LCBB6004 - AstraZeneca: Strategic Analysis, Sustainability & VRIO

This case study provides a strategic analysis of AstraZeneca, a leading pharmaceutical company, focusing on its key business strategies over the past five years, including its innovation-driven biopharmaceutical approach and cost leadership. It identifies and evaluates AstraZeneca's resources and capabilities using the VRIO model, highlighting valuable, rare, and imitable assets such as financial resources, workforce expertise, patents, and distribution networks. The analysis explores how AstraZeneca implements environmental sustainability practices, such as reducing its carbon footprint and minimizing the impact of its products' life cycle, to gain a competitive advantage and fulfill corporate social responsibility. The report concludes by emphasizing the importance of these strategies in achieving long-term sustainability and success in a competitive industry. Desklib provides access to similar case studies and solved assignments for students.

STRATEGIC ANALYSIS OF
ASTRA ZENECA AND ITS
ENVIRONMENTAL
SUSTAINABILITY
1.

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Key business strategies............................................................................................................................3
Describing resources and capabilities of AstraZeneca.............................................................................6
Evaluating ways in environment sustainability can be implemented by AstraZeneca for having
competitive advantages............................................................................................................................9
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
Strategic analysis is an approach for evaluating business environment in order to
determine its affecting factors. In current era, it is considered to be crucial for having strategic
decision making skills in business for overcoming cut throat competition. To derive smooth
functioning organization need to evaluate its present environment in order to make improvement
in its existing strategies. The present report is based on AstraZeneca a pharmaceutical company.
Current case study will give emphasis on key business strategies utilized over 5 years along with
reasons for pursuing change. Present report will identify resources and capabilities of
AstraZeneca. Case study will involve theories and strategies implement by company for attaining
sustainable environment.
MAIN BODY
Key business strategies
AstraZeneca is one of the leading organizations of UK which has attained success due to
its prompt nature of cooperating with changing business environment. There are several
strategies that firm utilizes for having smooth functioning and competitive advantages. The
different types of approaches utilized to pursue changes which can overcome the pressure that is
affecting its growth. company’s strategy of returning to growth concentrates on building key
growth platform, accelerating development and converting prevailing shape into specialist care
business structure. Driving growth via innovation & commercial expertise for maximizing
profitability through monitoring cost for efficient working of business.
The one of the most important strategy followed by firm is execution of innovation
driven global biopharmaceuticals approach. In addition to this, it is implemented with aim of
educing cost by executing value leadership strategy that helps business to handle growth. It has
aimed to produce a great quality medicines to innovate more products for dealing with diseases.
Organization has clearly segregated its way of dealing with products, customers, etc. in addition
to this, marketing strategy like innovation, customers’ services, marketing investment for gaining
organizational objectives and goals (Lin and et.al., 2021). Marketing mix of AstraZeneca is

framework that helped as framework for defining the changes which are required to pursue in
respect to achieve competitive benefits.
Respective organization has adopted product strategy & mix for proper management
regarding vast product line. It is necessary for enterprise to build a good product portfolio for
meeting with changing circumstances. This comprises diabetes, gastrointestinal, infectious,
oncology, neuroscience, cardiovascular, anesthetics, etc. in addition to this, implementing this
particular segment of health care more effectively provides guidance to move towards success.
Cost leadership is executed in AstraZeneca for making its pricing strategy more effectual
(Moktadir and et.al., 2020). This provides opportunity to make the market base broader by
declining related expenditures. Cost leadership is focuses on overhead control by paying
attention on marginal customer accountants, research and development, etc. with respect to this,
place and distribution, promotional & advertising strategy of specified organization provide
contribution in modifying prevailing situation for reaching desirable position.
Cost leadership play significant role in reducing expenditure by removing irrelevant
expenses so that profit margin can be extended. Firm has focused on this in order to derive
competitive advantages by making improvements in way of dealing with products, prices, etc.
with respect to this, cost declination provide various benefits to business to accomplish
objectives in desire pattern (Ukko and et.al., 2019). Competition in industry has reached to peak
level which forces every firm to pursue the changes that can enhance their profitability as well
wealth. This gives chance to produce highly standard products; adopt advanced technology for
serving better customer services. Increased profits, stakeholders’ wealth, etc are main motive of
organization fro implementing any business approach so that company can sustain for longer
duration & achieve economies of scale.
The organization has as well pay attention on driving its cultural transformation &
operational modification for achieving predetermined goals. This has permit firm to invest in
research and development for serving more innovative services in industry. It resulted in profit
maximization and business developments which lead AstraZeneca towards success. Cost
Leadership helped company to focus on three core areas which renewed research and
development productivity & growth of pipelines for achieving significant value related to
stakeholders (Yuan and et.al., 2020). This encourages its capital generating capacity by reducing

