Strategic Management Report: GSK's Competitive Landscape Analysis

This report offers a strategic management analysis of GlaxoSmithKline (GSK), a major UK pharmaceutical company. The report is divided into two primary sections. The first section applies Porter's Five Forces to evaluate GSK's competitive environment, considering factors such as the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and industry rivalry. The analysis also considers macro factors like political, economic, legal, social, technological, and environmental influences on GSK's operations. The second section assesses GSK's internal resources and competencies, highlighting its work culture, product quality, and diversified pharmaceutical offerings. The report examines how these factors contribute to GSK's strategic positioning and overall performance within the pharmaceutical industry.

Strategic Management
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Table of Contents
EXECUTIVE SUMMARY..................................................................................................................3
Question 1.............................................................................................................................................3
Question two.........................................................................................................................................6
CONCLUSION....................................................................................................................................9
REFERENCES...................................................................................................................................10
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EXECUTIVE SUMMARY
The present study has been based on strategic management where GlaxoSmithKline (GSK)
has taken into the consideration. It has the sixth largest pharmaceutical company of the UK. The
entire study has divided into two sections. The first part has put the lights over high level of
profitability of the organization. To analyze it, Porter’s Five Force analysis method has adopted.
From this, it has determined that there have different macro factors such as bargaining power of
customers and supplies, entrance of new competitors, political, legal etc. These all have helped
GSK to carry out the pharmaceutical business of organization in the UK in ethical manner. The
second section has put the focus over the assessment of the resources and competencies of GSK
firm. From the assessment, it has defined that work culture, quality of work; diversified
pharmaceutical products etc are major competencies of cited firm
QUESTION 1
GSK company is a world sixth largest pharmaceutical company to maintain its position they
make their marketing strategy and business policy to take into consideration 1porter five forces that
affect its marketing policy and also consider macro factors that influence pharmaceutical industry in
this report we study how these five forces and macro impact the GSK company are discussed below
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1. Threats of new entrants- GSK company is a pharmaceutical company which involve high
entry barrier for the new firm the factor that affect another new firms to enter into a
pharmaceutical industry are patents, high cost advantage enjoy by economies of scale,
government rules and regulations, research and development, huge investment involved in
capital, patents, brand image leads to low threats on new entrants. The cost involved in enter
into a pharmaceutical company is high, it also involve high research and development. GSK
Company eliminate their competitors with their brand image, provide safety to their regular
consumer, take care of their health leads to increase in customer loyalty and confidence in
their patients. (Tony Grundy .2016 )
2. Bargaining power of buyers- The bargaining power of buyer is high in GSK company the
NHS is major buyer of this company the quality of medicine and provide wide ranges of
medicine and they take care of people healthcare, give lifelong survive promise to their
patients . GSK spend much of its time on research and development which result into high
quality of product they produce the major consumer of this company are doctors , patients,
hospitals and now it becomes a top pharmaceutical company globally .
3. Bargaining power of suppliers – The main suppliers of this company is raw material, labour,
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Experts who investigate on distribution, marketing, production and clinical officers. The
GSK Company maintain their relationship by meets suppliers needs on time, they offer
excellent offer to their employees and also these company maintain a clean record and make
contractual with their suppliers for this reason the bargaining power of suppliers is low.
4. Threats of substitute of products or services- GSK Company have high threat of
substitute. Generic brand medication is a main substitute for the pharmaceutical company.
Substitute of GSK product is complementary alternative medicine (CAM) they deliver same
product to their patients exceptional is that they use different brand name and various prices
they offer. The new form of CAM Threat the GSK Company’s product but they found safer
and cheaper in comparison to conventional medicine so the GSK Company faces major
threat from its substitute. (c.smith,1991 )
5. Rivalry among existing firms – Pharmaceutical industry have low competitors due to strict
government rules and regulation due to this GSK company grow fast and expand its
businesses result into company generating large revenue and success in the pharmaceutical
industry reduce competition . GSK Company have a great planning and foresight to it
position itself for long period of time they survive in this industry, but this company require
extensive research and development techniques to reduce number of competitors.
