along with this, the product
differentiation is strong where the organisation has the ability to sell differentiated commodities
rather than a standardised product. They are also having strong focus on the customers services
and advertisement which makes the threat of new entrant a weaker force. The organisation could
take advantage of economies of scale and fighting off the new players by cost advantage.
Threat of substitute products (low): There are very few substitute products in the
pharmaceutical sector and which are available are manufactured by a low profit earning
organisations. It depicts that there is no ceiling on the maximum revenue which could be
generated by the organisation. The substitutes which are available are high in quality but
expensive in nature. As compared to other firms, they are selling at a lower price than substitute
which showcases that consumers are less likely to switch to substitute product. AstraZeneca
could concentrate on offering high quality product and as a result, the consumer would be
selecting their products which offers adequate quality at a lower price. They could also

concentrate on differentiating their commodities which would make sure that consumers see
their product as unique and does not switch to substitute products. This could be done by
comprehending the need and wants of the customers by market research.
Rivalry among existing firms (low): The number of competitors in pharmaceutical
industry is less and almost all the organisation in this industry are large in size. This indicates
that the firms can easily be notice whenever they make a move. The pharmaceutical industry is
growing every year and it is expected to continue for more years (Borowski, 2020). This depicts
that competitors are less likely to engage in the competitive action as they do not need to attract
the market share from each other and this makes less rivalry among the existing organisation.
The selected organisation is required to concentrate on differentiating their commodities, so that
the actions of rival organisations would have less effects on their consumers which seek its
unique products.
Industry life-cycle analysis of AstraZeneca
The industry life cycle refers to the evolution of a sector or organisation by which all four
stags that is based on the characteristics commonly depicts in each stage. The COVID 19 vaccine
was developed by AstraZeneca and Oxford which was given to all the individuals across the
globe. In context to the COVID 19 vaccine, the industry life cycle was mentioned below:
Introduction phase: In this phase, it includes the marketing of the product or services
which is launched by the organisation. The selected organisation was collaborated with Oxford
for developing the vaccine and market trials of the vaccine to the individuals. The customers
were interested to know about the vaccine (Sunday and et. al., 2021). The organisation marketed
the vaccine for gaining approvals from the government and identify the demands of the
consumers in distinct nations. The organisation gained the authorization for selling the vaccines
to different firms as well as nations.
Growth phase: In this stage, there is huge demand of the vaccine after successful trials.
The organisation focus on reducing the side effects of the vaccine and do marketing in such a
manner that customers only select their vaccine and not the other vaccine such as Pfizer vaccine.
Recently, due to the increasing number of cases and emergence of Delta variant, the organisation
is stand at growth phase where there is increasing in the demand of the vaccine. Along with this,
the organisation also make sure that every individual can get this shot of vaccine.

Maturity phase: In this phase, the demand of the vaccine tends to stop and the main
concentration would be on reducing the expenses of the vaccine. The selected organisation will
wanted to gain high profitability. There will reduction in the need of growing vaccine and
pharmaceutical organisations providing vaccines would compete with one another in effort to
elevating the profitability prior achieving declining stage. There is side effect associated with the
vaccine which leads in clotting of blood and this is needed to be eradicate so that the selected
organisation have the capability to convince individuals to take the shot of Oxford AstraZeneca
vaccine rather than other vaccine. During the maturity phase, this would assists the organisation
in gaining the efficiency.
Decline phase: The declining stage is the last stage of an industry life cycle, where there
is decrease in the efficiency because of declining in demand and growth support is abolished. As
most of the countries would get vaccinated and the risk of COVID 19 would be removed, hence
the selected organisation will encountered with phase (Moreno-Carmona, Feria-Domínguez and
Troncoso, 2020). As a result, the profits of the organisation will be reduced as well as the
production of vaccine will be decline in effort to survive with less demand of vaccines. This is
vital for AstraZeneca to eliminate the production in stipulated time so that damage caused owing
to declining in demands could be minimised.
CONCLUSION
From the above analysis, it can be concluded that different frameworks are required to be
done so that an effective strategic analysis could be done. In this report, it includes PESTLE
analysis for comprehending the external environment as well as SWOT analysis for evaluating
the internal and external factors of the organisation. Along with this, for analysing the five
forces, Porter's five forces model is also mentioned. At last, industry life cycle analysis is
mentioned for analysing the stages which an industry or organisation passes through with
holding unique characteristics.

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