AstraZeneca: Strategic Management, Sustainability, and Competition

This report provides a detailed analysis of AstraZeneca's strategic management and sustainability practices within the UK and global pharmaceutical industry. It employs frameworks such as Porter's Five Forces and PESTLE to critically evaluate the industry and sector, determining the competitive environment in which AstraZeneca operates. The analysis covers the threat of new entrants, bargaining power of suppliers and buyers, the threat of substitute products, and rivalry among existing firms. Political, economic, social, technological, environmental, and legal factors impacting AstraZeneca are examined through PESTLE analysis. A SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The report concludes by assessing AstraZeneca's competitive environment using Porter's Five Forces, focusing on strategies to address threats from new entrants and the bargaining power of suppliers.

Strategic management and
sustainability

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Determine with evidence the UK and the global pharmaceutical industry. Use related
frameworks to analyse industry and sector critically..................................................................3
Determine with evidence the competitive environment of AstraZeneca.....................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
It becomes important to analyse the business environment in order to evaluate the impact
of different external macro factors on business performance and decision making. There are
certain environment analysis tools that not only determines the impact of such factors but also
supports to define the competition and the strategies that a business needs to implement
pertaining to different situational context. AstraZeneca is a British global pharmaceutical
company which headquartered in England, UK. It is a public limited company founded in the
year 1999. AstraZeneca sells pharmaceutical products for major diseases such as infection,
neuroscience, respiratory, inflammation and others. It is also a famous pharmaceutical brand
known for making Oxford AstraZeneca COVID-19 vaccine. This report talks about the industry
and sector analysis in the context of AstraZeneca and evaluation of competitive environment
supported with the theories, models and relevant sources (Alyoubi, 2015).
MAIN BODY
Determine with evidence the UK and the global pharmaceutical industry. Use related
frameworks to analyse industry and sector critically.
Industry five forces analysis
Industry five forces analysis conducted on the healthcare industry in which AstraZeneca plc
operates.
Threat of new entrants
(Porter’s Five Forces Analysis. 2021) Economies of scale is challenging to accomplish in the
industry where the AstraZeneca plc operates which makes huge cost for new entrants in the
healthcare industry and large businesses like AstraZeneca plc enjoys producing production at
large rate and attains economies of scale in the production function.
In Healthcare industry product different is strong where businesses sell differentiated products
that attracts the customers to purchase. Businesses in healthcare industry looks over strong
advertisement and customer services. Thus, such factors make challenging for new businesses in
the healthcare industry.

The capital required for entering into healthcare industries is relatively higher than any other
industry therefore it creates hindrance and a challenge for new entrants into the market.
Bargaining power of suppliers
The control of suppliers is less as there are large number of suppliers in the healthcare industry
that means that suppliers have a weaker control for influencing the prices in the market.
The products offered by the suppliers in the market are standardised and that helps businesses
like AstraZeneca to conveniently switch suppliers (Amason and Ward, 2020).
Threat of substitute products
The industry in which AstraZeneca operates have a very few substitute products. The substitute
products are produced by small businesses earning lower profit as a result there is no a fixed
ceiling over the profit in which AstraZeneca operates.
The few substitutes operating in the industry sells products at higher cost in order to cover
quality and the cost of production. AstraZeneca sells products at lower prices covering quality
than the substitute products which leads the buyers no reason for switching to substitute
products. This also concludes that the threat of substitute products is relatively weaker.
Rivalry among the existing firms
The competitor in the healthcare industry where AstraZeneca operates are relatively less. Most of
the businesses are large-scale businesses. The lesser number of competitors in the market makes
rivalry among existing firms weaker.
The few competitors in the industry in which AstraZeneca operates are generally large
businesses where there are more chances that these businesses become market leader, thus, it can
also be said that rivalry among existing firms is stronger (Barca, 2017).
The industry in which AstraZeneca operates have a positive industry growth that also leads to
conclusion that the competitors do not want to capture each other’s market share. Thus, such
factors make rivalry among the existing firms weaker.