cost that resource company to focus on development, discovery and commercialization of
products. Cost leadership has provide assistance to firm to innovate the products according to
prevailing situation such as Pandemic.
From the above graph it can be evaluated that profit of organization from 2006 to 2020
has been shown for better understanding. The firm has adopted the several strategies to fro
encouraging the factors that influence revenue in positive manner. Profit has increased from
2017 to 2020 in case of emerging markets. There are various tactics that AstraZeneca that can
improve the prevailing business environment of lower profitability. Cost leadership can help
business to derive competitive advantages by gaining success in order to overcome cut throat
competition. The pricing determination procedure of firm has also give emphasis for obtaining
better profitability margins. In addition to this, increase in margin will ultimate encourage firm’s
revenue therefore the mentioned strategies are utilized by AstraZeneca. It provides efficiency,
size, shape, scale and better experience. Advanced technological usage becomes possible with
help of cost leadership strategy.

Describing resources and capabilities of AstraZeneca
Being a large organization it becomes necessary for firm to have various competitive
advantages so that company can handle cut throat competition in effective manner. The VRIO
model would be suitable for AstraZeneca for identifying its internal resources which aids
competitive benefits. Each stage of company is assessed with help of VRIO model which
resource enterprise to know improvement areas for bettering existing situation. It comprises
evaluation of valuable, rare, imitable and organization (Buzatu and et.al., 2019). Resources of
organization can be divided into two parts tangible and intangible for better clarity.
Financial resources of organization are highly valuable because this provides
opportunities in investing into outside opportunities for further development. External problems
can be overcome with help of financial resources. Proper allocation helps business to have
transparency regarding present and future requirements so that ability to meet contingency need
can be exerted easily. Local food products are also considered to be valuable resource due to its
differentiated characteristics as customer give high value for these. Employees of AstraZeneca
are important portion of company as they are highly trained, qualified, etc. In addition to this,
workforce of organization is considered to valuable due to their capability of sharing high
potential for increasing productivity (Vargas-Hernandez and Lopez, 2021). An enhanced effort
gives firm to gain desirable position by optimizing workforce efforts. Moreover, company
focuses on making its subordinates more loyal, committed and engaged, etc.
Patent permits AstraZeneca to offer its differentiated products to buyers without any
competitive interference. This assist business to be free from unnecessary burden and focus on
enlarging process of selling goods and services for increasing revenue. Distribution network of
concerned organization is one of the valuable resources as it plays crucial role in connecting
with customers in right manner. Effectiveness of promotional activities is dependent on firm’s
effectiveness of distribution channel. Cost structure is not valuable resource of AstraZeneca as
competitors are more efficient than company in declining unnecessary expenses. Non valuable
cost plan restrict enterprise to exceed the level of profit margins (LEE, KIM and PARK, 2020).
In addition to this, inability in increasing profitability reduces company’s chances to go ahead
from competitors. Research and development is as well not severing valuable part of

organization due to its less competitive advantages providing facility. The improvement
measures for R&D have been exerted by AstraZeneca.
Rare are those resources that are only found in specified organization and not in other
firms. This serves various advantages for achieving success by accepting changing circumstances
of firm. From VRIO analysis it can be identified that financial resources of organization are
evaluated as rare component. Cost leadership strategy has been implemented in order to make its
financial resources more competitive so that desirable position can be obtained. Local foods are
easily offered by other competitors so it does not align highly with product innovativeness
strategy of enterprise. Workforce of business are valuable as well rare according to VRIO
analysis as this gives competitive opportunity grabbing capability by making use of skills,
attributes, experience, etc. once the workforce is ready to adopt changing environment it solves
half of the problem via increasing institutions capability for cooperating with customers
requirements. Patents and distribution channel is as well rare resources.
Imitable resources are company’s those aspects which has no substitute and gives
immense advantage to organization. Organization resources provide better succession
opportunities. In addition to this, financial resources are organized to capture value to invest in
the right manner for tackling threats. Patent is difficult to imitate as evaluated by VRIO
evaluation of AstraZeneca. The reason behind this is due to legal prohibition in usage of other
firms’ identifying while selling goods and services (Vargas-Hernandez and Garcia, 2019). The
alignment approach with marketing mix fro product, price, etc. it helps enterprise in encouraging
customers to trust organization for products. Attaining trustworthiness in pharmaceutical
industry is one of the determinants of success so achieving this is considered to be imitable

