Introduction
The assignment is focused on launching an already existing UK company known as GlaxoSmithKline in a new market environment. The country that has been selected is New Zealand where the company wants to expand its territories to sell their products. GlaxoSmithKline is a well-known MNC pharmaceutical company in UK. The company has a good opportunity to expand its business and reach out to more consumers throughout the world by making health care easily available for all. Moreover this would also allow them to increase their sales along with diversification. The micro environment of the location is done along with Porter’s diamond model analysis for the chosen location. A brief strategic model for entering into the New Zealand market is mentioned followed by suitable recommendations and finally ending with a conclusion.
Company Information
GlaxoSmithKline (GSK) is among the largest companies of the world, they are well known for their researched based work on pharmaceutical industries, in new discoveries, manufacturing, developments and markets. The company has its amin headquarters in UK and is present in more than 160 countries in the world at current date. The main markets of the company are USA, Germany, France, Italy, UK and Japan. The company holds the employment of approximately 103,000 people from the world. According to reports the estimated sales of the company is about $21,441 with an operating income of $6,920 and net profit worth $4,765.
As GSK is mainly a pharmaceutical company it deals with consumer health care. The most selling GSK product is Seretide for asthma. Apart from that GSK has wide variety of products which it has been planning to launch in various developing countries across the world. The company also takes their corporate social responsibilities seriously. CSK follows a comprehensive and proactive approach towards CSR. The company is highly transparent when it comes to CSR and has their own policies and Government structure to the approach.
Justification of rational Expansion of the company and introduction of chosen location
The company is planning to expand its territorial boarders globally to reach out to many more countries in the world globally. By 1999, the company has sharpened the focus mainly on the pharmaceutical and consumer health products establishing new clinical laboratories and diversified pharmaceutical services. Here it is believed that promotion is an essential component, and hence if there is demand in the international market for pharmaceutical products the company must reach out to those countries. Expansion of a company has several advantages along with better opportunities in the growth of market and diversification.
The possible strategic choices that is available to the company for international expansion is Global strategy. GSK being one of the largest pharmaceutical companies in the world has thought of formal plan of expanding its territories and operate in numerous countries of the world.
The location that has been chosen for the company to expand is New Zealand. It would be a good chance for the GSK firm to establish new territories and reach more of the consumers in countries like New Zealand and increase the sale margin of the company as well.
SWOT on GlaxoSmithKline
GSK at the recent days are looking forward of expanding their products and investing in research and development work of the same.
Strengths of GSK
Strong R&D portfolio expansion
The main strength of the company lies on the fact that it has invested a lot of time and money in developing a strong research and development team for the company. The company was able to progress in fields of respiratory, cardiovascular and HIV related researches to name a few, and launched the suitable medicines to treat these diseases. GSK has always been committed to its technologies that have given rise to innovation and competitive strength in market positioning.
Strong Global Presence
GSK products at current date is available in more than 100 countries all over the world which has reduce the risk of depending on only few options of market I pharmaceutical departments.
Strong sale and distribution network
GSK pharmaceuticals was able to establish a strong sales and distributary network not only in UK but all in all major countries of the world and now is targeting to enter the markets of New Zealand for further expansion. A strong distributary channel has always made sure that the distribution and availability of the product is maintained everywhere.
GSK-Novartis JV
Navaritis in the year 2015 has announced a healthcare and consumer joint venture in vaccines, this has not only helped the pharmaceutical giant but also helped in penetrating and introducing new products in the share markets.
Weaknesses of GSK
Healthcare fraud has affected the brand image
GSK in some of the countries are accused for having unlawful promoted prescription, false charges of pricing and failure in proving safety data. For example the charges that were made for the promotion of antidepressant in the markets of US which was not given permission by FDA.
High quality products are exposed in generic competition and are reaching maturity
Multiple products of GSK like the vaccines has now been exposed to competition and some of its block buster products are also reaching maturity, thus can affect the sales of GSK in future days.
Opportunity of GSK
Expansion through Acquisition and Collaboration
GSK has been expanding the portfolio of its products inorganically from the earlier days. For example the collaboration of ViiV of GSK (HIV specialist) with Pfizer and Shionogi in 2016 is a great example. This kind of accusation and collaboration has helped the country in expanding the product portfolio as also market share.
Increase demand and awareness in quality health care
The increase in the demand of quality health care in New Zealand and other developing nation has given a opportunity to this pharmaceutical industry to improve the bottom line as well as the top line.
Product launches Strengthen business
GSK was able to launch different products in respiratory and metabolic businesses currently. Hence this kinds of new launches help in enhancing the portfolio of the company and strengthen the business.