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Table of Contents

Executive Summary--------------------------------------------------------------------------------------------2 GlaxoSmithKline Strengths--------------------------------------------------------------------------------2 SWOT Analysis--------------------------------------------------------------------------------------------------2 Strength - Strong Financial Position-----------------------------------------------------------------------2 Strength - Efficient Use of Resources---------------------------------------------------------------------2 Strength - Strong R&D Focus-------------------------------------------------------------------------------3 Strength - Global Presence----------------------------------------------------------------------------------4 Strength - Strong Product Portfolio------------------------------------------------------------------------4 GlaxoSmithKline Weaknesses ------------------------------------------------------------------------- 5 Weakness out dated IT system --------------------------------------------------------------------------5 Weakness - Patent Expiry -----------------------------------------------------------------------------------6 Weakness - Financial Penalties --------------------------------------------------------------------------7 Weakness -Parallel Trading --------------------------------------------------------------------------8 -----------------------------------------------------------------8 -----------------------------------------------9 GlaxoSmithKline Opportunities---------------------------------------------------------------------------8 Opportunity - Strategic Agreements Opportunity - Product Approvals and Launches

Opportunity - BITC Community Mark----------------------------------------------------------------------9 Opportunity - Expansion of Relationship with Aspen--------------------------------------------------9 GlaxoSmithKline - Threats-----------------------------------------------------------------------------------9 Threat - Patent Infringement Claims-----------------------------------------------------------------------9 Threat R&D Unsuccessful New Products----------------------------------------------------------10 Threat Competition-----------------------------------------------------------------------------------------10 Threat - Stringent Regulatory Environment -------------------------------------------------------11 Threat - Increased Pricing Control------------------------------------------------------------------------11 Bibliography ---------------------------------------------------------------------------------------------------12 Plagiarism Report---------------------------------------------------------------------------------------------13

EXECUTIVE SUMMARY This study is based on SWOT analysis of GlaxoSmithKline (GSK). It provides an explanation of various impacts and influences of pharmaceutical industry to explore the strengths, weaknesses, opportunities and threats for GSK in its business environment. GLAXOSMITHKLINE GlaxoSmithKline is the UKs largest and worlds second Pharmaceutical company as Pfizer(US) is currently enjoying the status of world's largest Pharmaceutical. GSK was formed in 2000 as the result of a merger between two gaint companies GlaxoWellcome and SmithKlineBeecham. The GSK is primarily working in 117 countries, their products are currently manufactured in 37 and are sold in over 150 countries.. It develops, manufacture and markets prescription medicines, vaccines, over the counter(OTC) and consumer health products. GlaxoSmithKline has a huge work force currently employing 96,500 people and its headquarter is in Brentford, UK. In year 2010 company turnover was 28.4 billion occupying 5% proportion of world's pharmaceutical industry.

SWOT Analysis GlaxoSmithKline Strengths

Strength - Strong Financial Position GSK is world second largest pharmaceutical company. In 2010 GSK's turn over was $28.8 billion. GSK is the worlds largest investor in R&D and UK's biggest private sector funder of R&D. In 2010 GSK invested 3.96billion in R&D which was 14% of total sales of GSK. ( Strength - Efficient Use of Resources GSK is the winner of 2010 chemical industry manufacturing and resource efficiency award. Global presence of GSK to manage and use its resources efficiently and obviously at low cost. GSK has manufacturing plants across the world where raw materials are available easily. GSK has a network of supply chain to reach every single market in minimum time. GSK also has strategic agreements with Aspen to manufacture and supply the products in Germany and Africa to maximize the market share. 2

Motivated participation and a dedication to improve performance by team playing are at the heart of GSK's success. In the last decade, manufacturing performance has been shifted around through in a systematic way to solve problems, a way to ensure what every team member does is aligned with company's objectives and staff at all levels working together for the improvement. This approach, and a process to cut down all waste, has turned the industry round from threatened loss or closure to one taking on board new research products and competing effectively in the pharmaceutical market. GSK has set its targets to become carbon neutral by 2050.GlaxoSmithKline (GSK) has set out a road map which is aimed at guiding the company towards its goal of a carbon neutral value chain by 2050. This follows the GSKs recognition in its 2010 Corporate Responsibility Report that carbon neutral is an ambitious goal of GSK, and that a well defined way is currently not set to achieve this objective, or its other newly-set 2015 and 2020 goals. But, what GSK knows is that achieving these goals will facilitate the GSK in terms of saving as much as 100 million (US $160 million) a year by 2020 in reduced energy, materials and distribution costs.

