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Click to add t

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Transcript of Click to add t

Profit and Loss Statement
PESTLE
Political - Economical - Social - Technological - Legal - Environmental

Aspects of a business and the sector which its competing in

Useful for furture planning - making predictions and long term trending as well as a risk assessment for the company in the market

Provides a "big picture"
Porter's Five Forces
Structures a broad analysis of the industry

Useful for new companies, entrepreneurs looking to see where they can profit
SWOT
Strengths, Weaknesses, Opportunities and Threats

Analysis to find strengths and weaknesses of a company

See where they are vulnerable and where they can improve

Useful for decision making and strategic planning
Minimal threat from new entrants
Very high cost of entry
Patent laws
Customer loyalty
Threat of New Entrants
Threat of substitutes
Rivalry amongst Existing Companies
Highly competitive market
Branding differentiation
Ribena, Lucozade, Horlicks
Product differentiation
Chinese medicine using western scientific approach
Race to get patent protection
Buyer Power
Consumers hold significant power
Consumer Healthcare products
Easy to switch

Vaccines and pharmaceuticals
Price control by government
Supplier Power
Companies which provide raw materials
Significant supplier power
Ability to withhold supplies
Hard to find substitutes for most of the raw materials
Exception of small companies
Rise of alternative medicine such as naturopathy and traditional chinese medicine

Other pharmaceutical companies may have similar drugs, i.e. Painkillers

Generic products
STRENGTHS
WEAKNESSES
Opportunities
THREATS
Legal
World's sixth largest pharmaceutical company with strong global presence and diversified risks.
High market position and large market share.
Largest turnover in the year 2011 as compared to its competitors.
Established track record of product development.
Large highly skilled staff of over 97000 employees.
Economical
World's sixth-largest pharmaceutical company
Total assets:32.86% ( £41,349,115,000)

Heavily invests in research and development
£3.5 billion in R&D

Shift of focus towards EMAP
Growth of 14.7% from 2011 to 21.7% of the world pharmaceutical market
Patent expiry for a number of bulk-buster products.
Inconsistency of attractive promotions.
High dependency on several products.
Finding new drugs.
Rising healthcare needs of BRICS nations.
Acquiring other drug development companies.
Developing vaccines for persistent diseases.
Entry into antibiotics segment of market.
Economic crisis in Europe.
Regulatory environment is becoming more and more stringent.
Political pressure.
Investing so much into R&D may backfire if new products are unsuccessful.
References: FAME, GSK Annual Report 2012, Telegraph.co.uk
GSK has a long history of run-ins with the law, with accusations ranging from bribery to collusion and even fraud.
Paying the largest fine of £3 billion

On-going investigation by the Chinese police regarding bribery of doctors to increase sales of GSK’s drugs
Sales decreased by 61% in the third quarter

Patent laws
It is estimated that £35 billion in sales were lost as products lost patent protection and experienced competition from generics.
References:http://www.bbc.co.uk/news/world-us-canada-18673220
GSK Annual Report 2012
Social
United Nation’s 2010 revision to its population projections, world population will peak at 10.1 billion in 2100 compared with 7 billion in 2011.

An increase in the proportion of population aged 60 or over.
Aging population
Succumb to diseases easier due to a weaker body and immune system.

Greater demand for drugs in order to combat the diseases, increase in revenue for pharmaceutical companies.

References:http://www.un.org/esa/population/publications/worldageing19502050/pdf/90chapteriv.pdf
Technological
Heavily invests in R&D
£3.5 billion in R&D
GSK launches $50M fund to invest in pioneering bioelectronics technology

Constantly buys other companies
Increase technological potential
GlaxoSmithKline to fully acquire Cellzome for £61 million

Environmental
Carbon neutral by 2050

Specialist chemistry unit which they hope will aid research into greener, more environmentally friendly, chemical processing.