resources. This can be properly understood by the following VRIO analysis:
Resources value Rare Imitation Organization Competitive
Advantage
Distribution and
logistics cost
competitiveness
Yes No It is
difficult for
similar firm
to imitate
Yes Long term benefits
Access to cheap
capital
Yes No May be
copied by
competitors
No No merits

Pricing approach Yes No Can be
imitated by
similar firm
Yes Temporary competitive
advantage
Customer
network and
loyalty
yes yes Copied by
competitors
but failed
Attaining for
good impact
Medium term
competitive advantage
Financial
resources
Yes No Attempted
by
competitors
Organization
has effective
financial
position
Temporary competitive
advantage
Supply chain
network
flexibility
Yes Yes Competitors
have same
Business
optimistically
use this
Helps business to
function smoothly
Execution of
digital strategy
YES NO May be
imitated by
competitors
Leading firm
in sector
Sustainable
competitive advantage
(VRIO Framework,
2020).
Evaluating ways in environment sustainability can be implemented by AstraZeneca for having
competitive advantages
Sustainability is the process of maintaining proper balance in consumption and available
resources for safeguarding the interest related to future generation. There are several ways in
which firm attempts to obtain the competitive merits by executing number of theories,
approaches, and strategies. In addition to this, the AstraZeneca being a large corporation require
to fulfill its both corporate as well social responsibilities for effective functioning of enterprise.
Ensuring standard quality of environment along with product help both organization and public
to accomplish objectives (Kong and et.al., 2021). It can be analyzed from various sources that
company has taken important measures into consideration for protecting environment. Reducing
its operational adverse impact by declining carbon footprint ensures environment safety.
For enhancing competitiveness it has focused on resource conservation which leads
increased speed of supply chain. Minimizing the impact across product life cycle provides

opportunity to reduce effect chemical substances on nature (Ahmed and et.al., 2020). The course
of action comprises analysis of product life cycle assessment for determining available threats
and opportunities. In addition to this, development of risk management approach for launching
new products, applying sustainable chemical universal principles in production process, etc these
are some of course of action that gives understanding regarding actual impact of hazardous
chemical in consumption. Evaluating early development plan, green chemistry, emission from
patients use & manufacturing, unused medicines disposal procedure, etc. Continuous assessment
regarding final product effect on environment aid organization finds corrective actions at initial
stage only. These are some of the strategy adopted by AstraZeneca for achieving environmental
sustainability. Once it obtained the tag of green strategy player in industry it can derive various
competitive advantages. Good reputation regarding fulfillment of social as well corporate
responsibility resource organization to show its quickness in attaining duties and roles.
Having responsible approach regarding waste management is one of the key strength of
any business. Segregating waste into two parts such as hazardous and reusable declines not only
cost but also increases production speed (Hassan, Arif and Shariq, 2019). The ability of
procuring resources and disposing end non useable outcome play significant role in influencing
success. Determinant of success not only rely on quality of product but also depends on
capability of accomplishing end responsibilities. AstraZeneca plays crucial role in encouraging
the environment sustainability through paying attention on influencing factors.
Sustainable business integration is obtained by AstraZeneca through making core strategy
such as investors relations, risk management, workforce engagement, code of ethics, etc. it ahs
made standards for achieving full potential of employees by giving emphasis on positive
participation and engagement, etc. Development of AstraZeneca is encouraged by loyal and
committed employees which leads organization towards desirable position. Having code of
ethics provides clear and concise direction & guidance to subordinates that contribute in moving
towards right path. Attaining sustainable management through efficient use of natural resources
via demonstrating global leadership programs for positive societal impact & ethical behavior in
all market of its value chain.
There are following benefits that organization has received from implementing the
mentioned model such as reduced energy cost, attracting new customers segments, tax

