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Vision&Mission:

Theopportunitytomakeadifferencetothelivesofbillionsofpeople

GlaxoSmithKlinehasachallengingandinspiringmissiontheirmissionistoimprovethequalityofhumanlifebyenablingpeopletodomore,feelbetterandlivelonger

MISSION STATEMENT Our mission is to help people do more, feel better, live longer.The business is focused around the delivery of three strategic priorities which aim to increase growth, reduce risk and improve our long-term financial performance. These priorities are: grow a diversified global business, deliver more products of value, and simplify the operating model.Operating responsibly and ensuringour valuesare embedded in our culture and decision-making helps us better meet the expectations of society.

ANALYSIS OF MISSION STATEMENT COMPONENTS YES/NODESCRIPTION CustomerYESPeople ProductNO-MarketYESgrow a diversified global businessTechnologyYESsimplify the operating modelSurvival GrowthYESIncrease growthPhilosophyYES improve our long-term financial performanceSelf-ConceptNO-Public ImageYESto increase growth, reduce riskAbout GlaxoSmithKline Pakistan Limited

GlaxoSmithKline Pakistan Limited was created January 1st, 2001 through the merger of SmithKline and French of Pakistan Limited, Beecham Pakistan (Private) Limited and Glaxo Welcome (Pakistan) Limited- standing today as the largest pharmaceutical company in Pakistan.As an industry leader we are committed to our mission of providing patients quality products to help improve their lives.

GlaxoSmithKline (GSK) is a world leading research-based pharmaceutical company with a powerful combination of skills and resources that provides a platform for delivering strong growth in today's rapidly changing healthcare environment.GlaxoSmithKline Pakistan Ltd was formed in 2002 as a result of the global merger of two pharmaceutical giants; GlaxoWellcomeplc and SmithKline Beecham plc.

History

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 London and has its US headquarters in Research Triangle Park, North Carolina, with operations in some 120 countries, and products sold in over150 countries.

Our Values

Respect for PeopleWe believe that respecting each other is the key to progress and growth for our business, employees and customers. Our employment practices are designed to create a culture, in which all GSK employees feel valued, empowered and inspired to achieve our goals.Patient Focused Our commitment to our purpose of improving the lives of billions ensures that all our efforts, be it research, manufacturing or distribution are geared towards improving patient access to quality health solutions.TransparencyAs our business evolves to meet global challenges, so do our existing systems for which transparency is integral. By being transparent about what we do and how, we earn and build trust.IntegrityOur guiding principles go beyond complying with legal and ethical regulations. Each member of the GSK family takes pride in doing what is right for the patients and consumers, placing them at the heart of every decision we make. In doing so, we demonstrate integrity in action, at every level, every day.CURRENT STRATEGIC DIRECTION:Strategic PrioritiesWe are focused on the delivery of five strategic priorities to achieve our mission of helping people do more, feel better and live longer. Everyone at GSK has a role to play in delivering our strategic priorities:

Grow a diversified, global businessWe are creating a more balanced business with a wider global reach and broad portfolio. This expands access to our products and produces sustainable growth for our shareholders.Deliver more products of valueWe are investing in innovation to improve our ability to create new medicines, vaccines and consumer healthcare products that offer valuable improvements in treatment.Create a culture of individual empowermentWe are building a culture where employees are empowered, united by our values and able to achieve great things.Simplify the operating modelAs our business continues to change shape, we are transforming how we operate so that we can reduce complexity and become more efficient. This is allowing us to free up resources to invest in other areas of the business and improve shareholder returns.Building trustWe are committed to operating responsibly and ensuring that our behaviour and actions meet or exceed the expectations of society.GlaxoSmithKline plc is a public limited company incorporated on 6th December 1999 underEnglish law. Its shares are listed on the London Stock Exchange and the New York StockExchange. 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. Both Glaxo Wellcome and SmithKlineBeecham were majorglobal healthcare businesses.

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

GSK has its corporate head office in London. It also has operational headquarters in Philadelphia and Research Triangle Park, USA, and operations in some 114 countries, with products sold in over 140 countries. The principal research and development (R&D) facilities are in the UK, theUSA,Belgium, Italy, Japan and Spain. Products are currently manufactured in some 38countries. The major markets for the Groups products are the USA, France, Japan, the UK,Italy, Germany and Spain.

