Strategic Management & Sustainability: AstraZeneca Industry Analysis

This report provides a comprehensive strategic analysis of AstraZeneca, a British multinational pharmaceutical and biotechnology company. It begins with an introduction to strategic management and its importance, especially in the context of the Covid-19 pandemic. The report includes a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors affecting AstraZeneca's operations in the UK and globally. A SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. Furthermore, the competitive environment is evaluated using Porter's Five Forces, assessing the bargaining power of suppliers and buyers, the threat of new entrants and substitute products, and competitive rivalry. The report concludes by summarizing the key findings and their implications for AstraZeneca's strategic positioning and sustainability.

Strategic management
and sustainability

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
Evaluation of UK and Global Pharmaceutical industry..............................................................3
Evaluation of competitive environment of AstraZeneca............................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is defined as the process of managing organisational resources for
the purpose of achieving defined goals and objectives in efficient manner. There are various
activities are involved in strategic management such as establishing business objectives, identify
and evaluate competitive environment, formulate strategies, analyse internal factors of business
and ensure the management role in business strategies across the organisation. The pandemic of
Covid-19 impacts business performance and functionality across the globe (Albareda and
Hajikhani, 2019). In this report the chosen organisation is AstraZeneca which is British
multinational pharmaceutical as well as biotechnology organisation founded in the year of 1999.
Headquarter of respective organisation is situated in Cambridge, UK. Organisation provides
variety of products that includes cardiovascular, inflammation, gastrointestinal, infection and
respiratory. AstraZeneca has recently developed Oxford Covid-19 vaccine. In this report Pestle
analysis and swot analysis in the context of AstraZeneca is covered. Furthermore, competitive
environment of respective organisation that includes porter's five forces and industry life-cycle is
mentioned in this report.
TASK
Evaluation of UK and Global Pharmaceutical industry
PESTLE analysis
PESTLE analysis is defined as the strategic framework used by the organisation for the
purpose analysing external environment factors which impacts business performance in positive
as well as negative manner. Factors of Pestle analysis in the context of AstraZeneca are
mentioned below:
Political analysis: Political factors plays important role in in analysing the factors that
impacts business profitability and performance in competitive business environment. As
AstraZeneca organisation conducts its operations in various countries and explore business in
various political environment. In political environment various factors such as political stability
or instability, government policies, trade restrictions and foreign trade policy are included that
affect business functionality (Atiku and Abatan, 2021). Organisation is getting affected by
government policies. Pricing pressure on pharmaceutical products affect business in Europe and
US because government is trying to provide medicines to citizens at low prices.

Positive impact: Brexit facilitates AstraZeneca to survive in competitive environment with stable
profitability through analysing the effective market trends.
Negative impact: As per the political pressure, organisation al profitability is being affected
because business provides medicines to customers at lower prices during the pandemic of covid-
19.
Economic factors: Economic factors affect business functionality and profitability in
positive as well as negative manner. Economic trends, international trade, inflation rate,
unemployment rate and consumer possible income is included in economic factors. The
pandemic affect the lives of every individual in various manner (Bodhanwala and Bodhanwala,
2018). As there are various restrictions are imposed by the government because of that industries
and business are shutting down , impacts overall functionality of business.
Positive impact: Government has formulated various rules for pharmaceutical industry that helps
AstraZeneca to survive in business environment. Low cost of research and development that
capable business to gain all information of economic condition and help to survive in downturn
condition as well.
Negative impact: Due to the impact of Covid-19, economic downturn is faced by the health and
other business sectors. AstraZeneca provides its pharmaceutical products at lower price for the
purpose of surviving as well as capturing the eyes of customers that reduces the profitability
ratio. At the pandemic time consumer possible income is also low that negatively impacts
business performance.
Social factors: In social factor various factors that affect business are included that are
attitude, shared beliefs, population growth, and customer life style trends are included. As people
of UK specially young and middles aged adults are more conscious about healthy lifestyle
(Cokins and Căpușneanu, 2020). The pandemic of Covid-19 affect the life of everyone and make
them more conscious about their immunity as well as compile them to take vaccination doses.
Positive impact: In the pandemic people starts regular practising and haves healthy chooses that
enhance their immune system. This attitude of customer's facilitates AstraZeneca organisation to
increase sales of pharmaceutical and other products that intimately enhances organisational
profitability ratio.