Strength - Strong R&D Focus A few companies have proven themselves adept at inventing new markets, quickly entering emerging markets, and dramatically shifting patterns of customer choice in established markets Prahalad and Hamel.(2006) GSK has always been exploring new markets by working on very challenging therapeutic areas. GSK has a wide range of pharmaceutical products that include respiratory, Anti viral, Central Nervous System, Anti bacterial, Oncology, HIV etc. In addition to these prescription products GSK is also paying its attention to OTC (over the counter) products. GSK has a wast consumer healthcare business that brings an added dynamic dimension to the company. GSK provides dental healthcare, nutritional supplements and drinks to million of people across the world. GSK has four dedicated consumer healthcare R&D centres and consumer healthcare regulatory affairs. Sensodyne, Aqua Fresh, Lucozude and Horlicks are some market hot leading brands of GSK. Strength - Global Presence 3

GSK is a global organization with its offices in over 100 countries. GSK has major R&D centrers in UK, USA, Belgium and China. GSK has manufacturing and supply network across the world and its products are sold in more than 150 countries. GSK manufacture 4 billion packs per year in 28000 different presentations like tablets, capsules, syrup, injection, inhalers etc.

Strength - Strong Product Portfolio GlaxoSmithKline is engaged not only in the production of medicines to treat the following major diseases including cancer, HIV, asthma, skin infections, antibiotics, virus control, mental health, and digestive conditions but GSK also produce products of consumer health. GSK is also a leader in the manufacture of vaccines and is also engaged in the development of new OTC products . The company sells its products under three sections including consumer healthcare, prescription medicines, and vaccines. The table below shows the prescription products with turn over.

The table below shows the consumer healthcare and OTC products share of GSK in terms of turnover.

GlaxoSmithKline - Weaknesses
Weakness Out Dated IT System GSK's outdated IT system would hold back the company for five yaers (Analysts Morgan Stanley). Since the start of this year GSK is down by more than 7% to set aside $2.2bn to cover US legal costs. The underinvestment of GSK is a major obstacle to operating performance, cash conversion and bolt-on acquisitions, (Analyst Andrew Baum ) Weakness - Patent Expiry The life of a patent in most countries is 20 years from the ling date. However the long development time for pharmaceutical products may result in a substantial amount of this patent life being used up before launch. GSK is also facing the patent expiry for a number of bulk-buster products . The following table shows some of the patent expiry dates of GSK.

Weakness - Financial Penalties Over the past few years the settlements with various pharmaceutical companies include unlawful promotion of medicines, over-charging for government health programmes, kickbacks, poor manufacturing practices, concealed study findings, environmental violations, monopoly practices and illegal distribution.

The companys latest 2.2bn charge in large part represents planned settlement of a probe led by Colorado over unlawful or aggressive marketing of its products, but also some product poor manufacturing. GSK refused to provide the details, partly to prevent the lawyers from calculating the average payment per patient in medicine litigation claims that could inflate demands from future claimants. Weakness -Parallel Trading In the UK wholesalers are exploiting the EU free trade and importing products from countries like Greek, Spain etc where prices are low. Parallel importing can be seen as a potential barrier to access of new medicines, and a potential barrier to market development (Data monitor2006) Value of these imports has crossed the value of 300m according to BAEPD. GSK and other companies are selling controlled and monitored stocks which can only meet the need of national markets. The amount of drugs GSK supplies to European wholesalers to the roughly the same levels as in 2001. (

GlaxoSmithKline Opportunities
Opportunity - Strategic Agreements In addition to its own R&D GSK has strategic agreements with other pharmaceutical companies and organisations Valeant Pharmaceutical, NHS, academia to boost its research.GlaxoSmithKline announced a new long-term share buy-back programme with 2 7

billion expected to be returned to shareholders in last quarter of 2011. All these strategies will help GSK to lead in the market and face the legacy problems. Opportunity - Product Approvals and Launches GSK has got approval of launch of six products in USA and EU market. Annual report of GSK show a peer-leading pipeline of 30 late stage assets. Ten new compounds and vaccines of GSK are in phase III clinical trials since the start of 2010. Having a number of new patents will generate cash for GSK to further invest in R&D and the new generic brand of GSK will give a tight competition to other pharmaceutical organizations. Opportunity - BITC Community Mark GSK has become one of the first companies to be given the Community Mark by Business In The Community (BITC).GSK has been awarded this Community Mark because of its international initiatives, as well as its work at a local and national level within the UK. Through its Global Community Partnerships programs, GSK works with collaborating organisations to build strategic partnerships that generate mutual benefit for GSK, its partners and the beneficiaries of the programmes. Opportunity - Expansion of Relationship with Aspen GSK also has extended strategic relationship with Aspen having 16% of Aspen's shares in exchange for transfer of products and manufacturing facility in Germany and Africa. This strategy will help GSK to grow in the emerging market. (GSK website)