DEVELOPMENT OF THE COMPANYORGANIZATION AWARDS

business in the community awardAwards for diversity and our community work.Corporate equality, US Human Rights Campaign Foundationbest diversity companyDiversity and equal treatmentbusiness championEnergy management through resilience and mental wellbeingMost socially responsible companyMost family friendly companyAchieving significant milestones in leadershipinitiativeGlobal Super Achiever awardExcellence Through People standardSupporting the local communityWorld-class health and safety excellence awards.Gold H.E.A.L.T.H awardCEO cancer gold standardbest employers for healthy lifestyle gold awardUnique workplace ergonomicsHelping employees recognize health and performance linksAwards for excellence 2007

PRODUCTS OF THE COMPANYMEDICINESGSKpharmaceutical products include treatments for asthma, HIV/AIDS, malaria, depression, migraine, diabetes, heart failure, digestive conditions and cancer.

GSKtop selling products in 2007 are designed to treat:Asthma , Epilepsy ,Diabetes , Herpes ,Migraine

LIST OF MEDICINESAdartrel, Advair, Albenza, Alkeran, Altargo,Amerge, Amoxil,Andropatch, Anectine, Arixtra, Argatroban, Arixtra, Arranon, Atriance,Augmentine, Avandamet, Avandaryl, Avandia, Avodart, AxidCeftin, Cicatrin, Combivir, Coreg, Coreg CR,CutivateDaraprim, Dermovate, Dexedrine, Digibind, Doralese Tiltabs, Dyazide, DynaCirc CR

VACCINESGSK make over 30vaccines that protect against a wide range of diseases including:Cervical Cancer, Diphtheria ,Hepatitis A and B, Influenza Meningitis, Polio, Rotavirus, Whooping Cough

LIST OF VACCINESA C W Y Vax, Ambirix,Bootrix, Cerarix, Engerix, Fendrix, Fluarix, Flulaval, Havrix, Heptyrix,Hiberix, Infanrix, Infanrix IPV, Infanrix IPV+Hib, Kinrix, Menitorix, Pediarix, Poliomyelitis,Priorix, Rotarix, Twinrix,, VarilirixETC.CONSUMERHEALTHCARE BRANDS

GSK bring dental health products, over-the-counter medicines and nutritional drinks to millions of people. Many of our brands, such as Panadol, Aquafresh, and Lucozade are familiar around the world.

LIST OFCONSUMERHEALTHCARE BRANDS:Abreva, Abtei, Alli, Alluna,Aqua fresh, Astriginsol.BC Powder,Beano,Beechams,Breath Right Cetebe , Chap-et, Chlorhexamed, Cholinex , Coldrex , Citrucel, Commit Lozenge, Committed Quitters, Contac, Corega , Corsadyl , Cortal, CrocinDebrox, Dequadin, Dr.BestEcotrin, Eno, Eumovate, EunovaFenbid, Feosol, Fiber Choice,Flinonose Allergy, Formigran,Gaviscon,Gerital, Gly-Oxide, Goodys Powder, GranufinkHibitane, Hinds, HorlicksImigran Recovery, Insto, Ioden, Iodoson

COMPETITORSMEDICINESThe pharmaceutical industry is highly competitive. GlaxoSmithKline believes thatits competitive position is dependent upon the discovery and development of new products, togetherwith effective marketing of existing products. Within the pharmaceutical industry, the introduction of new products and processes by competitors may affect pricing levels or result inproduct replacement, and there can be no assurance that GlaxoSmithKline's products may notbecome outmoded,notwithstanding patent or trademark protection. In addition, increasing government and otherpressure for physicians and patients to use generic pharmaceuticals ratherthan brand-name medicines may increase competition for products that have gone off patentVACCINESGlaxoSmithKline's major competitors in the vaccine market include Aventis Pasteur, Merck and American Home Products.Engerix-B andHavrix compete with vaccines produced by Merck -Comvax and Recombivax HB for hepatitis B and Vaqtafor hepatitis A.Infanrixs majorcompetitors are Aventis Pasteurs Tripedia and TriHIBit, and Wyeth Ayersts Acel-Imune and Tetramune.

CONSUMERHEALTHCAREThe major competitors in the consumer healthcare markets are Procter & Gamble, Colgate-Palmolive, American Home Products, Unilever and Johnson & Johnson. In the USA, the major competitor products in OTC medicines are: Tylenol Cold (cold remedy),Clearasil (acne treatment), Pepcid (indigestion) and private label in smoking cessation. In the UK the major competitor products are: Lemsip (cold remedy), Nurofen and Anadin (analgesics) and Nicotine (smoking cessation remedy).In nutritional healthcare the major competitors to Horlicks are Ovaltine and Milo malted food and chocolate drinks. The competitors to Ribenaare primarily local fruit juice companies while Lucozade competes with other energy drinks. ABOUT EMPLOYEES GlaxoSmithKline plc is rated # 5 in number of employees category among related companies. The total workforce of Drug Manufacturers - Major industry is currently estimated at about 789,792. GSK retains roughly 99,451 in number of employees claiming about 13% of equities under Drug Manufacturers - Major industry.About Number of EmployeesEmployee typically refers to an individual working under a contract of employment, whether oral or written, express or implied, and has recognized his or her rights and duties. Most of corporations are included as employees and contractors are generally excluded. Compare Gsk to competition predict GSK.

