SWOT Analysis Glaxo welcome:

Strengths :
 High level of expertise: GW has high level of expertise investment in technology to
automate the chemistry of developing drugs.
 Huge demand on their skin disease treatments and asthma medicines: GW’s Asthma
and skin disease medicines has huge demand in the markets.
 Largest manufacturer of asthma and HIV/AIDS drugs.
 Strong R&D Facility: The company had R&D facilities in Hertfordshire, Kent, London
and Verona (Italy), and manufacturing plants in Scotland and the north of England. It had
R&D centers in the US and Japan, and production facilities in the US, Europe and the Far
East.
 Strong global presence: Glaxo Wellcome has a strong global presence with only 44.7%
of total sales derived from the US in 1998.
 World's best-selling drug, Zantac: Glaxo wellcome is the maker of the world's best-
selling drug, the ulcer treatment Zantac.

Weakness:
 Lose the patent protection: They Lost their patent protection on Zantac because of US
govt rules as well as they can’t bare the high patent renewable cost in that time.
 Limited market share: High competition from local as well as multinational
pharmaceutical companies limits market share for GW doesn’t allow rapid growth.
 Negative campaigning: AIDS healthcare foundation had challenged GW over pricing of
its drug for AIDS, which keep the drugs out of reach of many in need. This brought a
negative publicity for GW in that time.

Opportunities:
 Strategic Expansion: GW was founded in 1995, when HIV/AIDS was at its peak, and
they had the potential to build their company since they were the first to develop a very
effective AIDS medicine.

Threats:
 Competition: Increasing competition from low-cost generic alternatives.
 Uncertain outcome from R&D: While formulating a drug, there is a significant risk of
an unpredictable consequence, which is detrimental to R&D workers and the
environment. Disposal of these drugs is also a burden for the organisation.
.
  New Entrants: New entrants in the Pharmaceutical companies can also be a threat to
Glaxo welcome
 Price caps on drugs: The prices of medicines are governed by legislation in several
countries. A new cost reform bill has been proposed that may push down costs of certain
generic drugs.

SWOT Analysis Smithkline Beecham (SB):

Strengths:
 Diversified product portfolio: Its products include Seroxat/Paxil (for the treatment of
depression and anxiety), Augmentin (an antibiotic), Nicorette (an anti-smoking product),
Panadol (pain relief)
 Highly skilled R&D Dept: They have the high level of expertise in their R&D
Department and also they are the World's biggest research and development
Organisations before the merger with GW.

Weakness:
 Huge dependence on R&D: In earlier they are highly dependent on R&D if there is any
poor performance or poor outcomes in R&D they will effected very badly.
 Not prescribed: Doctor does not prescribe their products.
 Limited market share: High competition from local as well as multinational
pharmaceutical companies limits market share for SB doesn’t allow rapid growth

Opportunities:
 Acquisitions: Strategic acquisitions and partnership has proven to be successful. SB is
attributed to organic expansion. Acquisitions and alliances enable SB to grow and raise
its market share.
 Expansion: In the past, SB has been expanding its business through initiatives such as
investments, partnerships and acquisitions in the international market.
 Threats:
 Growing Competition in generic market: There are many players in the
Pharmaceutical industry especially generic medicine manufacturers. The rivalry in the
industry is quite high and results in a “market war.”
 High R&D Cost: because of high dependence on R&D it cost is increases.
 Stringent patent regulations: Patent protection for pharmaceutical products is not
easily granted at that time under US law. They also have products for the treatment of
depression and anxiety, as well as pain relief, for which patent rights are difficult to
obtain.

SWOT Analysis GlaxoSmithKline (GSK)

1. Strengths
 
 Strong Research and Development:
GSK has made a strong effort in research and development. They have made progress in
respiratory, HIV, and cardiovascular medicines. Due to its technology-driven practises there is
an advancement in the role of the organization. It helps to strengthen their market position.

 Efficient sales and distribution network:

GlaxoSmithKline has improved its distribution network in India and around the globe as well.
Due to their improved distribution network, there is an availability of products everywhere. This
increases sales and brand recognition. They can provide new products as well as a proper and
improved network of distribution.

 Global presence:
GlaxoSmithKline operates in different countries, reducing the risk of over-dependence on few
markets and getting the market share. GlaxoSmithKline is a renowned company all over the
globe.

 Customer relationships:
  GlaxoSmithKline maintains customer relationship management, which can achieve a high
degree of customer loyalty with current customers and potential customers. Maintaining good
relations with customers increases brand image and brand loyalty. 

 Training and development:

GSK spends a huge amount on the training and development of staff. It requires highly trained
workers. The company spends huge funds on training and career growth which effectively turns
 into an asset for the company.  Highly skilled employees will always strive to achieve more and
make profits for the company. 

 Newmarket performance:
GSK has gained and has been flourishing in the new market.  The extension has been helpful for
the company to develop additional income sources and diversify the impact of the economic
cycle in the countries in which it works.

