This article is all about the GSK Swot Analysis and its Competitors.
GSK is a global healthcare company, with operations in over 100 countries. It was founded in 2000 by GlaxoSmithKline plc. The company has its headquarters in Brentford, London, United Kingdom. The current CEO is Emma Walmsley.
SWOT analysis is a strategic planning tool that can be used to identify an organization’s strengths, weaknesses, opportunities, and threats. In the business world, it is widely used at the strategic level to provide a clear analytical framework.
It can be applied in any field of interest to help organizations understand their position relative to their competitors and the environment in which they operate. It helps them make more informed decisions about what steps should be taken next to improve their competitive position.
What are the strengths of GlaxoSmithKline?
Leading global company
The strength of GlaxoSmithKline in the pharma industry is its wide range of products, which include drugs, vaccines, diagnostic kits, non-prescription drugs, and many other pharmaceutical products. GSK pharmaceuticals is a leading global company in the field of pharmaceuticals.
The following strengths are supporting of the growth of GSK as one of the leading pharmaceutical companies:
- GSK is listed in the major US and global stock exchanges.
- They enjoy much support from influential investors including Big Pharma in the US and Europe.
- In addition, they have strong support from the government and regulators.
- They enjoy support from a large number of healthcare professionals and a diverse group of partners and suppliers.
- GSK enjoys substantial economies of scale as they have a presence in many geographies which allow for economies of scale.
The company’s products are highly likely to be used to treat people suffering from various diseases, including high blood pressure, respiratory disease, diabetes, high cholesterol, viral diseases, cancer, and blood clotting disorders. Some of the strengths are mentioned below:
Strong R&D
GSK has a well-defined international presence and strong presence in emerging economies with total sales of over $39 billion in 2016. Furthermore, GSK has huge investments in international hubs and research and development facilities.
GSK has constantly made efforts in pharmaceutical R&D to bring in new drugs and to strengthen the products portfolio. The company has adopted a bolder approach to R&D activities.
Powerful sales network
The global pharmaceutical industry has witnessed a very strong recovery over the last few years. This has resulted in strong growth in various segments including the consumer healthcare market. The recent acquisitions of drugs by the US-based Janssen, Sanofi, Pfizer, and Bristol Myers, and of firms like Alcon, LifeScan, and the Asian manufacturer Sun Pharma, among others, strengthens the company’s overall position.
The strong position of its consumer healthcare division also aids the company in its global strategy. This is likely to boost the overall revenues of the company. GSK’s presence in the emerging markets is a strong catalyst to its prospects.
What are the weaknesses of GlaxoSmithKline?
Poor performance
Analysis of the GlaxoSmithKline Plc R&D performance shows that the company is not generating enough research and development productivity. It was ranked at #12 (behind Johnson & Johnson, Roche, Bayer, Novartis, and Sanofi) in terms of research and development productivity in 2014.
Current results are poor with the revenue from research and development growing at a rate of only 4% per year, even though the number of employees employed has increased significantly over the years. The financial performance of Glaxosmithkline Plc has not improved over the years. Some of the weaknesses are mentioned below-
- Failure to boost U.S. sales with key drug marketing programs in the last two years.
- Risks associated with falling consumer trust and heightened competition.
- Slow approval time for the new drugs for which the company has invested a lot in developing.
The controversies surrounding GlaxoSmithKline are endless
GlaxoSmithKline has been a company of controversy for years. This is not only due to the issue of safety about their drugs but also because they are seen as one of the world’s most unethical corporations.
Many reasons have led to this, including illegal business practices and unethical marketing tactics. The controversies surrounding GlaxoSmithKline are endless, affecting their reputation and image worldwide.
Opportunities in the swot analysis of GSK
Strategic agreements
The pharmaceutical industry is highly regulated, and companies in the business need to maintain a positive relationship with regulatory agencies. One way this is done is through strategic agreements.
GlaxoSmithKline has these agreements with other pharmaceutical companies. As one of the world’s leading research-driven healthcare companies, GSK partners with other pharmaceutical firms to help bring drugs to market faster.
These partnerships can result in increased resources for innovation and provide an additional avenue for funding new treatments.
Spreading awareness
The World Health Organization (WHO) has identified six key areas of health that are crucial to the development of a healthy society. These include sexual and reproductive health, mental health, substance abuse, non-communicable diseases, injuries, and child mortality.
GlaxoSmithKline has been committed to addressing these issues for decades by investing in research and advocacy for healthier societies globally. The company’s commitment to improving healthcare is not only limited to the products they produce but also how they work with people to understand their healthcare needs.