Negative impact: Internet plays important role in affecting the point of view of people because
they can gather information in terms of diseases and its relative medicines that enhances
customers expectation form organisation. The trend of staying fir also reduces the requirement of
pharmaceutical products affect business performance.
Technological factor: Technological factors affect business performance in positive
manner because it provides chances of expansion through adopting automation, research and
innovation and competitor technology as well as development. AstraZeneca takes various
opportunities through implementing latest technologies to connect with customers directly
(Fischer, Brettel and Mauer, 2020). Respective organisation maintains profiles on various social
media channels and advertise to ensure business reachability.
Positive impact: Technological factors impacts positively on business by facilitating
AstraZeneca to advertise products to customers directly that reduces acquisition cost.
Organisation reach large number of customers that enhances organisational profitability and
performance ratio and provide competitive advantages then other competitors.
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. To implement
technological factors in organisational operations, high cost is required that reduces profitability
of AstraZeneca. Direct marketing also spread negative information quickly that impacts
organisational reputation and market positioning as well.
Legal analysis: Government has formulated various rules and regulations that obliged by
the organisation to work efficient such as consumer protection laws, tax and discrimination
health and safety and trade restrictions. On pharmaceutical industry various restrictions are
imposed that affect business performance (Journeault, 2016). AstraZeneca compile these
regulations in business to perform in defined manner in the pandemic of Covid-19. As
organisation is involve in providing vaccine for Covid-19 so it follow all health and safety rules.
Positive impact: Pharmaceutical industries produce and provide vaccine of Covid-19 that
enhances organisational sales and profitability in pandemic. Government has formulated various
laws that are beneficial for AstraZeneca organisation.

Negative impact: Government has given the chance to develop vaccine to selected organisation,
so AstraZeneca faced various difficulties to supply vaccine to other countries because they
banned it for some reasons. Changes in legislation also affect organisational performance.
Environmental analysis: Organisation has worked with the objective of 'Zero carbon
ambition that facilitates AstraZeneca to perform its functions in defined manner and maintain
effective positioning in specific market place (Maas, Schaltegger and Crutzen, 2016).
Organisation has adopt waste management techniques and corporate social responsibility that
help business to attain objective of sustainability.
Positive impact: As AstraZeneca organisation adopts various technologies and CSR that create
great influence on people as well as enhances brand image of organisation.
Negative impact: The concept of zero carbon programme creates pressure on organisation to take
various radical actions in terms of climate impact that negatively affect the functions of
organisation.
SWOT analysis
SWOT analysis is defined as the tool or technique that is implemented by the
organisation for the purpose of assessing internal factors of business that affect business
efficiency and effectiveness. After analysing these factors AstraZeneca develop strategic
planning that facilitates organisation to maintains its differentiated positioning and gain
sustainable competitive advantages (Lee and Raschke, 2020). SWOT is stand for strengths,
weaknesses, opportunities and threats that facilitates organisation to understand its current
positioning. Swot analysis of AstraZeneca organisation is mentioned below:
STRENGTH WEAKNESSES
 AstraZeneca is most popular and
leading organisation that contains
several strengths that differentiate it
form others. Respective organisation
track records efficiently of new
products which is strength of business.
In the endemic organisation is involve
in creating vaccine for Covid-19.
 AstraZeneca invests less in research
and development programmes as
compared to its competitive firms that
affect organisations performance and
profitability. It is required for
organisation to reduce cost of research
and development for gaining the
objective of higher profitability.

 Respective organisation has strong
distribution network that facilitates it to
reach potential market for offering
vaccine of Covid-19 across the globe.
 High level of customer satisfaction,
strong brand portfolio and efficient
performance in new market is the major
strengths of AstraZeneca that provides
various competitive advantages to it.
 Pharmaceutical industry in which
AstraZeneca organisation operated its
operations is quite complex in structure
that enhances internal insufficiency for
business.
 Organisation do not have product
demand forecasting system and
organisational financial planning is not
good and it gains limited success in
core business areas that affect its
performance.
OPPORTUNITIES THREATS
 As AstraZeneca adopts latest
technologies that provides
opportunities to maintain differentiated
pricing strategies in new market. It
maintains loyalty level of customers
through providing quality products and
services.
 Organisation has stable cash flows that
provide opportunity to invest in
adjacent product segment (Ruiz-Ortega,
Parra-Requena and García-Villaverde,
2021). Organisation adopts online
channels to provide its products that
enhances market share of organisation.
 Reducing the cost of transportation also
reduce the shipping prices as well as
being down the cost of overall product
and enhance profitability ratio.
 Intense competition is the major threat
for AstraZeneca. Because of
competition organisation reduces prices
of its products that decrease
organisational profitability and revenue
ratio as well.
 Organisation has faced various lawsuits
in various markets, shortages of skilled
employees, rising prices of raw
material as well as no regular supply of
innovative products is the factors that
enhance threat for business and affect
its functioning in business environment.