The industry in which AstraZeneca operates, products offered a highly unique and differentiated
that further draws that the competitive firms sustains in the marketplace because they sell
differentiated products thus such factors make the competitive rivalry weaker.
The industry in which AstraZeneca operates involves higher capacity of production that further
disturb the balance of supply and demand resulting to overproduction situations. Due to
overproduction the prices of products are also reduced. Such factors make rivalry among the
existing firms stronger.
The barriers of exit from the industry is higher due to government restrictions. Thus, businesses
which are not willing to continue the business have to continue even at lower profits. Such
factors make competitive rivalry among existing firms stronger (Bettis and et.al., 2015).
Bargaining power of buyers
The industry in which AstraZeneca operates, quality plays an important role, where buyers want
to have quality products irrespective of the prices which further reflects that buyer in the industry
are less price sensitive. Such factors reflect that buyers have weaker control within the industry.
The income of the buyers in the industry is relatively low which result is that the buyers want to
make purchases at lower prices and they become more price sensitive. Thus, it can be said that
the buying power of buyers have a weaker force in the industry.
PESTLE analysis conducted on AstraZeneca Plc. is supported as:
Political factors
(AstraZeneca PLC PESTEL Analysis. 2018) Political factors have a significant impact on the
long-term profitability of the association. As AstraZeneca plc operates in healthcare industry, it
is more exposed to different political environment and systems. AstraZeneca Plc scrutinise all
such political factors and their influence on the business activity, these political factors are as:
The tax rates and incentives, the bureaucracy in the healthcare sector, the industrial regulations
formulated for healthcare Sector, corruption in healthcare industry is also a factor that influence

the business performance, the trade norms and regulations pertaining to the healthcare sector, the
political stability pertaining to the healthcare sector in a particular economy and others.
Economic factors
There are certain economic factors such as savings rate, interest rates, inflation rates that have
ability to impact the business activities operating in an economy. The healthcare sector growth
rate, how consumer spends for healthcare are also certain factors that affects the business
performance of AstraZeneca in a specific economy. Further, there are a number of such
economic factors which are considered while analysing the impact of economic factors these are
the economic systems, infrastructure facilities are been developed in the healthcare industry, the
skillful and educated human capital, the financial market also play an important role for
influencing the business operations to raise capital and funds in the local market, economic
growth of a country also plays an significant role that further determines effectiveness of the
business performance in the territory (Dyer and et.al., 2017).
Social factors
The social cultures and values followed in a specific society can be determined as social factors.
These shared believes and attitude determines behaviour of people and response to words
specific market in the country. The social factors influencing the business performance includes
the standard of educational level both in the country and the business, attitude of people towards
health and environment, the demographical fact and others.
Technological factors
With the fast growing technology advancement, there are different technological factors that
impacts the business performance such as the rate of technological diffusion, structure, how well
technical developed the country is and others. UK is known as one of the fourth largest technical
advanced country in the world that positively impact the association for bringing productivity
into business functioning (Dzwigol, 2020).
Environmental factors
With the rising environmental concerns, different countries have different set of environment
laws. The government of UK have formulated norms and environmental standards that are to be

mandatorily adhered by businesses in the economy. Different environmental factors that affects
the business performance of AstraZeneca involves the climate change, the treatment of waste in
healthcare sector, the pollution hazards regulation for healthcare industry and others.
Legal factors
Different countries have their own legal norms and framework. A business should rightly
scrutinise all such factors in order to manage and operate the business in the most ethical and
legal manner. Certain legal factors that impacts the performance of AstraZeneca Plc involves
health and safety law, discrimination law, consumer protection, data protection and others
(Gallus and Frey, 2016).
SWOT analysis
SWOT analysis is an internal business environment analysis that involves four dimensions such
as strengths, weaknesses, opportunities and threats in context of the business organisation further
SWOT analysis conducted for AstraZeneca organisation is as follows:
Strengths
High-end customer satisfaction
(AstraZeneca SWOT Analysis. 2021) AstraZeneca promises to deliver quality and reliable
market offerings that helps to earn customer loyalty and satisfaction towards the brand.
Track records of overall New product development and innovation data.
A strong brand portfolio
AstraZeneca has successfully able to create a strong brand portfolio with the way of expansion
over new product categories and reliable quality standards.
Strong distribution network
AstraZeneca has able to create a strong distribution network over years that helps to reach out
and avail products to large number of potential market.
Great performance in new market