Macro factors that affect the GSK Company are discussed below -
Political factor- Every country's government have their own rules, regulation there is now growing
in political focus and pressure on healthcare across world so the GSK company make their business
strategy, market strategies in accordance with the government rules and regulation to compete their
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competitors in the pharmaceutical industry they also make possible changes in their strategy to
make trade their business globally. Recently the government of china and India introduce new rules
and regulation for the pharmaceutical industry so it affect the GSK Company also. The changes in
taxation policy , restriction on firm's product are highly much affect the firms , if government
impose high tax on trade internationally, restrict quantity on supply of medicine which is directly
affect the GSK company and it also impact on their business like Cut back more pressure on pricing
, increase pressure on pricing , reference pricing , exposing pricing across borders.
Economic factor- Economic factor include inflation rate , interest rate , exchange rate fluctuation,
global economic crises , reduction in individual income crises, increasing number of buying groups
putting pressure on pricing, Reduction in pharmacy growth affect the business marketing
strategies , also affect the current market position of GSK company , Recently increasing in
growth of economy rate of India and china , Moreover the economic uncertainty have impact
negatively on business marketing strategy . With this GSK company make their strategy in
accordance with government rules so they not much affect the business current market position due
to changes in the economic conditions, if government increase inflation rate the rate of the
pharmaceutical company medicine also increase leads to decrease in purchasing power of consumer
which are highly affect the GSK company sales and turnover , Increase pressure from shareholders,
need to introduce value adding process, Again an increased pressure on pricing ,However market is
likely to grow due population. (Larsen 2015)
Legal factor- These are the important factor which involve rules and regulation that directly or
indirectly affect the GSK company operations where the market exist as well as international trade
rules and regulation are also much affect Pharmaceutical company they need to focus on education ,
qualities becomes key, unable to rationalise. (Chris fill 2014.)
Social factor – Social factor are Patient awareness , changing expectations, patient activism also
increase so adopt social networking technologies, Increasing age of population and growth obesity
these factors affect pharmaceutical company . With the increase in population it offers a wide
ranges of opportunities and threats to a pharmaceutical industry it also increase in their health
problems , diseases for this it gives opportunity and responsibility to GSK company towards their
consumers to make them healthier , lifelong survival and another opportunities is that they produce
their medicine according to the consumer behaviour and age group , for children they produce low
MG level tables , syrups and for old age person they produce high MG tables and threat to
pharmaceutical company is that if the medicine harm and high dose in tablets which give negative
impact towards company they have more pressure on customer service, increased needs for
education and more price transparency , market like to grow with increasing health concerns .(Frank
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martin 2009 )
Technological factor – Technological factors like new information and communication
technologies like social media, Customised treatments, Direct to patient advertising are the factors
that affect pharmaceutical industry. So, With the Increase in technology it’s give an opportunity to
adopt latest technology to develop their business locally as well as globally. They growth their
business through making online strategy in their marketing on sites like Facebook and twitter, adopt
social media to promote their business for health care on television, internet and regularly attend
customer through online chat with expertise and take feedback from their clients, they continue
aware their clients through emails about healthcare and continue reply on time their feedback on
emails and chats, new digital opportunities' e-models'.( c.smith . 1991)
Environment factor- Environment factor affect pharmaceutical industry also the main issue growing
environment agenda and community awareness and it also impact on GSK company business
identify eco -opportunities to market.
QUESTION TWO
The pharmaceutical company like GlaxoSmithline is the sixth largest company in
pharmaceutical industry. The headquartered of the firm in Brentford, UK under which company
generates the revenue $23.923 billion in 2015. In this way, total number of human resource working
in the firm that is 96575 (Silva, Kerpel-Fronius and Koski, 2013). Organization provides various
products and services to their customers which in includes the nutritional products, oral health care,
medicines etc. Furthermore, company uses the best quality material and sale at the reasonable prices
which helps consumer to attract towards the products and services. Accordingly, it helps corporation
to increases the market share in pharmaceutical industry and maintains the productivity.