Based on recorded statements GlaxoSmithKline plc is currently employing 99.45 K people. This is 1190.38% higher than that of the Healthcare sector, and 546.29% higher than that of Drug Manufacturers - Major industry, The Number of Employees for all stocks is 967.71% lower than the firm. Pharmaceuticals competitionThe pharmaceutical industry is highly competitive. GSKs principal competitors range from small to large pharmaceutical companies often with substantial resources. Some of these companies and their major products are mentioned below.

Pharmaceutical companyEli Lilly and Company is an American global pharmaceutical company with headquarters located in Indianapolis, Indiana, in the United States. The company also has offices in Puerto Rico and 17 other countriesPfizer Pharmaceutical companyPfizer, Inc. is an American multinational pharmaceutical corporation headquartered in New York City, and with its research headquarters in Groton, Connecticut, United States. It is one of the world's largest pharmaceutical companies by revenues. Merck & Co. Pharmaceutical companyMerck & Co., Inc., d.b.a. Merck Sharp & Dohme, MSD outside the United States and Canada, is an American pharmaceutical company and one of the largest pharmaceutical companies in the world. Merck headquarters is located in Kenilworth, New Jersey

Eli Lilly and CompanyWhat is company doing?GSK manufactures drugs and vaccines for major disease areas such as asthma, cancer, infections, diabetes, digestive and mental health conditions, the biggest selling of which were,Avodart,Flovent,Augmentin,Lovaza, and Lamictal in 2013Many medicines were historically discovered or developed at GSK and its predecessor companies and are now sold as generics. Its drugs and vaccines earned 21.3 billion in 2013. Its consumer healthcare division, which earned 5.2 billion in 2013, sells oral healthcare and nutritional products, drinks and over-the-counter medicines, including Sensodyne Boost and Horlicks.GlaxoSmithKline received top ranking among international pharmaceutical companies in the Access to Medicines Index in 2010, 2012 and 2014.In 2014 the company applied for regulatory approval for the first vaccine against malaria. The vaccine was developed as a joint project with the PATH vaccines initiative and the Bill and Melinda Gates Foundation. The company has committed to make the vaccine available in developing countries for a price set at 5% above the cost of production.

GlaxoSmithKline PESTEL AnalysisGlaxoSmithKline PESTEL Analysis.The level of implementation of GlaxoSmithKline (GSK) marketing strategy is subject to a range of external and internal factors that shape overall marketing environment for the business. PESTEL strategic analytical tool can be used to study the impacts of external factors to the business where the abbreviation stands for political, economical, social, technological, ecological, and legal factors.Political factors: Political factors affecting the implementation of GSK marketing strategy include possible changes in international trade regulation and competitive regulation likely to be introduced by the governments of China and India.

Economic factors :Economic factors impacting GSK marketing strategy include high rate of economic growth in China and India. Moreover, current economic uncertainties associated with European markets might have negative implications on the marketing strategy

Social factors: Social factors with potential implications on GSK marketing strategy are changes in consumer lifestyles, shifts in consumer attitudes and opinions etc. However, Cameron (2012) specifies increasing level of customer resentment towards large amounts of profits made by pharmaceutical companies and sliding images of large pharmaceutical companies as the most significant social factor in the current environment.Technological factors: Technological factors include breakthroughs in pharmaceutical industry, issues associated with licensing and patenting drug manufacturing technology, as well as, the level of development of industry technology.

Ecological factors: Ecological factors also have specific implications on GSK marketing strategy that include problems related to global warming, and impact to the environment of GSK activities, and the reaction of stakeholders to this impact

Legal factors:Legal factors as one of the most important factors involve rules and regulations directly and indirectly related to GSK operations in local markets, as well as, European law and international trade rules, regulations and agreements.