AstraZeneca Plc has able to build high end performance in new markets and accomplishing
success that has strongly impacted the business in order to create new revenue systems.
Weaknesses
Weaknesses are such grey areas that needs to be brushed up. The weaknesses in context of
AstraZeneca plc are discussed as:
The business lacks for forecasting the product demand that leads the competitor to acquire the
position in the marketplace. The lack of demand forecasting ability of the Association results to
keep higher rate of inventory both in house and in channels (Jabbar and Hussein, 2017).
The unique selling proposition of the market offering is delivered or not rightly outlined that
leads to poor marketing of the products.
Lacks financial planning where in the current asset ratio and liquid asset ratio of the business
reflects that the association can more effectively utilize the cash into productive ways.
AstraZeneca plc has faced multiple challenges and hindrances for developing other product
ranges with the present culture.
Opportunities
The new technological advancement helps Association in order to bring efficiency in the
business functioning and supports to serve the customers in a better way through value oriented
propositions.
The low shipping prices helps to reduce the overall business cost pertaining to transportation
greatly benefits in order to enhance the profitability ratio.
The online channels have also been a great opportunity in order to reach out number of
customers that helps to reduce cost incurred for reaching out customers and also benefits to
interact with them better (Jenkins and Williamson, 2015).
The new trends in the customer market helps to offer great opportunities and benefits for the
organisation in order to generate new product development and product diversification ideas.
Threats

The growing market of the local distributors that gives a tough competition for AstraZeneca Plc,
this intensive competition in the market please increases number of businesses into
pharmaceutical market that puts much pressure into profitability and sales of the business.
The new innovative technologies adopted by the competitor negatively affects the business
positioning in the marketplace.
Increasing quality standards and the fluctuations in the lawsuits also becomes a threat for the
business.
Determine with evidence the competitive environment of AstraZeneca
Porters five forces model is a strategic analysis that determines decision making by
analysing the competition in the environment. Porters five forces analysis on AstraZeneca plc is
conducted as per:
Threat of new entrants
(Astrazeneca Porter's Five Forces Analysis. 2019) New businesses into the marketplace brings
new innovations and grabs a lot of customer attention that also results on bringing challenges and
pressure on AstraZeneca Plc. In order to combat with the threat of new entrants in the market
AstraZeneca plc formulates its decisions for introducing new products and product
diversification strategies into the market, establishing economies of scale in the production,
investment on research and development is one of the major strategy used by the business in
order to analyse the dynamic market environment.
Bargaining power of suppliers
Most of the company purchase the raw material for producing pharmaceutical products from
number of suppliers. Now the suppliers in the healthcare industry plays and very significant role
that can literally affect the business profitability leading to increased business cost. The powerful
suppliers have the capabilities in the healthcare sector to influence higher prices of the raw
materials. In order to deal with this bargaining power of the suppliers AstraZeneca plc uses
different strategies such as establishing effective supply chain number of suppliers so that the
dependency upon a single supplier can be reduced, formulating strategies in order to innovate

new product designs using number of raw materials so that the higher prices of all raw material
does not affects the overall production activity of the business.
Bargaining power of buyers
Buyers demands a lot where they want to purchase the best products at least possible prices. The
bargaining power of buyers is a great challenge for AstraZeneca plc for covering the profitability
ratio in long run. The customer always looks for getting discounts and offers for the products and
services. In order to combat with the bargaining power of buyers AstraZeneca plc adopts
different strategies such as establishing and growing the number of business consumers in order
to reduce the bargaining power of buyers and enhance the sales and profitability margin of the
business. AstraZeneca plc also innovates its products and brings new products into the market in
order to limit the bargaining power of the buyers.
Threat of substitute products or services
The threat of new products and services in the market where in different brands offers almost
similar features and is able to meet the customer requirements such instances put a lot of pressure
to AstraZeneca plc. In order to deal with the threat of substitute products and services in the
marketplace AstraZeneca plc. adopts different strategies such as switching to service oriented,
analysing the needs and wants of the customers and evaluating the reasons that why actually they
are making purchase and shooting up the switching cost of the customers (Joyce, 2015).
Rivalry among existing competitors
AstraZeneca plc is operated in a very competitive environment wherein it faces extensive
competition that affects the profitability and sales margin of the business. In order to tackle with
the extensive competition in the marketplace AstraZeneca plc adopt strategies such as
establishing a sustainable differentiation, establishing differentiation scale in order to attain
competitive advantage and lastly working with the competitors in order to grow market share.
CONCLUSION
In a nutshell, it can be concluded that business environment plays a crucial role that
influence a business performance and decision-making both in negative and positive manner.
These factors of influence in the business environment can be analysed with the help of different

tools, the theories which includes includes Pestle analysis, SWOT analysis, Porters forces model
both in terms of the business and the industry. These factors both negatively and positively might
impact the business functioning, thus, analysing all such possible factors of influence in the
business environment helps to determine that what all strategies a business can formulate to
different situational context.

REFERENCES
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