Furthermore, management of the organization follows the horizontal structure under which manager
takes the decision with the help of all employees and debarments like finance, marketing, etc. It
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helps employees to increases the motivation level towards the work and gives the suggestion,
innovative ideas (Sonstein, Jones and Daemen, 2014). It also assists manager to takes the effective
decision and meet the deadlines which is provides by the firm and clients as well. Motivated
employees gives the best effort of the work and work in appropriate manner. It affects performance
of the organization because clients are satisfied his services is provided by the employees. As per
this, company increases the market share and maximizing the profits as well. Apart from this,
manager of the GlaxoSmithline knows the ability and capability of the workers about handling the
risk and projects under which provides the workers per the employee’s interest. It helps employees
generates the interest towards the work and complete the task effectively and efficiently as well.
Interested employees are able to meet the deadline of the clients and attain the goals and objectives.
Manager maintains the work quality of the employees and work culture at the work place (Agha,
Alrubaiee and Jamhour,2012).
Figure 1Company performance
(Source: GlaxoSmithKline, 2016)
Organization follows the person culture which helps to employees feels important in the
firm wherein manager takes the suggestion of the workers. In this way, company provides the
positive environment at the work place which aids human resource to focuses on their work. They
complete the task on time to time which creates the satisfaction of the company. GlaxoSmithline
render the various types of products and services related to the medicine to their customers. This
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medicine helps consumer to solve the issues of the health and reducing the diseases which prevent
in the health. In this way, corporation maintains the quality culture of the firm wherein manager
uses the rewards system (Holahan, Sullivan and Markham, 2014). Company render the rewards to
their employees as per their performance which includes promotional opportunity, incentives and
bonus etc. It helps employees to create the motivation level towards the work and they are able to
handling the risk at the work place. It assists manager to manage their day to day work operation
and matins the work force and their relation as well. Apart from this, company allocate the resource
in effective manner which involve the government in decision making process of the organization.
Moreover, company focuses on the availability of the resource at the work place accordingly they
produces the products and services in the market. Manager of the company identify the needs and
demand of the consumer related to the health care accordingly they produces the medicines. It helps
consumer to resolve the issues which is related to the health issue of the consumers. As per this,
company increase the market share in same industry and employees attain the goals and objectives
of the firm as well (Silva, Kerpel-Fronius and Koski, 2013).
On the other hand, GlaxoSmithline provides the training related to making the medicines to
their workers. It helps employees get the chance for increasing the knowledge in pharmaceutical
sector and improves the performance. It affects performance of the workers and improves the
quality through the training. Organization also gives the training related to the make the order to
their employees under which customer wants to the medicines accordingly provided to them.
Employees have proper knowledge and information related to the products and services. Moreover,
firm faces many issues at the work place because many competitors deal the products in same
industry. However, organization maintains the image of the brand in UK which helps to reduce the
problems and challenges as well. On the other hand, the core competence of the firm under which
ability to manage the resources at the work place and employees attain the goals and objectives of
the business unit. Organization maintains the brand image in the market so that they provides the
product at the reasonable prices. In this way, manager of the organization to identify the current
position and financial in the industry accordingly they analyses of the company position (Sonstein,
Jones and Daemen, 2014). Furthermore, firm spend the money in research and development of the
firm such as $5.3 billion so that company have strong financial position in the UK market.
Organization adopts the strong promotional and marketing techniques which helps to consumer
attract towards the products and services. In this context, company invest the money in sales and
marketing $9.9 billion so that increases the sales turnover ratio. Moreover, organization generates
the profit like $8.8 billion in the pharmaceutical industry. It shows that firm have enough financial
position in the market and develops the various services and provides to the customers. In addition
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to this, the pharmaceutical industry day by day increases the market share in UK under which
GlaxoSmithline leads to the profit margin increases day by day as well. It helps company to
maintain the brand image in the UK and increases the overall productivity of the firm (Holahan,
Sullivan and Markham, 2014).
CONCLUSION
From the above study, it can be concluded that strategic management has the important part
of every kind of organization. It has assisted the companies to attain the business objectives in right
manner. There have various macro factors which have helped GlaxoSmithKline to conduct an
ethical business in the UK a) pharmaceutical industry. Along with this, effective work culture,
positive environment, quality of services etc has the main core competencies of the cited firm.
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REFERENCES
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Online:
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