14% reduction in water consumption
9% reduction in total waste
7% increase in carbon footprint

References:http://www.gsk.com/explore-gsk/our-planet/green-chemistry.html
GSK Annual Report 2012
References:http://medcitynews.com/2013/08/gsk-launches-50m-fund-to-invest-in-pioneering-bioelectronics-technology/
GSK announced that it would invest $800 million to build a biopharmaceutical manufacturing facility in UK following the announcement by the government.
This is to capitalise on the 14% reduction in corporate taxes .
Government pressure GSK to cut prices
In Europe, governments have cut medicine prices by 7% over the quarter, after an unprecedented 8% fall in the second quarter.
Political
References:http://online.wsj.com/news/articles/SB10001424052702304724404577296892725890780
http://www.telegraph.co.uk/finance/jobs/9646589/GSK-to-review-European-operations-amid-sales-fall.html
Overall GSK is still in a good market position, given that its brand recognition, company size and customer base.

Decreasing turnover and profits, however it has late stage products in its R&D pipeline that will contribute to profits when it reaches the market.

Legal issues in china weighing down sales figures in emerging markets

Should maintain resources in R&D to ensure patents for the company
Conclusion
Restructure its marketing strategies to minimize losses in developed countries

Limit the damage to its brand from legal matters by being more transparent

Lower prices and commit resources to help set up healthcare infrastructure in developing countries to gain a better reputation and customer loyalty in the long term

Commit more resources to other BRICS countries and less to China

Expand their business to encompass alternative medicine to take advantage of the growing trends of a 'natural' and healthy lifestyle
Recommendations
References: http://www.gsk-china.com/english/html/research-development/collaborations-in-china.html
References:http://rudar.ruc.dk/bitstream/1800/9473/1/GlaxoSmithKline%20%26%20the%20shifting%20from%20Patented%20to%20Generic%20Drugs.pdf
References:http://www.cwru.edu/med/epidbio/mphp439/complimentary_meds.pdf
References:http://www.businessweek.com/articles/2013-01-24/a-new-glaxosmithkline-formula-pay-suppliers-later
References:http://www.telegraph.co.uk/finance/newsbysector/epic/gsk/9426226/GlaxoSmithKline-hurt-by-European-price-cuts.html
Group Members
Lee Shyh Horng Mak Weiyang

Prabhjot Singh Bhatia Majed Saiepour
REFERENCES: 1. https://fame2.bvdep.com/version-2013116/Report.serv?_CID=79&context=3EZ69HKUJA3XY19&SeqNr=0
2. http://www.ukessays.com/essays/marketing/analysis-of-pharmaceutical-company-glaxosmithkline-marketing-essay.php.
REFERENCES: 1. http://writepass.com/journal/2012/10/strategic-and-swot-analysis-of-glaxosmithkline-gsk-plc/
2. http://www.hays.com/media-centre/news/life-sciences/drugs-off-patent-series–glaxosmithklines-advair/index.htm
3. GSK Annual report 2008

REFERENCES: 1. http://www.slideshare.net/taufeeqahmedkhan/gsk-by-taufeeq-ahmed
2. http://www.theglobalist.com/big-pharma-expands-into-emerging-markets/
REFERENCES: 1.http://www.chinadaily.com.cn/business/2013-07/26/content_16835893.htm
2. www.mbaskool.com/brandguide/pharmaceuticals-and-healthcare/2620-glaxosmithkline-pharmaceuticals-ltd.html.
Financial Analysis
Balance sheet
Ratios
Cashflow Statement
Balance Sheet
Ratios
Cashflow Statement
Profit and Loss Statement
Liquidity ratio is low 0.7 - 1

Liquidity= (current assets - stock) / Current liabilities

Current assets decreasing while liabilities constant
Extremely High Gearing - Increased potential for risky investments
increasing returns on shareholders funds
whereas Astrazenica decreasing
Glaxosmithkline
Astrazenica
Full transcript