Evaluation of competitive environment of AstraZeneca
Porter's five forces analysis of AstraZeneca
Porter's five forces is defined as a model that is used by the AstraZeneca to evaluate as
well as determine competitive forces in industry that shape the structure of organisation. Through
analysing various forces, organisation formulate corporate strategies to maintain effective
positioning of business in economy. Competitive five forces in the context of AstraZeneca are
mentioned below:
Bargaining power of the suppliers: Organisation in healthcare industry purchase raw
material form various suppliers. So the suppliers is not in the condition to control the prices and
bargaining power of suppliers is low for AstraZeneca organisation. There are low switching cost
in industry that make easier for buyers to switch suppliers who provide quality material at
affordable prices (Salaiz, Chiu and Walls, 2021). Respective organisation create efficient supply
chain with various supplies. It develops dedicated suppliers to gain material on time in defined
budget.
Bargaining power of the buyers: Buyers are lot of demanding. They want to buy best
products and services at minimum prices. In healthcare industry number of suppliers are more
then number of buyers so customers have no control on prices of pharmaceutical products. There
is alternative products are available. So the bargaining power of buyers are low for AstraZeneca
organisation. AstraZeneca creates large base of customers and bring innovation in products for
maintaining differentiated positioning in market.
Threat of new entrants: As new entrants bring innovation as well as new ways of doing
things. New entrants creates various difficulties for organisation to operate its functions in
healthcare industry. It pressurised the AstraZeneca organisation to set lower price strategy,
reduce cost and provide value products to customers. Respective organisation manage all these
challenges and threats of new entrants through creating effective barriers to gain competitive
advantages. Organisation being innovation in products and services to attract new customers and
ensure utilisation of resources to reduce cost per unit (Somsuk and Laosirihongthong, 2017).
AstraZeneca invests in research and development to maintain effective positioning in market
then other competitors.

Threat of substitute products (low): substitute products are defined as the physical items
that fulfil similar demands and needs of customers that directly impacts organisational
profitability and performance. In pharmaceutical sector few substitutes are available in market
that facilitates AstraZeneca to gain desirable profitable objectives. Substitutes that are available
in market are offered to customers at higher prices. Respective organisation concentrates on
producing quality products to customers at affordable prices. As AstraZeneca organisation is
service oriented, so it recognise customers needs and demands than provide products and
services accordingly. There is low threat of substitute products to AstraZeneca in pharmaceutical
industry.
Rivalry among existing competitors: Rivalry inside the industry affect business
performance and its profitability ratio. As AstraZeneca organisation operates its functions in
higher competitive healthcare industry that impacts on organisational long term probability.
Respective organisation focuses on creating sustainable differentiation as well as collaborate
with competitors to enhance market share.
Industry life-cycle analysis of AstraZeneca
The industry life cycle is defined as the process that is used by organisation for
evaluation of business. It includes various stages such as introduction, growth, maturity and
decline stage which characteristics are commonly displayed from each other (Vij, 2016). As the
vaccine of Covid-19 is produced by the AstraZeneca AstraZeneca and Oxford that is supply
across the globe. Industry life cycle in the context of AstraZeneca is mentioned below:
Introduction phase: In introduction phase various marketing activities are included that
are launched by the organisation before launching product in market. AstraZeneca creates
collaboration with Oxford for the purpose of developing vaccine for Covid-19 and try it on
individuals to check its effectiveness. Organisation apply for gaining approval of government
and analyse the demand of vaccine in various nations. Respective organisation gained the
authorization for selling vaccine in different nations.
Growth phase: In growth stage of industry life cycle, demand for vaccine is raised after
trail period. In growth stage customers start taking interest in organisational products and
services. AstraZeneca focuses on reducing the side effects of vaccine and do marketing for
influencing people to fully vaccinated. With the increasing the rate of Covid patient, respective
organisation is stand out in growth stage where demand is high for vaccines.

Maturity phase: In maturity phase, the demand of Covid vaccine is sable at definite point
and organisational main focus is upon reducing the cost of vaccine to earn profit. There is
demand of vaccine is slightly reducing that reduces overall organisational profitability objective.
Organisation is remain in no profits no loss situation in this stage. There are cases of side effects
from vaccine are enhanced such as blood clotting that need to be eradicate on urgent bases.
Organisation gained effective marketing positioning in the stage of maturity.
Decline phase: It is the last stage of industry life cycle, organisational efficiency is
reduced because of declining the demand of Covid-19 vaccine. There is noticeable reduction are
measured in sales volume and form start thinking about exiting form industry because of low
profitability. As per the instructions of government most of people in various countries are
vaccinated so, respected organisation announced decline phrase (Wiesner, Chadee and Best,
2018). In this stage, profitability of organisation is reduced and organisation reduce the rate of
production. It is important for AstraZeneca to reduce the production ration at right time to
survive in competitive environment.
CONCLUSION
As per above report, It can be concluded that organisation implements various strategies
frameworks and models for the purpose of identifying strategic positioning of organisation in
specific market place. Organisation conducts PESTLE and SWOT analysis that provides
information about internal as well as external factors to formulate business planning and b
strategies. For competitive analysis, business adopts Porter's five forces. Through implementing
industry life cycle is adopted by the organisation that includes various stages that are used by the
organisation to develop uniqueness in products and services.

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