Strengths: GSK has Strong Sales. Their balance sheet and financial statements is good and comprehensive. Good marketing infrastructure. It has strength in Industry leading R&D team. GSK has an effective implementation and execution of strategic priorities, lifecycle management strategies and business fundamentals. It also has the ability to reduce on costs.SWOT Analysis: Weaknesses: GSK, has no clear, widely shared goals for the system. Lack of sustainable training and management skills. It faces difficulties with continuity of care (leading to frequent cases of patientslost in system). Raising cost sharing- this is as an expression of inability to cope with costIncreases. The inter-sectorial linkages between health care, public health and social care isPoor. The possibility of Co-marketing agreements limiting GSK's global presence. It also has an unsustainable revenue base. The company is geographically and diversely located. GSK has a low ability to retain the professionals.

Opportunities: GSK possess a strong cash and assets position. It is an opportunity for GSK to entry into antibodies and biologics segment of market. GSK has the potential to deliver strong growth by R&D team. The effect of generic products sales on sales of the company. It also has the potential to expand business in emerging markets. Positive change in governmental and federal laws that may concerns with the healthcare.Threats:The threat of demographic change and ageing The threat of counterfeit drugs being sold in competition with legitimate products Higher expectations of people to health system The increasing cost of drug trials and ever higher standards imposed by national drug approvals bodies. An increase in the number of safety issues surrounding products The threat of competition from products similar to GSK's in R&D that reaches the market close to or before GSK's products. The ecological and public health threats The new economic potential of emergent China, India and competition in diverse regional markets. Patent expiry on drugs that generates strong income could be a threat

StrengthsGSK is ne of the top 5 largest pharmaceutical companies.

GSK is one of the worlds largest investor in R&D and UK Biggest private sector fund of R&D.

HAS a strength of over 97000 employee.

GSk is a global presence is in over 100 countries.

Robust sales growth forecast for launch portfolio

Industry-leading player with regard to implementation of life-cycle management strategies

Strong business fundamentals and robust balance sheet

Demonstrated ability to drive cost eliminationWeaknessesFailure of R&D pipeline to deliver initial commercial expectation.

Controversies regarding issue of safety of drug effects companys image.

Patent expiry for a number of bulk buster products.

A conglomerate of relatively independent companies. Sometimes they can go off the reservation, such as what appears to have happened with McNeil Consumer Healthcare and the making of the children's medicine now being recalled.Several of its big drugs have lost or will soon lose patent protection.

Many of its products are commodities. For instance, other adhesive bandages exist, not just Band-Aid.

FINANCIAL POSITIONS Year on year GlaxoSmithKline Pakistan Ltd grew revenues 10.51% from 25.23bn to 27.88bn while net income improved 58.82% from 1.06bn to 1.69bnIncome statement in PKRREVENUE

NET INCOME

In 2013, cash reserves at GlaxoSmithKline Pakistan Ltd fell by 218.48m. However, the company earned 1.06bn from its operations for a Cash Flow Margin of 4.19%. In addition the company used 285.20m on investing activities and also paid 989.81m in financing cash flows.Cash flow in PKR

CASH FLOW

CASHProfit and Loss Accountfor the year ended December 31, 2013Horizontal Analysis20132012Differences% in ChangeNet sales25,230,87823,149,9642080914 8.99%Cost of sales(19,007,165)(17,104,983)(1902182)11.12%Gross profit6223,7136,044,981178732 2.96%Selling, marketing and distribution expenses(3,635,914)-3028364(607550)20.06%Administrative expenses (920,396) (784,866)(135530)17.27%Other operating expenses(153230)(192,617)39387 -20.45%Other income454,916330,125124791 37.80%Operating profit1,969,089.2,369,259(400170)-16.89%Financial charges(159217)(47,512)(111705)235.11%Profit before taxation1,809,8722,321,747(511875)-22.05%Taxation(747609.)(995,243)247634 -24.88%Profit after taxation1,062,2631,326,504(264241)-19.92%The above analysis of income statement has been made for two years; the comparison is between 2013 and 2012. The above analysis shows that the net income has gone down in the year 2013 by 20% around as compared to 2012.The decrease was due to high financial charges. Good increase in sales in 2013 as compared to 2012.Sales increased by 9%,the increase in cost of goods sold was higher in 2013, 11% as compared to 2012, which converted the increase in sales in better net income. Balance SheetAs at December 31, 2013

