Applied Corporate Strategy: Comprehensive Report on GSK's Strategy

This report provides a comprehensive strategic analysis of GlaxoSmithKline (GSK). It begins with an examination of the external environment using PESTEL factors, including political, economic, socio-cultural, technological, environmental, and legal influences, highlighting key opportunities and threats. The report then applies Porter's Five Forces framework to analyze the pharmaceutical industry's competitive landscape, assessing the bargaining power of suppliers, threat of new entrants, competitive rivalry, and the attractiveness of the industry. Following the external analysis, the report evaluates GSK's resources and key competencies to identify its core competencies. Finally, the report assesses a chosen GSK strategy, the joint venture with Pfizer, using the SAFe (Strategic, Appropriate, Feasible, and Effective) criteria to evaluate its success. The analysis incorporates relevant data and research to support the arguments and conclusions, offering a detailed evaluation of GSK's strategic positioning and performance within the pharmaceutical industry.

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Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Question1.........................................................................................................................................2
Question 2........................................................................................................................................9
Question 3......................................................................................................................................12
References......................................................................................................................................15

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Question1
The six environmental factors are as follows:
Political factors:
 The GSK which is based on the British is able to draw the contingency plans in order to
protect its supply chain after the UK tends to leave the EU. However, in the present
scenario, the strong bonding or connection with the manufacturers of the EU will tend to
mean the enhanced level of the expense on the occurrence of the Brexit (Abir and
Rahman 2014). However, in order to avoid this, the GSK is adjusting politically in order
to ensure that the Government of the UK will guarantee the occurrence of about minimal
disruption.
 It is to be noted that gsk was suffering from accusations from the head member of the
communist part of the china that the executives of the China have ordered its assistants to
commit bribery in order to enhance its sales (Ahn et al., 2013). This tends to come from
the previous record in which the GSK have made agreement to pay of about 20 dollars to
settle the allegations of the bribery to that of the officials of the china
 The enhanced level of the involvement of the government in the UK over the price of the
medicine have forced the companies of the medicine to offer huge discounts on their
medicines (Sharifat 2016). However, under the governance of the Trump, further amount
of cuts were being expected which have forced the GSK to be more modest with the price
of their medicines.
Economic factors:
 Though the uncertainties which tends to surround the rexit are causing huge problems for
the GSK, in the market of the UK, the lessened pounds have enhanced the sales of the

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group surging to about 23 percent in 2017. Consequently, the profits are being reinvested
by the GSK into new different products that is being expected to bring sales of about
£6bn per year by the year 2018.
 Through the general profits are high, the brexit decision has developed in the rates of the
exchange. In order to meet with the new factors, the GSK are changing on how they can
function within that of the UK. The expansion plans for £350 m factory in that of the
cumbria have been cancelled with the loss of about 320 jobs. However, in order to save
the cost, the gsk is selling their brand of the Horlicks and even closing the slough
manufacturing plan (Arico-Muendel, 2016).
 Though many markets in the west are not financially stable, the profits in the Indian
market tends to grow and even account for about 30 percent of the GSK. The low rate of
exchange between the India and the UK has lead GSK’s looking to move the investments
into India with that of the planned factory for the year 2018.
Socio- cultural factors:
 In the year 2016, the company GSK has announced that the company will not file the
rights of the drugs in the regions of the world which are marked or characterized by the
lowest standard of the income. This tends to indicate the fact that the affordable form of
the health care will be very much available r reachable to everybody (Sudarshan,
Narayana and Jayakrishnappa 2019). On the other hand, it is to be noted that the
company GSK is going to capitalize 20 percent of the profits that it is going to make in
the countries which are least developed into that of the training health workers and for
the purpose of building medical infrastructure (Arthur, Wolff and Carrier, D.J., 2004)

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 With the gaining of the population globally, announcement has been made by the GSK
company in the year 2017 to move towards the new standard f the treatment of the HIV.
Various studies that have been conducted tends to indicate the fact that the various pill
treatment that has been followed traditionally can tend to cause various forms of
problems mainly because the people are growing old (Cross, 2000).. The importance of
the social need for the new types of treatment is being understood by the GSK company.
As a result of this, the company has invested highly in order to meet the demand of the
new market in the business.
 Since the year 2015, the company GSK have worked hard in order to diminish the global
epidemic which was being caused by the Ebola virus. In partnership with the world
health organization, funds are being provided by the world health organization in order to
improve the vaccines related to that of the Ebola Virus. The positive form of the
publicity have helped the company GSK to maintain an image of positivity of the social
responsibility by that of the customers
Technological factors
 The company GSK was ranked as one of the lowest in the basis of their investment into
the R&D traditionally in comparison to its competitors in the year 2016. However, it is
to be noted that in order to meet the demands of the investors, the GSK have put its invest
for the purpose of restructurizaton of the R & D sector in the year 2017 (Doble et al,
2017). However, various researches and studies that have been done tends to indicate
that the GSK have exposed or revealed their newest investment in the sector of the
artificial form of the intelligence. As a portion of the deal of the $43m, GSK are utilizing

