1. Overview of GlaxoSmithKline plc (GSK).

- GlaxoSmithKline plc (GSK) is a British multinational pharmaceutical company

headquartered in London.
- Established in 2000 by a merger of Glaxo Wellcome and SmithKline Beecham.
- Research, develop and manufacture pharmaceutical medicines, vaccines and
consumer healthcare products.
- Operate in more than 150 markets and employ over 100,000 people globally.

[ CITATION Wik19 \l 1033 ]

More information:

- Industry: Pharmaceutical, biotechnology and consumer goods.

- Products: Pharmaceuticals, vaccines, oral healthcare, nutritional products, over-
the-counter medicines.
- Revenue: £30.821 billion (2018)
- Operating income: £5.483 billion (2018)
- Net income: £4.046 billion (2018)
- Number of employees: 98,462 (2017)
- Subsidiaries: Stiefel Laboratories
2. Concept of globalization.

Globalization is a term used to describe increasing social, economic, and political

interaction and interrelation across political and cultural boundaries. [ CITATION Car192
\l 1033 ]

Globalization describes an ongoing process by which regional economies, societies,

and cultures have become integrated through a globe-spanning network of
communication and trade. [ CITATION Fra181 \l 1033 ]

Globalization refers to the changes in the world where we are moving away from self-
contained countries and toward a more integrated world. [ CITATION Car182 \l 1033 ]

3. Driving factors of globalization.

The media and almost every book on globalization and international business speak
about different drivers of globalization and they can basically be separated into five
different groups:

- Political / Governmental Drivers

Political globalization drivers are largely linked to economics and the concept of free
trade, with policies leading to reductions in trade barriers and a shift towards an open
market economy. [ CITATION Jim171 \l 1033 ]

Government drivers include such factors as unrestrictive trade and investment policies;
compatible technical standards and common marketing regulations.

- Market Drivers

Market drivers refer to global market convergence. In other words, it is the increasing
similarity of consumer tastes and product preferences in certain markets.

Market drivers depend on customer behavior and the structure of distribution networks,
including the degree to which customer needs converge around the world, customers
procure on a global basis, worldwide channels of distribution develop, marketing
platforms are transferable, and “lead” countries in which most innovation takes place
can be identified. [ CITATION Anm11 \l 1033 ]

Common customer needs

Global customers

Global market channels

Transferable marketing

- Cost Drivers

Cost drivers is the opportunity for global scale or scope economics, experience effects,
sourcing efficiencies reflecting differentials in costs between countries or regions, and
technology advantages shape the economics of the industry. [ CITATION Rob15 \l 1033
]
 - Competitive Drivers

In the case of competitive drivers, the growing trade between nations along with foreign
direct investment (FDI) has helped to increase interdependence among countries and
organizations, as well as exposing firms to new competitors.

Competitive drivers are defined by the actions of competing firms, such as the extent to
which competitors from different continents enter the fray, globalize their strategies and
corporate capabilities, and create interdependence between geographical markets.

High two-way trade / cross-border FDI

Global competitors

Interdependence among countries

Policy Link

Trade/Investment Link

Management Link

[ CITATION Mic11 \l 1033 ]

- Technological Drivers

Technology has revolutionized the global economy. It shaped and set the foundation for
modern globalization.

Technological globalization is speeded in large part by technological diffusion, the

spread of technology across borders. [ CITATION Dan141 \l 1033 ]

4. PESTLE analysis

PESTLE analysis is an analytical tool used by entrepreneurs to analyze the macro-

environmental factors, considers external influences that have an impact on an
organization [ CITATION Mic092 \l 1033 ]. PESTLE denotes P for Political, E for
Economic, S for Social, T for Technological, L for Legal and E for Environmental.

- Political Factors:
These factors are all about how and to what degree a government intervenes in the
economy or a certain industry. This can include – government policy, political stability or
instability in overseas markets, foreign trade policy, tax policy, labour law,
environmental law, trade restrictions and so on. [ CITATION All16 \l 1033 ]

It is clear from the list above that political factors often have an impact on organizations
and how they do business. Organizations need to be able to respond to the current and
anticipated future legislation, and adjust their marketing policy accordingly.

- Economic Factors

Economic factors are determinants of a certain economy’s performance.

These factors may have a direct or indirect long term impact on a company, since it
affects the purchasing power of consumers and could possibly change demand/supply
models in the economy.

Consequently it also affects the way companies price their products and services.
[ CITATION Pra183 \l 1033 ]

Factors include economic growth, exchange rates, inflation rates, interest rates,
disposable income of consumers and unemployment rates.

It also accounts for the FDI (foreign direct investment) depending on certain specific
industries who’re undergoing this analysis.

