Glaxosmithkline portfolio

Glaxo Smith KlineBy, Siddaram.Tegnoor

GSK’S Introduction

GlaxoSmithKline often abbreviated to GSK, is a global pharmaceutical,

Biologics, vaccines and consumer healthcare company headquartered

in

London, United Kingdom.

It is world’s third largest pharmaceutical company measured by

revenues ( after Johnson and Johnson and Pfizer).

It has a portfolio of products for major disease areas including

asthma, cancer, virus control, infections, mental health, diabetes and

digestive conditions.

Overview of Industry

Pharmaceutical industry has been witnessing phenomenal growth in recent years, driven by consumption level in the country and string demand from export markets.

Pharmaceutical industry in India is estimated to be worth US$10 Billion, growing at an annual rate of 9%.

In world rankings, the domestic industry stands fourth in terms of volume and 13th in terms of values.

The rankings in value terms may also be reflection of low prices at which medicines are sold in the country.

A highly fragmented industry, the Indian pharma industry is estimated to have over 10000 manufacturing units as given by Organization of Pharmaceutical Producers Of India.

Overview of Company

GlaxoSmithKline plc is a public limited company incorporated on 6th December 1999 under English law. Its shares are listed on the London Stock Exchange and the New York Stock Exchange.

On 27th December 2000 the company acquired Glaxo Wellcome plc and SmithKline Beecham plc, both English public limited companies, by way of a scheme of arrangement for the merger of the two companies.

GSK and its subsidiary and associated undertakings constitute a major global healthcare group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health-related products.

GSK has its corporate head office in Brentford London and has its US headquarters in Research Triangle Park, North Carolina, with operations in some 120 countries, and products sold in over 150 countries.

Objectives of Glaxosmithkline

Grow a diversified global business

Deliver more products of value

Simplify the operating model – (GSK is a large and complex organisation)

Company slogan- ”Do more, feel better Live longer”

.

Size of the company:

GlaxoSmithKline is a Public limited Pharmaceutical, Biotechnological, consumer goods company.

GSK is world’s sixth largest pharmaceutical company. Single largest company in United states.

Headquartered at Brentford, LONDON. GSK key people are Chairman- Sir Philip Hampton CEO- Sir Andrew witty GSK’s products includes Vaccines, oral healthcare , nutritional

products, over-the –counter medicines. Total Revenue of company is £23.923 billion(Euros) with operating

income of £10.322 billion (2015) , and net income of £8.372 billion(2015)

There are 96,575 employees with 12500 in R&D within GSK as per 2015 with offices in over 115 countries.

Portfolio of Glaxosmithkline

GlaxoSmithKline has leading global positions in respiratory diseases & HIV with a portfolio of innovative and established medicines.

GSK has a broad portfolio of 39 pediatric, adolescent adult & travel vaccines.

GSK has a portfolio of some of the world’s most trusted and best selling brands which include Sensodyne, Horlicks, Voltaren & Panadol.

GlaxoSmithKline has the most comprehensive vaccines portfolio in the Industry.

SWOT AnalysisSTRENGTHS

Strong sales and marketing infrastructure.More profitabilityMore ability to service debts

WEAKNESSExpenses are greaterAssets use inefficiently

OPPURTUNITIESMarket growthMore liquidityGreater attraction for debtor

THREATSGreater ROE of competitorImpact of generic erosion to sales.

RecommendationCost needs to be controlled by either going for forward or backward

integration.Total turnover and operating turnover should be increased to level of

Industry.

PORTER`S FIVE FORCES ANALYSIS:GLAXOSMITHKLINE PLC

GlaxoSmithKline is a pharmaceutical company firm adjudged the world's sixth-largest pharmaceutical company after Johnson and Johnson, Novartis, Hoffmann-La Roche,Pfizer, and Sanofi.

MARKET STRUCTURE:Oligopoly: This verdict is based on the concentration ratio of the few large firms like GSKthat collude to control the market and the high level of restrictions encountered by newFirms.

THE ANALYSISThis report is based on the FIVE PORTER ANALYSIS of GlaxoSmithKline; considering theindustry in which it exists and analyzing how much of a threat are the different industrycomponents are to the firm.

The five forces are as propagated by Dr Porter:

1. Threat of new entrants GSK spent £3.4 billion on their core R&D in 2013. VERDICT: Threat of new entry Is LOW.

2.Bargaining power of buyers : Switching cost is low and there is almost seamless ease to substitutes from

similar firms. There is relative price performance of goods as competing firms incur similar production cost.

The other substitute are the generic drugs and complementary alternative medicine.

VERDICT: Threat of substitute is HIGH.

The five forces are as propagated by Dr Porter:

3.Bargaining power of suppliers The NHS is the major buyer of pharmaceuticals and they wield so much power when it comes to price determination.VERDICT: Bargaining power of buyers HIGH.

4.Threat of substitute products or services 4GlaxoSmithKline poses the threat of backward integration to suppliers.Most pharmaceutical companies own their own manufacturing plant. This impliesthat suppliers seldom change prices unreasonably.VERDICT: Bargaining power of suppliers is LOW

5.Rivalry among existing firmsThe competition is strategically aggressive with top players vying for supremacyin addition to the pressure of coming up with the “next top drug”VERDICT: Industry rivalry is very HIGH.

By, Siddaram TegnoorMBA I year,VTU Kalburgi.

Thank you..