 
2. Weaknesses
The company has its weakness where we need to understand how the company works to set it
right so let’s know the company’s analysis in its weaker’s side and deep dive to the segments for
further clarification. 
 
 Healthcare frauds and allegations:
GSK has been alleged for unlawful practices such as promoting prescription drugs, false pricing
charges, misleading sales charges and failure of disclosing safety information in certain
countries.
For example, charges in the US for endorsing antidepressants that have not been approved by the
FDA. Due to such instances, brand image can be adversely affected. 

 Generic competition and maturity of flagship drugs:

Multiple GSK products and vaccines are exposed to the competitive markets from generic
medicines to flagship drugs. This affects the sales of GSK.

 Bad Product demand forecasting:

GSK is poor in forecasting the product demand. They are leading to a higher rate of missing
opportunities to their competitors. One of the reasons why the day’s inventory is very high
compared to its competitors. GlaxoSmithKline keeps their inventory very high both In house and
channels. They are not good at forecasting their product demand. 

 
3. Opportunities
 
 Growth by acquisition and collaboration:
In recent years, GSK has expanded its portfolio inorganically through acquisitions and
collaboration. Acquisitions and collaboration help GSK to expand its growth and increase in
market share. 
For example, the collaboration with ViiV, GSK’s HIV specialist company collaborated in 2016
with Pfizer and Shionogi and the acquisition of GlycoVaxyn in 2015. Such Acquisition and
collaboration help the company to reach greater heights and capture the market. 

 New product launch:

 Recently, GlaxoSmithKline has launched various new products in the metabolic and respiratory
business. Launching Nucala as a treatment for refractory eosinophilic asthma patients in adults is
a prime example. By such product launches, the portfolio of the company strengthens and
improves brand image.

 Increasing Demand and Quality Healthcare:

The increasing demand in India and other emerging nations and awareness of quality healthcare
has given opportunities for the companies like GlaxoSmithKline to improve and strengthen their
bottom line and a top line of their product line. These days, people are more concerned with their
health and the healthcare products or medicines they use. The organization must maintain quality
in their healthcare product. 

 New technology:
The new technology will help GSK company to practise different pricing strategies in the new
market. This will enable the organization to maintain loyal customers with great service and lure
new customers through other value oriented services. Since it’s a pharmaceutical company the
organization must shortly adapt and be updated with new technology. By adopting new
technology, it will help the organization to be in a competitive market. 

 Increase Opportunities in the vaccine industry:

Since the core business of GlaxoSmithKline is pharmaceuticals, GSK has the opportunity to
grow its market in the field of developing vaccines for contagious diseases. This will increase
their market share and trust among customers for the brand. 

 
4. Threats
 
 Intense competition:
GlaxoSmithKline deals with consumer and pharmaceuticals products as well so this creates
intense competition between other brands which not only limits market share but gives rise to
price wars. 
E.g Pfizer and warner

 Government Regulations:
In the pharmaceuticals industry, there is a lot of interference from the Government. Government
regulations can affect the production and sales of GlaxoSmithKline and it is a major threat to the
company. There are different laws practised in different countries and GSK have to look after the
laws of each country and then practise their production. 

 Price controls:
In many countries, pricing is selected by the laws of their countries. For example, in India, a new
pricing management strategy has been proposed under which drug prices may decrease. Due to
which Gsk has to follow the price rate fixed by the country
Financial synergy:
The merger was expected to generate substantial Financial and operational synergies..
 It was expected that £250 million ($415 million) of these savings would be derived from
combining the two research and development (R&D) organisations and would be
reinvested in R&D.
 The other cost savings of £750 million ($1.2 billion) were expected to come from
reducing the overlap in administration, selling and marketing and manufacturing
facilities.
 A group with combined sales from continuing businesses of approximately £15.0 billion
($24.9 billion), and an estimated 7.3 per cent share of the global pharmaceutical market
 A powerful R&D capability combining both companies' expertise and technology with
an annual R&D budget of approximately £2.4 billion ($4.0 billion)
 An enhanced platform to discover and develop new medicines more effectively and
efficiently
 One of the most extensive development pipelines in the pharmaceutical industry, with a
total of 30 new chemical entities (NCEs) and 19 vaccines in clinical development (phase
II / III), of 35 which 13 NCEs and 10 vaccines were in late-stage development (phase III)
 A market leader in four of the five largest therapeutic categories in the pharmaceutical
industry: anti-infectives, Central Nervous System, respiratory and alimentary and
metabolic; a leading position in the vaccines market and a strong position in consumer
healthcare and over-the-counter medicines
 An industry-leading sales and marketing force of approximately 40,000 employees
globally, including over 7,200 sales representatives in the US, providing Glaxo
SmithKline with global marketing strength
 £1.0 billion ($1.7 billion) in annual pre-tax cost savings from the third anniversary of
completion of their merger.
 A truly global organisation with wide geographic spread and strong presence in the
important US market