- Social Factors

These factors scrutinize the social environment of the market, and gauge determinants
like cultural trends, demographics, population analytics etc. [ CITATION Mit16 \l 1033 ]

These factors are of particular interest as they have a direct effect on how marketers
understand customers and what drives them.

- Technological Factors

These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably.
This refers to technology incentives, the level of innovation, automation, research and
development (R&D) activity, technological change and the amount of technological
awareness that a market possesses. [ CITATION Geo16 \l 1033 ]
  GlaxoSmithKline plc PESTEL analysis.

C1: PESTLE analysis is an understandable concept in marketing principles where a

company can be able to track the environment of operation or plan on how to launch
new products or services. Thus, to progress in the pharmaceutical industry is a brilliant
idea to come up with a Pestle analysis. Let see the PESTLE analysis to monitor the
macro environmental factors that can have a big impact on GSK.

C2: PESTEL analysis provides great detail about operating challenges GlaxoSmithKline
plc will face in prevalent macro environment. Changes in the macro-environment factors
can have a direct impact on GlaxoSmithKline plc.

The 3 factors that I think have the most influence on GSK plc are political, technological
and social factors.

- Political factors

After winning the US presidential election, President Donald Trump made a request that
there will be no pressure on drug prices for their people and force pharmaceutical
companies to give big discounts to their best-selling drug. That would result in GSK
losing an income on their best-selling drugs as well as make GSK more competitive.
[CITATION Ben16 \l 1033 ]

British-based GSK is drawing up contingency plans to secure its supply chains after the
UK leaves the EU. Because after the UK leaves the EU, the relationship between the
UK and the EU countries is lax, leading to the costs that GSK cooperates with
manufacturers in the EU will increase. To avoid this, GSK is negotiating politically to
ensure that the UK government will guarantee minimal disruption will occur. [ CITATION
Edw16 \l 1033 ]

The political instability of the country in which GSK invests directly influences the
marketing strategy of GSK. [ CITATION Has17 \l 1033 ]

Changes in international trade regulation could also affect the formulation and selling
the product developed by GSK.
The competitive regulation can also affect as the trade of raw materials needed by the
GSK could be influenced by political instability.

Therefore, GSK should keep in mind the safety policy issued by the government and
making drugs according to it.

GSK should also adhere to producing the number of drugs recommended by the
government policies of countries that GSK invests.

- Technological factors

Technology can rapidly dismantle the price structure and competitive landscape of an
industry in a very short amount of time. It thus becomes extremely important to
constantly and consistently innovate, not only for the sake of maximizing possible profits
and becoming a market leader, but also to prevent obsolescence in the near future.

The advancement of the technology has affected the sales of the GSK. New machines
and new technologies are being used to increase the production. GSK also has formed
drugs using the latest technology to speed up the method of production.

Technological advancements will create new business prospects for GlaxoSmithKline

both in terms of new therapy systems and service provisions.

Thanks to the development of technology, GlaxoSmithKline can use their social media
platforms for healthcare service. GSK not only help answer questions about health
status and give them advice without meeting them in person, but also promote its
products and services to people around the world.

In 2016, GSK were ranked one of the lowest in terms of investment into R&D against
their competitors. To meet investors demands, GSK have invested to restructure their
R&D sector in 2017. In July, GSK have unveiled their latest investment in the field of
artificial intelligence. As part of a $43m deal, GSK are using AI to predict how drugs will
behave to save time and money on unnecessary traditional tests. [ CITATION Ben17 \l
1033 ]
From 2016 GSK have heavily invested in automation solutions to increase production
levels. Through software investments, GSK have now cut manufacturing request times
from three weeks to four days. This has allowed GSK to resupply companies faster and
provide financial saving in production times and minimize costly downtime. [ CITATION
Smi171 \l 1033 ]

GSK are also partnering with data handling companies to invest in supercomputers
which, GSK hope will reduce the time it takes to identify a disease. The advantage of
this would allow for faster development on medical treatments and the competitive
advantage on being first to market with new treatments. [ CITATION Ben17 \l 1033 ]

- Social factors

From 2016 GSK have announced that the company will no longer file drug patents in
the lowest-income regions of the world. It mean that affordable healthcare will be more
easily accessible to all. Furthermore, GSK also invests 20% of any profits its makes in
the least-developed countries into training health workers and building medical
infrastructure. [ CITATION SyM16 \l 1033 ]

Since 2015, GSK have worked to help combat the global epidemic of the Ebola Virus.
Working in partnership with the World Health Organization, GSK are funding projects to
improve existing Ebola vaccines. The positive publicity has resulted in GSK maintaining
a positive image of social responsibility by consumers. [CITATION Jan14 \l 1033 ]

Increasing age of the population is likely to affect the market of GlaxoSmithKline. Even
the obesity, smoking cigarettes, poor sanitation, drinking has threatened the
pharmaceutical industry. [ CITATION Afs17 \l 1033 ]

5. Challenges of globalization and strategic challenges.

5.1. Challenges of globalization.

As a multinational corporation, GSK is hard to avoid the challenges of globalization.