GlaxoSmithKline - Threats
Threat - Patent Infringement Claims GSK is having tough competition from manufacturers of other pharmaceutical companies who market generic products against all of GSK's major products. Generic drug manufacturers have also shown a eagerness to launch generic brands of products prior to the expiry of patent. Resolving this issue is challenging and may need a dedicated team to 8

ensure the validity or enforceability of a patent or keep an eye on the generic products so that these do not infringe the patents. Other countries of the world where GSK operates, patent protection may be signicantly weaker as compared to the USA or the European Union. Some third world developing countries have reduced or intentionally minimized patent protection for pharmaceutical products generally or in specific therapeutic indications to facilitate early competition within their markets by generic brand manufacturers. (GSK Annual Report 2010) Threat R&D Unsuccessful New Products GSK invest about 14% of its sales in developing or researching new products.

Development of new products by R&D requires money, time and human resources, and the out put is always uncertain. One of the most important threat that the GlaxoSmithKline is facing is the risk of the R&D. Not all of the innovations, development processes or improvement planning is sure to be one hundred percent successful. A new molecule can fail at any stage of the research or testing stage process, and drug regulatory authorities may not give approval to one or more late stage product candidates for any specific reason. New product initially may seem promising in development but, after huge investment of company's money, time and employees efforts, may fail to achieve desired results altogether or have only limited commercial success in terms of efcacy against disease or safety issues or drug reactions, an inability to get necessary approval by regulatory authorities, difculty manufacturing or excessive manufacturing costs etc. Threat Competition Pharmaceutical industry is considered as one of the highly competitive industry in the world. The number of the companies that are emerging in the said industry is the most obvious evidence that shows the growth and improvement as well as the development of the said industry. A major factor that can affect the overall performance of pharmaceutical businesses is the presence of the generic drugs. These are the drugs or medicines that are offering the same effective power of a particular substance or chemical but in a low price. GSK is also facing competition not only by the generic products but the competition from newer, better drugs is equally disheartening.

Threat - Stringent Regulatory Environment 9

Health authorities all over the world such as in Europe the European Medicines Agency FDA of United States, and the Japan Pharmaceuticals and Medicines Device Agency have increased their concern on safety issues and product differentiation while calculating the benet and or risk balance of drugs, which has made it more difcult for pharmaceutical products to gain regulatory approval. Threat - Increased Pricing Control Pharmaceutical organizations are always under the price controls or pressures and other restrictions in many countries, including US, Italy, France, Spain, Germany and Japan. Some governments involve directly in controlling the prices of pharmaceutical products. In addition, in some countries major pharmaceutical product purchasers ( either governmental agencies or private health care providers) have the economic power and choice of generic brands which they use to put substantial pressure on prices. It is not possible to accurately foresee whether existing controls, regulatory authority restrictions or buyer's pressures will increase or whether some new controls, economic pressures or restrictions will be introduced in any geographical area where GSK is operating. Pricing strategy is important to the pharmaceutical companies because most of the consumers, especially those who belong to the lower class always settle for the low price of medicine or drug.


Bibliography Johnson G, Scholes K and Whittington R(2006).Exploring Corporate Strategy: Text and Cases, 7th edn, Harlow Essex, FT Jack A.(2008). Gloomy prospects for drugs market. Financial Times, March 25 2008, London; p. 18 Hill C W. L and Jones G R.(2004). Strategic Management Theory: An Integrated Approach, 6th edn, Boston, Houghton Mifflin Corporate Reporting, GSK annual report 2010 Business Review Improving Business Performance Conference. 2nd March 2011 Thorpe Park Hotel Leeds. 11th April 2011 GSK Carbon neutral Financial Times UK Data monitor (2006), Parallel importing and pricing issues, Business Insights Limited GSK on Collision course with the European commission, viewed 30 March 2008 <> GSK Awaard Patents and the pharmaceutical. Industry <> 11

The Pharmaceutical sector in the UK <>

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Overall content match: 4% Direct quotes: 0% of which 0% found online. Actual content match minus quotes: 4%
. Strength - Strong Product Portfolio GlaxoSmithKline is engaged not only Students Paper: not only in the production of medicines to treat the following major diseases including cancer, HIV is engaged in the production of medicines to treat the following major diseases including diabetes, asthma cancer, HIV, asthma, skin infections, antibiotics, virus control, mental health, and digestive conditions but GSK also produce products of consumer health. GSK Students Paper: health. GSK is also a leader in the manufacture of vaccines and is also engaged in the development of new OTC products The company is also a leader in the manufacture of vaccines and is also engaged in the development of new treatments to OTC 12

Students Paper: new OTC products . The company sells its products under three sections including consumer healthcare, prescription medicines, and vaccines. The table below United States. The company sells its products under three sections including consumer healthcare, prescription medicines, and vaccines. GlaxoSmithKline

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