They are increasing awareness about what it takes to address these six key areas of health so that all people have better access to sustainable healthcare solutions.
Threats in the swot analysis of GSK
The rising preference of consumers for generic drugs, high R&D costs, and lack of regulatory approvals of key drugs can restrain the growth of the company in the coming years. Nevertheless, GSK is attempting to counter such adversities by increasing focus on the R&D work and entering into new business segments.
The high amount of debt held by GSK is a concern for the company. Such high debt will hamper the company’s efforts to scale new heights. However, I expect GSK to pay off the debt in due time, by reducing the leverage of the company.
Legal threats
Several ongoing legal cases of GSK may drag on. These include those that are related to five of the world’s largest drug companies. This threatens the industry-wide revenue that these pharma giants collectively generate.
It has been found that GSK executives tried to influence other executives to purchase an entire parcel of land for USD 650 million for a proposed research center in India in 2008. GSK is also reportedly facing regulatory hurdles in several countries, for not reporting financial risks or other internal control failures, as required by the US government. These cases add to the risk for the company.
Economic threats
The economic slowdown and increased debt problems in China and other emerging markets are a threat for GSK. Excess demand from emerging markets can also pose a threat to the growth of the global pharmaceuticals market.
A rise in the population and technological advancements should ensure that the demand for medicines increases soon. The medical devices industry is largely affected by the strong dollar which adversely affects the profitability of GSK.
The company has made efforts to mitigate the effect of the strong dollar on its earnings, mainly by shifting its manufacturing base to India. Moreover, debt load in emerging markets is another risk factor for GSK.
Technological threats
Manufacturers are often compelled to upgrade or re-invent existing products to stay relevant in the marketplace. However, new technologies could bring unknown security threats to a brand and can impact future sales in the market.
In the next five years, the pharmaceutical market in India is expected to expand at a compounded annual growth rate of 12.67%. The Indian generic drug market is expected to grow at a compound annual growth rate of 18%.
In the same period, the branded drug market is expected to grow at a CAGR of 7.75%. Despite the rapid changes in the Indian pharma industry, GSK has announced that it will continue to invest in India and also open manufacturing plants in India.
GSK’s competitors
GSK is not the only pharmaceutical company with a competitive edge in the market. Many other companies are also involved in the industry and have a wide range of products in the market. Some of these companies are Merck, Abbott Laboratories, Sanofi, Pfizer, Novartis, among others.
With a market cap of more than $100 billion, GlaxoSmithKline (GSK) is the fifth-largest pharmaceutical company in the world. With an array of prescription drugs for asthma, depression, HIV, and other conditions, GSK is one of the most profitable healthcare companies in the world.
When it comes to competitors, GSK’s main rivals are Roche Holding AG, Pfizer Inc., Novartis AG, Merck & Co., Inc., Johnson & Johnson, and Eli Lilly & Company.
GSK is a global company, with operations in more than 100 countries. It has four businesses: Pharmaceuticals, vaccines, consumer healthcare, and animal health. GSK’s main competitors are other pharmaceutical companies, such as Novartis or Pfizer.
What can the company do to improve?
GlaxoSmithKline needs to invest more in research and development to become a technological company. But, it hasn’t been able to invest as much as it has to. This is due to the uncertainty of future drug launches.
However, investors have to remember that these uncertainties are part of a given business. GlaxoSmithKline can invest more in R&D to help gain a competitive advantage in the highly competitive pharmaceutical industry.
GlaxoSmithKline needs to focus on building a manufacturing capacity. This will help it to lower its costs and gain access to a larger market.
Conclusion
GlaxoSmithKline Plc is a business with a wide and complex scope, and the market has recognized its enormous potential. Being a leader in the industry, it is very likely to capitalize on its brand recognition and capture the best opportunities for growth and profits.
However, the shares of GlaxoSmithKline Plc are expensive and they have rallied considerably over the past year, which may not be the best time to buy.
Frequently asked questions
Question 1.) What are the strengths of GlaxoSmithKline?
Answer- The strength of GlaxoSmithKline in the pharma industry is its wide range of products.
Question 2.) What can the company do to improve?
Answer- Glaxosmithkline needs to invest more in research and development to become a technological company.
Question 3.) Who are the competitors of GlaxoSmithKline?
Answer- Some of these companies are Merck, Abbott Laboratories, Sanofi, Pfizer, Novartis, among others.
Question 4.) What are the weaknesses of GlaxoSmithKline?
Answer- Slow approval time for the new drugs for which the company has invested a lot in developing.