Currency risk is a challenge in globalization for GSK because when the exchange rate
fluctuates in the country that GSK is investing in, GSK may have a loss or profit
depending on the exchange rate at that time. [ CITATION Chr15 \l 1033 ]
Managers of GSK have to be competent in working across different cultures because to
be able to work across that cultures, GSK's managers need to be culturally aware of
international affairs or developments [ CITATION Ang17 \l 1033 ]. In order to work
across different countries, GSK managers need to be knowledgeable about different
cultures, have the appropriate knowledge and skills to approach a given geographic
market successfully.

Political risk of globalization is a challenge for GSK because GSK can face a loss in
value of each investment caused by the instability and political changes in foreign
countries. [ CITATION Joc19 \l 1033 ]

Public Relations: Public image and branding are critical components of most
businesses. Building public relations potential in a new geographic region is an
enormous challenge for GSK. [ CITATION Joh181 \l 1033 ]

Every nation has unique laws and regulations governing business. GSK need
understanding the legal and regulatory climate for pharmaceutical industry before
entering a new market to help understand in-country laws and comply with applicable
regulations.

(It is important for GSK to understand the legal and regulatory climate for
pharmaceutical industry and type of organization before entering a new market, so that
this information can be factored into the business case and strategic decisions about
where and how to expand globally, as well as strategic and operational planning to
ensure profitability.)

Another challenge of globalization for an organization is the global product structure,

this gives a global responsibility to GSK's group product managers who will be in charge
of the product line. [ CITATION Wil17 \l 1033 ]

The Host-country complaints about GSK plc because they feel that GSK want to drive
local competitors out of business, and the only protection of the practices of GSK is the
laws that protect the country's domestic businesses.

5.2. Strategic challenges.

 - Disturbance in personnel.

In the process of integration as well as globalization, the opportunity to get good jobs is
increasing. If feeling that the job does not meet needs, employees will quit the current
company and look for another business. Therefore, the number of key and loyal
employees is not much. Moreover, additional personnel for key management positions
based solely on the source of self-improvement and promotion within the enterprise will
be difficult to increase rapidly and keep pace with the expansion of scale. [ CITATION
Vuo14 \l 1033 ]

Therefore, in this condition, enterprises need to use external resources to support the
process of business restructuring and diversification. The senior management team of
enterprises needs to be supported and provided with experts' opinions in an accurate,
complete and objective manner as a basis for strategic planning.

- Ineffective training

Many businesses feel that employee training is costly and time consuming, resulting in
employees without skills training, not having opportunity to develop capacity and not
providing suitable work for employees. [ CITATION Mor181 \l 1033 ]

There are multiple modern options for unobtrusive, yet highly effective training that fit
into employees’ busy schedules. Finding the right training option saves money by
preventing too much down time, strengthens skills or teaches new skills, and provides
follow up to ensure employees execute those lessons in their daily workflows.

- Lack of tracking

Failure to regularly assessments of strategies to review the processes, ensure the plan
is implemented in accordance with the process and make any necessary adjustments
are the causes of the failure strategy, leading to the occurrence of risks and
disadvantages for business strategy.

6. Recommendations.
 - Establish a thorough staff training process, helping employees improve their
expertise so that businesses can maximize the potential of human resources in
the future.
7. Strategy of diversification.

A strategy to invest in many different industries and sectors when businesses have a competitive
advantage in current business activities. There are many reasons for businesses to pursue a
diversification strategy, but in general, diversification strategies often aim to add value.

This strategy is suitable for businesses that are unable to achieve their current industry growth
targets with currently marketed products and markets. This is a way to improve competitiveness in
the market.

* Other reasons that enterprises must diversify are:

- The life cycle of one or more products is approaching the point of saturation or degradation.

- Enterprises with a capital balance can invest in another place with a higher profit.

- Limit risks.
- Increasing market power relative to competitors There are 2 growth strategies by diversification.
http://quantri.vn/dict/details/7987-chien-luoc-tang-truong-bang-cach-dang-dang-hoa

- Not meeting the original goal:

Depending on the initial long-term goals when forming the business, it may bring
benefits or disadvantages to the business. If the business has an initial long-term goal
of sales, competitive position, or scale, diversification can benefit them. Diversifying
business strategies can help businesses increase market power relative to competitors
with 2 growth strategies or scaling up other industries.

If diversification is not in line with the initial long-term goals of the business, the initial
strategy of the business may be diluted, the enterprise does not have enough
knowledge or professional experience to develop a new direction. As a result,
enterprises may suffer from capital losses and bring more risks to their organizations.
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