The above analysis of Balance sheet has been made for two years; the comparison is between 2013 and 2012.The above analysis show that the total assets of 2013 is increased by 10.39%as compared to 2012.the increase of debt in 2013 is around 35.67%as compared to 2012.the company uses more debts in 213 as compare to 2012.increase in total assets, current assets increase by 16.43%in 2013.the equity of financing is decreased by -0.39%in 2013 ascompared to 2012 due to uses of reserves in balance sheetProfit and Loss Accountfor the year ended December 31, 2013Vertical Analysis2013%Change2012%ChangeNet sales 25,230,878 100.00%23,149,964100.00%Cost of sales 19,007,165 75.33%17,104,983 73.89%Gross profit 6,223,713 24.67%6,044,98126.11%Selling, marketing and distribution expenses 3,635,914 14.41%302836413.08%Administrative expenses 920,396 3.65%784866. 3.39%Other operating expenses 153,230 0.61%192,617 0.83%Other income 454,916 1.80%330,1251.43%Operating profit 1,969,089 7.80%2,369,259.10.23%Financial charges 159,217 0.63%47,512 0.21%Profit before taxation 1,809,872 7.17%2,321,74710.03%Taxation 747,609 2.96%995,243 4.30%Profit after taxation 1,062,263 4.21%1,326,5045.73%The above income statement shows the two years of analysis that has made for two year the comparison is between components of2013 and 2012 with their sales. The above income statement shows that the net income is decrease in 2014 by 1.52%as compare to 2012.the net income of 2013 is 4.21%and in 2012 of net income is 5.73%. The gross profitwas in 2013is24.67%and in 2012 was 26.11% .the income statement shows that the cost of goods sold was in 2013 is 75.33%and in 2012 was 73.89%.Balance SheetAs at December 31, 20132013%Change2012%ChangeNon-Current AssetsFixed assets 5,973,40433.30%5,814,50435.78%Intangible - goodwill 955,7425.33%955,7425.88%Long-term loans to employees 70,0790.39%81,9590.50%Long-term deposits16,8650.09%16,7610.10%Total Non-Current Assets7,016,09039.11%6,868,96642.27%Current AssetsStores and spares 156,5480.87%140,6910.87%Stock-in-trade 6,271,40534.96%5,080,22031.26%Trade debts 349,9501.95%350,3622.16%Loans and advances 248,4631.39%243,0701.50%Trade deposits and prepayments 118,5920.66%92,5420.57%Interest accrued9,7530.05%12,2050.08%Refunds due from government 46,9510.26%40,7590.25%Other receivables 392,2022.19%445,8722.74%Taxation - payments less provision1,231,5886.87%660,0924.06%Investments 224,2691.25%198,1181.22%Cash and bank balances 1,872,99910.44%2,117,62613.03%Total Current Assets10,922,72060.89%9,381,55757.73%TOTAL ASSETS17,938,810100.00%16,250,523100.00%33

The above analysis of Balance sheet has been made for two years; the comparison is between 2013 and 2012.The above analysis show that the total current assets was difference in two year 2013 and 2014 is 3.16.The noncurrent liability margin decreased by 0.47 in 2013.The shareholder equity margin increased by around 6.24%% as compare to 2012.The shareholder equity margin is 63.27%in 2014 and70.11%. Was in 2013.The increase is due to increase in share reserves of the company

Key External Factors Weight Rating Weighted Score OpportunitiesVarying benefits of merging with Wyeth .08 3.24Diversification of product offerings and make further inroads into emerging markets.08 1.08 Benefits of giving away Pfizers products to unemployed citizens .15 4.60Strategic placement: Bold and innovative alliances with natives of the emerging markets .15 4.60 ThreatsThe loss of jobs.083.24 Multiple and diverse regulatory environments to contend with from international and domestic. .06 2.12 Unexpected changes could yield unpredictable currency fluctuations .10 4.40High competition in all its business segments due to the presence of many players in the industry. .10 4.40United States drug market is growing similar to developing markets i.e. Venezuela. .063.18Industry Analysis: External Factor Evaluation (EFE) Matrix39Termination of its long-standing partnership .08 2.16 Decline in revenue sales .06 3.18Total1.00 3.2Internal Factor Evaluation (IFE) Matrix Key Internal FactorsWeight RatingWeighted Score Strengths Increase in size and cash flow0.0530.15 Product distinctive competencies0.06 3 0.18Distinct Research organizations0.0930.27Company structure0.2040.8 Patient and prescription assistance program0.1040.4

Weaknesses Increase in size0.0520.10

U.S. vs. International sales0.2010.20

Lacks Biologistics0.1020.20

Overreliance on single product (lipitor) 0.151 0.15

Total1.002.65

BCG Matrix:Cash cows: are units with high market shares in a slow-growing industry. As a leader in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate. Meaning, they generate more cash than they consume. These units are milked by extracting the profits and investing as little as possible.