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the AL in order to assume how the drugs will be behaving in order to save the time and
money on traditional test which are absolutely unnecessary (Fox 2013).
 It is to be noted that from the year 2016, the company GSK have invested highly in the
solutions of the automations in order to increase the sales of the production. Through the
investments of the software, the GSK have deducted or limited the request times of the
manufacturing from the three weeks to that of the four days. This has finally permitted
the GSK to resupply the companies in a quicker way. This has also provided the company
GSK with economical saving in that of the production in times in order to lessen the cost
of the down time.
 The company GSK has also partnered with the companies of the data handling in order to
invest in the super computers which the company GSK hopes will help in the reduction
of the time that it takes in order to identify a particular form of a disease (Goel,
Kulshreshtha. and Dhingra 2013) The advantage is that it will help in the quicker
enhancement on the treatments of the medicine and even on the competitive advantage on
being the very first in that of the market along with its treatments.
Environmental factors:
 Various forms of the studies that have been conducted tends to identify the fact that from
the year 2015, the company GSK have tend to switch the production to that of the
continuous from of production (Imtiaz 2017). This have helped in the production of the
medicines in a lesser expensive manner however, it is to be noted it has also lead to the
quicker and lesser impact on that of the environment.
Legal factors:

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 The company tends to work with an industry which is highly regulated and is enforced. It
is to be noted that within the countries in which the company GSK tends to function must
abide by the huge range of laws, regulations and the compliances before the selling of
their products (Jofre 2014) However, in order to meet with such standards, the company
GSK spends of about £ 100 m in the legal charges in order to ensure that the company
functions within the perimeters of the guideline.
 The researches that have been done tends to indicate that after the scandal of the Chinese
corruption, the GSK have reinvested their interest into the $10bn market. However, it is
to be noted that in order to meet with the laws of the Chinese, the company has led to the
high investment into the training of the anti bribe for the purpose of the representatives of
their drugs on the other hand, the hiring of the new compliance professionals, the
investment as well as the training and the exclusion of the incentives have all together
tried to validate the commitment of the GSK in order to repair their status within the
region of the China.
The opportunities and the threats thus identified are as follows:
Opportunities
 One of the opportunity for the GSK is that of the strategic expansion through the
Acquisition and that of the collaboration. The company GSK has been able to expand its
portfolio not in an organic manner in the present past. The example that can be taken into
account is that of the collaboration between the Vii, the specialist company of the GSK’S
HIV with the Pfizer and Shionogi in that of the 2016 (KASILINGAM). Another example
is that of the acquisition of the GlycoVaxyn in the Switzerland in the year 2015. Such

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types of the collaboration and the acquisition will be helping the company GSK to
enhance I portfolio and even enhance its share in that of the market.
 Another opportunity for the company is that the launch of the products tends to
strengthen the business of the company. In the present scenario, the company has
launched a various number of products in the se tor of the metabolic and respiratory
business (Kmietowicz, 2014). The example of this is the launching of the Nucala for the
treatment of the refractory eosinophilic asthma among the adults. The launch of such
products tends to develop the portfolio of the company and even help the company to
strengthen its business.
 The enhanced level of demand for the health care products of great quality in India as
well as in other nations which are emerging tends to give the opportunity for
pharmaceutical companies like that of the GSK to enhance is bottom line as well as its
top line.
Threats
 The pricing controls of the drugs – the expense of the drugs are being controlled by the
various number of laws in various countries (Kumar and Kulshreshtha 2013). The
example of it is that the policy of the new pricing in India has been proposed in India
which is going to decrease the price of the drugs (Wambua and Munyoki 2017).
 Huge competition in the industry- the product of the company in connection to the care of
the consumer as well as the pharmaceuticals which are very much subjected to the high
competition in the industry which is not only going to limit the share of the market but
also provide rise to the price of the wars.

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 Generic composition- the introduction to the products of the generic has affected the
sales of the companies with the increase on the generic medicine sales as the enhanced
level of its availability.
The industry analysis of the GSK are as follows:
Porter’s five forces analysis is a strategic management tool that is being utilized to analyze the
industry. The five forces of porter are as follows:
 Threat of the new entrants- the various new innovations that are being implmeneted
by the other companies tends to put pressure on the GSK. However, it is being handles by
the company through the innovation of new products and constant market research.
 Bargaining power of the suppliers- the powerful suppliers tends to utilize their power
of negotiation in order to extract higher range or prices from the firms in the drug
manufacturers (Lucas et al 2001). The general impact is that it tends to lower the overall
profit. This is however handled by the company by building supply chain with the
multiple suppliers. The company even tends to experiment by producing with the other
product’s so that if prices tends to go higher, they can change it to the other product as
well (Parry 2014).
 Bargaining power of the buyers- the buyers tends to buy products by offering a very
less amount of price. This tends to put pressure on the company. The smaller and the
powerful base leads to the higher range of bargaining power of the customers. This is
however being handles by the company by building a huge base with the customers and
through the quick innovation of the products.
 Threat from the substitute products- similar kind of products in the market tends to
effect the profit. The threat of the substitute product or the service is high if it tends to

