"It's important that we generate more growth with less risk." GSK needs to find new sources of growth at a time when governments around the world are reforming healthcare and cutting spending. It is also outsourcing more research to partners to reduce risk. Its long-running collaboration with the US company, Theravance which is responsible for one of GSK's most promising new drugs, the asthma treatment Relovair, which is now in late-stage development. GSK recently upped its stake in Theravance to 19% and this is likely to be the pattern for other collaboration deals 1.
GSK is currently pursuing strategies for growth and stability and shaping up the overall market position. To enable this market capturing, they are identifying and pursuing different strategies in different areas of business. In fact, GSK ‘s main strategy is to broaden and balance their portfolio, and move away from a reliance on 'white pills/western markets'. Sales generated from these markets and products have decreased from 40% in 2007, to 25% in 2010. Over time this should help to reduce the adverse impact of patent expirations on the Group. 2.
The most important area of focus is strengthening the core pharmaceutical business. Supplementing that will be increased investment in growth areas such as emerging markets, vaccines, Japan, dermatology and Consumer Healthcare. Out of this, the Consumer Health care sector needs more change in terms of R&D on a comparative basis. 3.
Resources for this strategy include infrastructure, finance, knowledge, R&D and sufficient efficient HR to support the strategy. ( Tables containing GSK’s R&D expenditure, Manpower count). Capabilities- GSK has had a reputed brand name and image. They have been the market leaders in the Pharmaceuticals sector for quite some time. Health care sector may be regarded as a sector that might go on to serve as a complementary service for the pharmaceutical sector. Creating complementary services will only help GSK create a more stronger base and might give them an edge over its competitors in the pharmaceutical sector 4.
One key focus of GSK – Japanese Market, is something distinctive of the organization. While the competitors have been concentrating on a broader market – a continent, or a particular segment, GSK has come up with the strategy of focusing on Japan and increasing its market share. Also, focusing on all the emerging sectors will help the organization grow with comparatively lesser risks. 5.
Focus varies according to the business segment and area of operation. In the pharmaceutical sector, the focus is on overall market position. However, in emerging sectors and in the Japanese market, strategies may be adopted to initially attract a niche segment and then with time and performance, move to have an overall market place. 6.
In developing economies like Africa, in their core business area – Pharmaceuticals, low cost model can be identified to some extent. But then, from an other angle, it can be identified that GSK is trying to adopt differentiated focus. With concentration on a particular economy (Japan) and emerging markets, they are trying to differentiate. Differentiation on the basis of operations of business segment and on the basis of R&D can also be observed. 7.
Management has been devising policies to Deliver more
products of value. Transforming R&D will ensure not only quick delivery of the current
pipeline but are also able to
sustain the flow of products for
years to come. The Management has decided to •
Focus on the best science
Diversify through externalisation
Focus on return on investment
8. Three strategic priorities
Since 2008, the company has focused their business around the delivery of three strategic priorities, which aim to increase growth, reduce risk and improve their long-term financial performance: Strategic priorities
• Grow a diversified global business – We are diversifying our business to create a...
Please join StudyMode to read the full document