GlaxoSmithKline Company’s Strategic Analysis

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Step I

The purpose of this SWOT analysis is to provide prospective investors with an accurate overview of the current status of GSK through an evaluation of the key internal and external factors affecting the company. This paper aims to present the most crucial information about GSK in a condensed format, as well as provide further explanation and details regarding all the included points. The information gathered for this case study will be used to make projections regarding the future of the company. It will also be utilized to suggest changes that might increase GSK’s viability and competitiveness in the long term.

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Step II

Strengths

  • The world’s second-largest pharmaceutical company after Pfizer
  • Vast research and development capabilities
  • Established global distribution and sales network in over 100 countries
  • An array of popular brands
  • Joint venture with Pfizer

Weaknesses

  • Less than ideal reputation due to recent issues

Opportunities

  • Expansion into skincare and wellness markets
  • Further growth in India
  • High demand for COVID-19 vaccines
  • Creating more effective methods of drug development

Threats

  • Competition from generic medicine produces due to expiring patents
  • Drug pricing controls
  • Price wars in oversaturated markets

Step III

The variables in the strengths category are the main factors responsible for the successful operation of GSK. The company’s large size is its most prominent advantage over the competition. Being the world’s second-largest pharmaceutical company, GSK is able to invest heavily in research and development, which allows it to design and produce new drugs faster and more effectively than smaller companies. Furthermore, GSK’s strong distribution system lowers logistics costs, resulting in higher margins or a possibility of more competitive prices. Another major strength is GSK’s impressive portfolio of popular consumer medicine brands, which directly affects its sales and profits.

Finally, the company has joined efforts with Pfizer, creating a “world-leading Consumer Healthcare Joint Venture” (About Us, 2020). This temporary merger will amplify GSK’s existing strengths and should be highly beneficial for the company.

The one weakness mentioned in the SWOT analysis is caused by several PR and ethical issues that GSK has had in the recent past. The company was involved in controversies connected with corruption, tax evasion, and market manipulation in different parts of the world. It was also accused of unlawful advertising practices, such as promoting prescription drugs that have not been approved by a country’s authorities (Bhasin, 2019). Furthermore, GSK allegedly used false pricing and failed to report safety data in their promotional material (Bhasin, 2019). These, as well as other less critical image issues, have a detrimental effect on the perceived trustworthiness of GSK.

GSK has several potentially lucrative opportunities that can yield higher profits or allow it to maintain a competitive position in the future. One of them is developing skincare and wellness products, in addition to traditional medicine. This would allow the company to take advantage of the less competitive emerging market, where it could set higher prices, as there might not be many alternative offerings. Another opportunity for expansion with a similar proposition is in India, which already accounts for a large portion of GSK’s operating revenue, and has ample room for growth.

The COVID-19 pandemic presents a prominent opportunity for a global pharmaceutical company to profit from discovering a vaccine. Although Pfizer has already presented a solution that appears to significantly decrease the likelihood of suffering the adverse effects of the coronavirus, the company needs months to produce enough supply to satisfy the global demand. If GSK can develop and manufacture an alternative to Pfizer’s offering in the near future, it may be able to sell it in massive quantities.

In the long term, GSK might consider the possibility of improving the drug design process with artificial intelligence. The current high-throughput screening methods allow for thousands of tests to be conducted within a short period. However, the percentage of combinations that prove useful after such experiments is relatively low. Implementing specially trained AI into this process could improve the accuracy of initial predictions, resulting in dramatically quicker research.

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The main threat facing GSK’s profitability is the competition from generic medicines, which will increase as patents expire for some of the company’s most popular products. The price wars in the industry are also negatively affecting GSK’s position on the market. Finally, some countries are beginning to introduce limits on the prices of medicine (Bhasin, 2019). GSK will most be affected by India’s new regulatory measures if the country decides to implement them.

To conclude, the SWOT analysis shows that the company’s strategic future might be in expanding to skincare and wellness markets, where the competition is less intense. Competition is also the most significant challenge that GSK will have to overcome, although its image problems also require attention. Despite these problems, it appears that the pharmaceutical giant is likely to remain successful in the future if it takes the correct steps to remain viable. One way to maintain a competitive advantage might be through developing innovative research methods, which would allow GSK to discover new medicines before competitors. Another option would be to continue cooperating with other drug producers to gain unique assets.

References

About us. (2020). GSK. Web.

Bhasin, H. (2019). SWOT Analysis of GSK. Marketing91. Web.

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BusinessEssay. (2022, November 11). GlaxoSmithKline Company's Strategic Analysis. Retrieved from https://business-essay.com/glaxosmithkline-companys-strategic-analysis/

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BusinessEssay. (2022) 'GlaxoSmithKline Company's Strategic Analysis'. 11 November.

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BusinessEssay. 2022. "GlaxoSmithKline Company's Strategic Analysis." November 11, 2022. https://business-essay.com/glaxosmithkline-companys-strategic-analysis/.

1. BusinessEssay. "GlaxoSmithKline Company's Strategic Analysis." November 11, 2022. https://business-essay.com/glaxosmithkline-companys-strategic-analysis/.


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