Corporate Strategy and Global Policy
Autor: Heatherinsh • August 22, 2016 • Coursework • 3,098 Words (13 Pages) • 922 Views
Paper in: MBA 2390 Corporate Strategy and Global Business
For: BI-Fudan MBA Program
Date turned in: Jul 18, 2016
COMPANY OVERVIEW
GSK is a science-led global healthcare company with three world-leading businesses that research, develop and manufacture innovative pharmaceutical medicines, vaccines and consumer healthcare products. With a significant global presence with 101,255 employees in more than 150 markets, its business generated turnover of £23.9 billion in 2015. GSK’s strategy is designed to generate sustainable sales and earnings growth and improved returns to shareholders and benefits to patients and consumers.
GSK has a long history of improving health in China which can be traced back to the early 1900s. China business covers pharmaceutical, vaccines and consumer healthcare.
Here is an overview of the activities of GSK China:
- Research & Development
GSK has 5 large R&D centers in the UK, USA, Spain, Belgium and China. It is the only end-to-end multinational pharmaceutical company in China which can take innovative products from molecule to market. The total investment in China exceeds $500 million. GSK partners with more than 1,500 organisations around world, including academic institutions, public-private partnerships and other pharmaceutical and biotechnology accompanies.
- Manufacturing & Supply:
Each year GSK produce more than two billion packs of medicines, more than 690 million doses of vaccines and more than 5 billion packs of consumer healthcare products through 89 manufacturing sites in 36 countries. GSK has six manufacturing sites in China. Two of them are equipped with advanced production lines so that GSK can manufacture the products by itself.
- Sales & Marketing:
GSK has 7000 employees in 242 cities, in which 2000 are sales representatives. The target markets segments are mainly the tier 1-4 cities. GSK focuses on six core areas: HIV and infectious disease, oncology, immune-inflammation, vaccines, respiratory and rare diseases. It has a leading position in Respiratory and HBV area. It also ranks 1st in Consumer Healthcare in China market.
EXTERNAL COMPETITION ENVIRONMENT
To give a brief overview of the external competitive situation for GSK, I will use PESTEL and Five forces analysis (Porter, 1980).
Step 1: PESTEL Analysis:
Component | Impact (High-Low)/Description |
Political | High. The Chinese government plays an important role in healthcare reform and it is stated that the Chinese government will continue to expand its healthcare coverage at the county level. |
Economic | Low. In healthcare industry, people are less price-conscious. |
Social | High. The aging of China’s population is accelerating and it is predicted that by 2020, 20% of China’s population will be over 60 years of age. Meanwhile, China’s middle class continues to expand and middle-to-upper class households are going to make up 60% of all urban households. Chinese consumers have stronger healthcare awareness than ever before, they have increasingly high demand on their own healthcare. |
Technological | High. New drugs must be identified, tested in increasing sophisticated trials, and approved by the Food and Drug Administration. On average, this process takes 13 years and cost $2 billion. The success rate is low: only one drug in eight manages to pass through clinical trials. Therefore, R&D consortia are important. |
Environmental | Low. This has little impact on pharmaceutical industry. |
Legal/ regulatory | Low. This has little impact on pharmaceutical industry. |
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