Dogs: have a low market share and a low growth rate. It does not generate or consume large amount of cash but it is a cash trap due to the cash locked up in the less potential business.Question marks: it is characterized by rapid growth and therefore consumes high amount of cash. However, they have low market shares and do not generate much money, but it has the potential to gain higher market shares and become a star and finally a cash cow when they market grow slowStars: are units with a high market share in a fast growing industry, with the hope that the stars will eventually become cash cows if it is maintain in the category of leadership.GSK has high relative market share and high market growth rate along with good cash flow. This puts GSK under star category in BCG matrix. GSK has a product portfolio with a significant cash flow position this in turn has spurred on a meaningful gearing by GSK management. This puts the company firmly in a star performing position. With asset consolidation of $23.5bn USD over three years, the company is likely to attain double-digit earnings growth, with mid-digit growth in 2012 impacted by generic competition.Core ValuesINTEGRITYKeep Companys Interest above self. Acts in ethical manner. Promote ethical business environment. Take effective actions if observers unethical behavior or situation. Seen & known to be honest. Lives within means. Intellectually honest.

EXCELLENCEMakes positive contribution towards the achievement of SSGCs Vision. Strives for Continuous improvement. Respond effectively to customer needs. Takes timely & Quality decisions.

TEAMWORKBuilds strong relationships within across functions. Works well with all type of peoples and corporate with others. Solicits and share ideas/best practice with others. Supports the achievements of Company/team goals. Contributes to team effectiveness using peoples different skills and styles. Arrives at constructive solutions while maintaining positive working relationships. Demonstrates sensitivity. TRANSPARENCYPromotes open environment. Displays openness and consistency in applying policies & procedures. Respects dissent and resolves conflicts fairly.

CREATIVITYComes up with new ideas. Encourages innovation. Promotes modified approaches. Convert ideas into actions.

RESPONSIBILITY TO STAKEHOLDERSStays abreast of change in operating environment that impacts our business (i.e. markets, competitors, technology, customers, suppliers, employees, regulatory, political and public). Create solutions to make customer needs. Develops colleagues and team members to improve their skills and performance. Ensure optimum utilization of resources. Balances short term and long term priorities to maximize on results. Ensures compliance of law.PORTERS STRATEGIES:THE FIVE FORCES THAT SHAPE INDUSTRY COMPITITION

LONG TERM OBJECTIVE

- Grow a diversified global business - Deliver more products of value - Simplify GSKs operating model In a presentation to investors today, Andrew Witty, CEO GlaxoSmithKline, set out three new strategic priorities that aim to increase growth, reduce risk and improve GSKs long-term financial performance. Grow a diversified global business GSK will seek to generate future sales growth through supplementing strength in the core small-molecule pharmaceuticals business, with new investments in fast growing areas such as vaccines and consumer healthcare and new growth areas such as biopharmaceuticals, said Witty. At the same time, we are actively seeking to unlock the geographic potential of our different businesses, particularly in emerging economies. Long term objective The business is focused around the delivery of three strategic priorities which aim to Increase growth rate Reduce risk factor Improve our long-term financial performance. Deliver more products of value, and simplify the operating modelGSK creating a more balanced business and product portfolio, capable of delivering sustainable sales growth. Our business continues to change shape, we are transforming how we operate so that we can reduce complexity and become more efficientDeliver value products:Focusing on the best scienceFocus on research and developmentDiversifying the level of externalization in research to focus on disease area , where GSK believe the prospects for successful registration and launch of differentiated medicinesSimplifying the operating model:As GSK continue to change shape , so it is essential that reduce the complexities in operating model, improve efficiencies and reduce cost.Re-shape manufacturingChallenging and aspiring Mission:GSK has a challenging vision and mission is to improve the quality of human life by making people to do more feel better and live longer.Long term incentive plan:Long term incentive plan Awards are made to executives under the following long term incentive plan, i)Deferred annual bonus plan

ii)Performance share plan Explanation:

Deferred Annual bonus plan : The deferred annual bonus plan encourages long term share holding, discourages excessive risk taking and help focus on GSKS key strategic priorities.

Performances hare: the performance share plan ensure focus on the delivery of GSKS strategic priorities and long term shareholders returns relative to other pharmaceutical companies

Competitors:In the vast industrializing world , there is obviously room for business competition. Similarly , GSK has many competitors.The highly classified companies namely Novartis , Pharma , Abbott , Nutrilite , ParkeDavisetc , are all competitors of GSK.They also have a vast range of medical products and compete at a very critical state.

