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
GlaxoSmithKline – Opportunities---------------------------------------------------------------------------8
Opportunity - Strategic Agreements -----------------------------------------------------------------8
Opportunity - Product Approvals and Launches -----------------------------------------------9
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

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 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 UK’s largest and world’s 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.
(www.gsk.com).

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.
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.
www05.abb.com/.../improving%20business%20performance%20conference.pdf

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 GSK’s 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.

http://www.envido.co.uk/resources/529-glaxosmithkline-could-save-p100m-in-2020-by-
becoming-carbon-neutral

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

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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 )
http://www.ft.com/cms/s/0/cc62a6c0-2468-11e0-8c0e-00144feab49a.html#axzz1L5qNTnot

Weakness - Patent Expiry

The life of a patent in most countries is 20 years from the filing 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.

5
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.
http://www.ft.com/cms/s/0/54fa8bb4-233e-11e0-b6a3-00144feab49a.html#axzz1L5qNTnot
The company’s 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”. (http://www.the-rtma.com)

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

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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.
http://www.zenopa.com/news/18673800/GSK_receives_BITC_CommunityMark

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
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 significantly
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 efficacy against
disease or safety issues or drug reactions, an inability to get necessary approval by
regulatory authorities, difficulty 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

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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
benefit and or risk balance of drugs, which has made it more difficult 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

 www.gsk.com Corporate Reporting, GSK annual report 2010 Business Review

 Improving Business Performance Conference. 2 nd March 2011 Thorpe Park Hotel

Leeds.

 www.envido.co.uk/resources 11th April 2011 GSK Carbon neutral

 Financial Times UK
http://www.ft.com/cms/s/0/cc62a6c0-2468-11e0-8c0e-
00144feab49a.html#axzz1L5qNTnot

 Data monitor (2006), “Parallel importing and pricing issues”, Business Insights
Limited

 GSK on Collision course with the European commission, viewed 30 March 2008
<http://www.the-rtma.com>

 GSK Awaard
 http://www.zenopa.com/news/18673800/GSK_receives_BITC_CommunityMark

 Patents and the pharmaceutical. Industry <http://www.abpi.org.uk>

 The Pharmaceutical sector in the UK <http://www.berr.gov.uk>

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 Plagiarism Report

This plagiarism report is generated using a free plagiarism scanner available to students named
viper (www.scanmyessay.com/ ). The results of some other professional plagiarism scanner used
may show some different results.

How does Viper work?

(Click here for full explanation)

Report for 'GSK SWOT.doc'

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 …

http://www.swot-pest-porter.com/modules/info/index.php?content_id=45
… 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 …

http://www.swot-pest-porter.com/modules/info/index.php?content_id=45
… The company is also a leader in the manufacture of vaccines and is also engaged in the
development of new treatments to …
… OTC …
Students Paper:
… new OTC products . The company sells its products under three sections including consumer
healthcare, prescription medicines, and vaccines.
The table below …

http://www.swot-pest-porter.com/modules/info/index.php?content_id=45
… United States. The company sells its products under three sections including consumer
healthcare, prescription medicines, and vaccines. ÿ GlaxoSmithKline …

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