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GlaxoSmithKline
By: Sasha Richardson, Serge Savasta, Kedar Iyer, Daniel Traylor, Philipp Haenle
Executive Overview
GSK - Worldwide GSK - France GSK - Products GSK - Clients Why France? GSK - Values Adaptation to France Constraints in France Key Benefits Essential Advice
GSK - Worldwide
GlaxoSmithKline (GSK) is a world leading research-based pharmaceutical company GSK R&D is based at 24 sites in 11 countries Headquartered in the UK
GSK - Worldwide
2004 Annual Results GSK worldwide:
- Sales of 20.3 billion - EBIT 6.1 billion ($11.1 billion) - Pharmaceutical turnover : 17 billion - Consumer healthcare turnover : 3.2 billion
100,000 employees worldwide 40,000 in sales/marketing 35,000 employees at 82 manufacturing sites in 37 countries 15,000 in R&D ( R&D budget ~ 2.8bn/$5bn)
GSK - France
Registered in May 2001 in Marly - le Roi
5650 employees in 4 production sites:
Evreux, (2 000 employees), Mayenne, Hrouville, Notre Dame de Bondeville, Ulis (main research site)
GSK - France
2004 Revenues 3.23m 2 main activities:
- GlaxoSmithKline Labs (account for 95 % of sales) - GSK Public Sector (5% of sales i.e non-prescription & OTC)
315,6 million Units produced for over 100 countries 65% of French production output for export
GSK - Products
GSK is a leader in four major therapeutic areas-antiinfectives, central nervous system (CNS), respiratory and gastro-intestinal/metabolic.
Anti-malaria
Anti-thrombolytics Anti-viral Cardiovascular Dermatological Gastro-intestinal
Oral Anti-diabetics
Respiratory Rhinitis/anti-allergy Smoking Cessation Urology Vaccines
GSK - Clients
Who are GSKs clients? GSK's clients are Patients. However, as selling/advertising directly to customers is prohibited in France, GSKs customers are the doctors who write prescriptions. Based on demand created by prescriptions, GSK sells through two primary distribution channels, wholesalers & retailers (pharmacies) How does a presence in France help or hurt the company's ability to satisfy client demands? France is the largest market in Europe, so GSKs presence in France is imperative French made is perceived as high quality
Why France?
The pharmaceutical industry is global A must to be present in the largest European
market in order to maintain competitive in the pharmaceutical industry
GSK - Values
Performance with Integrity Core Values:
Transparency Innovation Partnership with all stakeholders Be reactive/responsive in order to bring new
medicines to the patient
GSK - Values
and their fit to the French Culture
French value system:
Few hurdles with respect to people management. Broad talent pool of highly skilled engineers and upper level managers (excellent
engineers, scientists, researchers make France a great fit for an R&D based industry).
Middle management is the weak link in the French labor market. Struggle to recruit star international candidates. Paris is not seen as a location
with high growth opportunities to build a career.
Constraints in France
Cumbersome to acquire work papers for international transfers from non-EU states. Social security and firing costs in France are higher in Europe, but the high quality human resource pool largely makes up for the social costs. GSK, a global enterprise, established a work force based primarily on the French labor pool, thus communication problems never existed; top executives and many other managers speak fluent English. GSK France operates as a subsidiary to GSK Worldwide, allowing for some degree of autonomy in operations; this approach also nullifies French management integration issues.
Key Benefits
What are the key benefits of being in France?
Product quality: high quality manufacturing facilities built and operated by leading French managers, engineers, and laborers; GSK positively reinforces its brand by employing a French labor force. France provides the largest revenue/profit center in Europe; margins are consistent with company standards. Location benefits: most employees are hired locally; living in France is prerequisite for much of the work force. Social security costs are relatively high, however the associated costs are negligible when compared with the revenues generated in the French market. Market growth and penetration come with innovation which are linked to R&D expenditures; market structure and competitive advantage are based on scientific breakthrough and government approvals.
Assess the available market share: French market is the largest pharma market in European. Entry in the market requires a pharmaceutical company to set up a large subsidiary in France. Without prospects for significant market share, market entry must be re-thought. Clearly identify the employment rules and fiscal policy constraints: Entry in the French market needs substantial capital expenditures, including set up and approval costs uncommon in neighboring European states.
Relationships with labor officials and medicine regulators is critical (Scurit Sociale, Ministre de la Sant, Authorisation de Mise sur le March, etc.) French market entry is aided by job creation, corporate headquarters, production facility development, and R&D research programs. Maintaining a healthy working relationship with the authorities is absolutely necessary since regulatory authorities control the medicine market, advertisement & pricing policy.
Maximize efforts on R&D: France produces highly talented researchers that aid innovation necessary for growth. The pharmaceutical industry is about R&D. In addition, performing R&D in France means investing in French knowledge. This facilitates the establishment and maintenance of cooperative relationships with health authorities. Size manufacturing based on a hub strategy for Europe. France is nearly the largest market in Europe (in under 3 years, according to recent studies). Manufacturing products in France enhances quality standards. However, a close look must be taken at the potential to use French manufacturing facilities as hubs for Europe and Africa for example.
Invest in Eastern European countries, like Poland, for manufacturing may costs savings become key in this extremely profitable industry; manufacturing could be re-located to countries within Europe with lower cost of living.
We Thank
Mr. Patrice BRIOL, HR Director (Corporate and Scientific HR)
pxb0131@gsk.com, +33 1 39 17 80 28
Our Team
Sasha Richardson, sasha.richardson@mailhec.net Serge Savasta serge.savasta@mailhec.net Daniel Traylor daniel.traylor@mailhec.net Kedar Iyer kedar.iyer@mailhec.net Philipp Haenle philipp.haenle@mailhec.net