Why GSK?Customer feedback and statistical data says that as compared to other companies , 63% of people still recommend GSK products for use.

INTERNAL FACTORS

EXTERNALFACTORSStrength 1. Industry-leading player with regard to implementation of life-cycle management strategies.2. Strong R&D focus and exploring new markets3. GSK is a global presence is in over 100 countries4. Has a strength of over 97000 employees

Weakness1. Controversies regarding issue of safety of drugs affects companys image2. Patent expiry for a numberof bulk-buster products3.Controversies regarding issue of safety of drug effects companys image.4.Patent expiry for a number of bulk buster products.

Opportunity1.Strategic agreements with other pharmaceutical companies andorganizationstoboostits research.2. Increasing awareness about healthcare needs3. Increasing demand for quality healthcare solutions

OSStrong sales and marketing infrastructure and Strong R&D departments can provide the extra benefits to company from this GSK Future prices will help in providing to employees.

OWCompany has a chance to grow well cause of agreement with other pharmaceutical companies for the number of bulk buster products.Threats1.Risk of unsuccessful new Products2.Regulatory environment is becoming more & more stringent3.Economic slowdown in European markets

TSGSK Company has to increase the production to get as an edge in the pharama Industry to enjoy the economy of scaleTWGSK Company can overcome their internal and external weakness by hiring more educated and skilled management this step will also helpful in meeting with external and internal Threats.

53QSPMThe QSPM is designed to determine how feasible and attractive possible strategies are and to weight them against each other. It Co-insides with Internal and External Analysis as well as the SWOT Matrix.Strategic Alternatives12Utilize all aspects of strategic Acquisitions forBetter employee programs to heighten perceived For maximum expansion and diversificationValue of salary, benefits, and self recognitionKey External FactorsWeightASTASASTASOpportunities1. Increasing elderly population worldwide. 0.0320.06002. Strategic Acquisition0.0940.3620.183. Focusing on Research & Development for Chronic diseases vs. Acute diseases0.0740.2830.214. Driving out competitors with lower prices0.0300005. Potential drug revenues after a competitors patent expired.0.0320.06006. Penetration of Vaccine and Biologics for emerging international markets (Gardasil)0.0440.1620.087. Product Diversification through Acquisitions0.0740.2820.148. Diversification into biologics, diabetes, oncology, and infectious market segments0.0640.2420.129. Constant growth of pharmaceutical and Health Care Industry by 10%0.0820.1630.2410.Educate staff to promote loyalty through relationships from distribution channels0.070040.280054Threats001. Risk of expensive class action law suits0.060040.242. Loss of patent protection0.0810.08003. Tightening of FDA Regulatory Oversight0.0420.08004. Increased global competition0.0230.0620.045. Price of prescription drugs increase which is reducing Medicaid drug benefits0.0300006. Failure to identify risks due to lack of time & study of long-term effects0.0200007. Compete with smaller generic company along with other larger firms0.0330.0920.068. Expensive Research & Development costs0.0430.1210.049. Industry marked by rapid advances0.0330.0930.0910. Hard to forecast external factors0.080020.16Total10000Strengths001. Brand Image and Awareness 0.0530.1520.12. Merck Lobbies for healthcare reforms0.050010.053. Highest Profit Margin in the industry 0.080030.244. High volume of product approval by FDA0.0740.2810.075. Diversified Product Portfolio0.0740.2810.076. Knowledge of benefits and risks0.0630.1830.187. Sophisticated Online Search Tool (mercksource.com)0.0400008. IPhone application 0.0500009. Transparency0.0310.0320.0610. Expansion to developing countries (Access)0.07000000Weaknesses001. High Layoffs (Response to loss of revenues)0.030040.122. Vioxx - Product Liability ($750 million)0.080010.083. Highest R&D with historically increasing expenses0.0730.2130.214. Low innovation in response to weak economy0.0630.18005. High salary of skilled pharmaceutical representatives0.030040.126. Revenue drop at $347 million0.0230.0610.027. Weak core portfolio (Overly dependent on joint venture)0.0230.06008. Growth rate unstable (Hard to forecast future revenues)0.0710.07009. Aggressive marketing open to scrutiny by government agencies0.02000010. High institutional Ownership (IO)0.030000TOTAL13.623.2SWOT MatrixThe SWOT matrix puts together the internal and external audits to focus on each aspect and how they can influence new strategy. It can also be a helpful way of finding new ideas.A SWOT analysis should not only result in the identification of a corporations core competencies, but also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources.StrengthsWeaknesses1. Brand Image and Awareness 1. High Layoffs (Response to loss of revenues)2. Merck Lobbies for healthcare reforms2. Vioxx - Product Liability ($750 million)3. Highest Profit Margin in the industry 3. Highest R&D with historically increasing expenses4. High volume of product approval by FDA4. Low innovation in response to weak economy5. Diversified Product Portfolio5. High salary of skilled pharmaceutical representatives6. Knowledge of benefits and risks6. Revenue drop at $347 million7. Sophisticated Online Search Tool (mercksource.com)7. Weak core portfolio (Overly dependent on joint venture)8. IPhone application 8. Growth rate unstable (Hard to forecast future revenues)9. Transparency9. Aggressive marketing open to scrutiny by government agenciesExpansion to developing countries in an attempt to provide access10. High institutional Ownership (IO)OpportunitiesS-O StrategiesW-O Strategies1.Increasing elderly population worldwide. 1. Create product knowledge program geared towards older people who1. Higher staff salary to encourage learning and effectiveness2. Strategic Acquisition May not be a technology savvy as the average customer, also in different languages geared toward different cultures (W1, W5, W10, O10)3. Focusing on Research & Development for Chronic diseases vs. Acute diseases (S1, S2, S6, S7, S9, S10, O1, O6, O9)2. Human Resource restructure geared towards higher morale and loyalty4. Driving out competitors with lower prices 2. Utilize all acquired companies and their products to emerge in combined markets (W10, O10)5. Potential drug revenues after a competitors patent expired. (S5, S6, S7, S8, O2, O7, O10)6. Penetration of Vaccine and Biologics for emerging international markets (Gardasil)3. Make access problems known to public and set up convenient ways for people to donate7. Product Diversification through Acquisitions (S2, S3, S10, O1, O6)8. Diversification into biologics, diabetes, oncology, and infectious market segments4. Utilize Combined capacity to stay ahead of competition and exceed industry growth of 10%9. Constant growth of pharmaceutical and Health Care Industry by 10% (S5, O2, O8, O10)10.Educate staff to promote loyalty through relationships from distribution channels5. Utilize not only products and product knowledge/ Research to better both companies products. Combine research to make new products (S4, S5, O2, O3, O7, O10)ThreatsS-T StrategiesW-T Strategies1. Risk of expensive class action law suits 1. Focus research on stable Top sellers (Innovation)1. Form a layoff plan that will clearly show how employees to be layed off are 2. Loss of patent protection (S4, S9, T2, T7, T9, T10) Chosen (W1, W2, W5, W10, T1, T2)3. Tightening of FDA Regulatory Oversight2. Human resource restructure geared at providing more programs for employees 2. Increased research on growing epidemics and new illnesses4. Increased global competition And a better sense of team and belonging (W3, W6, W8, W9, T8, T9)5. Price of prescription drugs increase which is reducing Medicaid drug benefits(W1, W5, O9, O10)6. Failure to identify risks due to lack of time & study of long-term effects7. Compete with smaller generic company along with other larger firms8. Expensive Research & Development costs9. Industry marked by rapid advances10. Hard to forecast external factorsSPACE Matrix