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offer a value proposition that is particularly different from that of the present offerings.
This is being handled by the company by being oriented in service rather than being
product oriented (Rahman 2012).
 Rivalry among the players which already exist- the rivalry among the other
companies will lead to the driving down of the prices and lead to lessen the overall
profitability of the industry. However, this is being handled by the company by building a
sustainable differentiation and by building a scale so that it can give better competition.
Question 2
2. The competitive advantage of the GSK company are as follows:
Strengths
 The company has about a strong R&d boosts portfolio expansion. The company GSK had
made efforts which are very much focused enough towards the development of a research
which is very much strong. They are also putting efforts for the development wing as
well. various researches that have been conducted tends to claim that the company has
made development in the respiratory, HIV and cardiovascular medicines. On the other
hand, the company GSK’s commitment to the technology driven R&D invention has
helped the company to reinforce its position that is already there in the market.
 One of the strongest point of the company GSK is that of its strong sales and network of
distribution. It is to be noted that the company has developed a very strong sense of sales
and distribution network across India as well as across the entire globe. It is to be noted
that a strong sense of distribution network helps to ensure the availability of the products

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everywhere. It also tends to develop its capability to provide its newer products to the
customers as quickly as possible.
 One of the strongest factor of the company is that the company has a very strong presence
in the market across the globe. It is to be noted that the products of the GSK company is
available in 100 countries across the globe. The availability of its products in so many
countries has helped t lessen the risk of being highly dependent on few of the markets
which are available.
 Novartis claimed that a health care and the joint venture of the vaccines of the consumers
in the year 2015. This will be beneficial for both the pharmaceutical giants as it will help
them to develop penetration as well as introduce new form of products in the market.
This is eventually lead to the development of the share in that of the market.
 It has the capability to limit the expense
 It tends to have good marketing infrastructure.
Weakness
 the false allegations of the health care tends to affect the image of the brand - in
various countries, allegations have been put against the GSK to have illegal
promoted prescription medicines., charges of wrong pricing. It is also charged against
the company that it failed to report a safe information (Malito, Carfi and Bottomley,
2015). The example of this is the charge of promotion of the antidepressants in the
US which was not being accepted by the FDA. Such incidents tends to affect the
image of the brand.
 The various number of the blockbuster products are expose to the generic competition
and reaching its development: various number of the products of the company as

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well as the vaccines are revealed to the competition from that of the generic
medicines. On the other hand some of the blockbuster products are reaching its
maturity. This tends to affect the sales of the company.
 The company tends to have no clear and goal.
 It tends to lack training and skills of management
 The links between the health care, public health and the social care tends to be very
poor.
 It tends to have a revenue base which is unsustainable in nature.
The core competencies of the organization will be discussed using the vrio framework
The term vrio tends to stand for value, rarity, imitability and organization.
Value- it is the world’s sixth largest company according to the report that was being submitted
in the year 2019 by Forbes. It is considered to be the second largest company of the
pharmaceuticals. The products of the company tends to neutralize the external threats (Mistry).
Rarity- the company is always innovative with its products in order to compete with its
competitors. However, there is still very scarcity.
Imitability- since the company has many competitors, the other competitors tries to imititae the
products of the company.
Organization - it is a multinational pharmaceutical company. Its headquarter is in Brentford,
London. The company has its listing on the London stock exchange and is considered to be the
constituent of the FTSE 100 Index. It has a secondary form of listing in the New York stock
exchange as well.

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Question 3
3.The strategy that is being implemented by the GSK company is that they have transformed the
trust into strategy by giving importance to the fact running the business in the correct way as
well as putting the interest of the patients and customers first is being implemented as the
strategy by the company (Modak, 2018). The analysis of the strategy through the tows matrix
are as follows:
Internal factors
External factors
Strength Weakness
Opportunities  It has the capability
to limit the expense /
strategic expansion
through the
Acquisition and that
of the collaboration.
 The company
tends to have
no clear and
goal/ the
launch of the
products
Threats  It tends to have good
marketing
infrastructure/ The
 It tends to
lack training
and skills of

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pricing controls of
the drugs –
management/
Huge
competition in
the industry
Diagram : Tows matrix chart
The stakeholders who are included in this strategy are patients, governments, employees,
organization members , providers (Mondol, 2019).
Diagram : Stakeholder’s map
Gsk
Patients
Governments Employees
Organization members Providers

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The strategy can be well applied. It will be requiring the skills of analyzing the market as the
after analyzing the demands of the market, the right products might be initiated.

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Sung, J.J., 2013. The neuroprotective effect of the GSK-3β inhibitor and influence on the
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