incentives, boost workforce morale, etc. obtaining positive impact on all aspect of operational
activities is one of the motive that accomplished through deriving competitive advantages
(Raszkowski and Bartniczak, 2018). Increasing productivity by declination of value incurred in
for producing the products is one of the significant competitive advantages that organization can
derive through implementing sustainable environment science theories, etc. Compliance with
legal rules and regulation is also enhanced by executing the specified approach in business
(Bekun, Alola, and Sarkodie, 2019). AstraZeneca has also obtained reduced waste which in turn
declined the cost of production which increased profitability. Improved regulatory compliance
increases opportunities for gaining trustworthiness in industry. In addition to this, there are
numerous regulations that expect firm to adhere environmental norms for continuing business
operations. In order to attain this, firm play significant role in showing accomplishment of its
environment responsibility for attracting stakeholders. Improved brand image is one of the
significant merit which leads firm to sell more products as compared to other competitors.
Higher coverage of market share becomes possible with help of sustainable theory. With respect
to this, many benefits are derived for getting larger profitability and sustainability. An effective
procedure for deriving sustainable growth and development becomes possible by having these
unique characteristics. Assessing different ways with changing circumstances becomes essential
for overcoming cut throat competition as tackling challenges without fierce advantages becomes
difficult for enterprise.
CONCLUSION
From the above report it can be concluded that strategic management helped organization
to monitor its resources effectively. The current report has given emphasis on business strategies
often AstraZeneca. In addition to this, cost leadership, etc. framework has been utilized by firm
in respect to pursue change. Current case study has included the VRIO approach for showing
resources and abilities for overcoming competition. It has represented tabular format of VRIO
for showing medium-longer merciless advantages. Furthermore, present report has involved the
ways in which company can implement sustainable environmental science & theories for
attaining competitive benefits.

REFERENCES
Books and Journals
Hassan, A., Arif, M. and Shariq, M., 2019. Use of geopolymer concrete for a cleaner and
sustainable environment–A review of mechanical properties and
microstructure. Journal of cleaner production. 223. pp.704-728.
Raszkowski, A. and Bartniczak, B., 2018. Towards sustainable regional development: economy,
society, environment, good governance based on the example of Polish
regions. Transformations in Business & Economics. 17(2 (44)).
Ahmed, Z and et.al., 2020. Moving towards a sustainable environment: the dynamic linkage
between natural resources, human capital, urbanization, economic
growth, and ecological footprint in China. Resources Policy. 67.
p.101677.
Kong, L. and et.al., 2021. CSR as a potential motivator to shape employees’ view towards nature
for a sustainable workplace environment. Sustainability. 13(3). p.1499.
Bekun, F. V., Alola, A. A. and Sarkodie, S. A., 2019. Toward a sustainable environment: Nexus
between CO2 emissions, resource rent, renewable and nonrenewable
energy in 16-EU countries. Science of the Total Environment. 657.
pp.1023-1029.
Vargas-Hernandez, J. G. and Garcia, F. C., 2019. The Link between a Firm´ s Internal
Characteristics and Performance: GPTW & VRIO Dimension
Analysis. REBRAE. 12(1). pp.19-30.
LEE, J. H., KIM, T. and PARK, H., 2020. Smart Study's Strategy in the Kids Content Industry:
VRIO Framework. The Journal of Economics, Marketing and
Management. 8(3). pp.1-8.
Vargas-Hernandez, J. G. and Lopez, J. A. L. L. J., 2021. Resources and Capabilities of SMEs
Through a Circular Green Economy. International Journal of Circular
Economy and Waste Management (IJCEWM). 1(1). pp.1-15.
Buzatu, A. I. and et.al., 2019. Managing organizations for sustainable business development:
Interaction between VRIO framework and Mckinsey 7s framework. New
trends in sustainable business and consumption. pp.243-251.
Yuan, Y. and et.al., 2020. Business strategy and corporate social responsibility. Journal of
Business Ethics. 162(2). pp.359-377.

Ukko, J. and et.al., 2019. Sustainability strategy as a moderator in the relationship between
digital business strategy and financial performance. Journal of Cleaner
Production. 236. p.117626.
Moktadir, M.A. and et.al., 2020. Critical success factors for a circular economy: Implications for
business strategy and the environment. Business strategy and the
environment. 29(8). pp.3611-3635.
Lin, Y.E and et.al., 2021. Corporate social responsibility and investment efficiency: Does
business strategy matter?. International Review of Financial Analysis. 73.
p.101585.
Online
VRIO Framework. 2020. [Online]. Available through: <
https://strategicmanagementinsight.com/tools/vrio.html>