The space Matrix gives us a clearer way to see which directions our strategy should be headed in based on where we are. It coincides with the above matrices and gives a sense of guidance.Financial Strength (FS)ScoreEnvironmental StabilityScoreReturn on Investment 7,808,400/47,195,700 = 16.54*Highest Profit Margin6Technological Changes-5Quick Ratio3Price Elasticity-4EPS4Competition-5Sales Growth1Barriers to Enter-1Average3.5Average-4Competitive AdvantageScoreIndustry StrengthScoreMarket Share-2Growth Potential5Product Quality-1Profit Potential3Brand Awareness-2R&D costs vs. Risk2Information-2Patent protection2Average-1.75Average32013%Change2012%Change

Share Capital and Reserves

Share capital 2,895,15616.14%2,631,96016.20%

Reserves 8,454,15747.13%8,761,47853.92%

Total Equity11,349,31363.27%11,393,43870.11%

Non-Current Liabilities

Staff retirement benefits 250,9771.40%175,2801.08%

Deferred taxation 612,0123.41%530,7503.27%

Total Non-Current862,9894.81%706,0304.34%

Current Liabilities

Trade and other payables 5,561,42931.00%3,950,33924.31%

Provisions 165,0790.92%200,7161.24%

Total Current5,726,50831.92%4,151,05525.54%

Total Liability6,589,49736.73%4,857,08529.89%

Contingencies and Commitment

TOTAL S H EQUITY17,938,810100.00%16250523100.00%