Individual report

Course: Ba Business Studies

Module title: Global Strategic
Management
Student id: 214984
Student Name: Simonyak Gheorghe

University off Suffolk

Date off submission: 07.07.2023

I declare that this assignment it’s all off my work and I have acknowledged all materials from
the published or unpublished work off the other people. all reference has been duly cited.
Table off content

1. Introduction
2. Background of this organization and
particular critical incidents
3. The implementation challenges in the
global market
4. The key strategy decisions
5. Recommendations to organization to
overcome the challenges
6. Conclusion
7. Reference list
Introduction
The company is present in more than 110 countries, where millions of registered patients
use the company's medicines and offers all over the world. This very large size of these
pharmaceutical companies (like AstraZeneca) but also the increasing technological
complexity and the processes involved in daily operations presenting many organizational
and managerial challenges.
Regarding AstraZeneca, focusing on the global strategy on sustainable and efficient
business, the main factor being the current distribution system being extremely expensive
but also complex due to the large scale of operations and the way it is operated. The
objective of this report is to analyse the effectiveness of AstraZeneca's global business
strategy regarding the company's sustainability, trying to identify the existing managerial
challenges as well as the possible solutions for them. The business model and the current
supply chain of the company are two very important functions in the business on which the
sustainability analysis of AstraZeneca's global business strategy will be based.
AstraZeneca plc. is a multinational company specialized in the production of pharmaceutical
and biotechnological products based in Cambridge, England. The company was founded in
1999, being a merger between Astra AB based in Sweden and Zeneca Group based in Great
Britain and, as of 2020, having approximately 80,000
employees globally. The company has a portfolio in the production of drugs for major
diseases such as oncology, respiratory, inflammation and neuroscience.
Since the 1991s, AstraZeneca Inc. knowing an exponential increase in the production costs
of new drugs on the market. The management of the company started looking for strategic
partners, believing that AstraZeneca also needs an international platform for the future. In a
very short period, the company managed to become a huge conglomerate emerging as one
of the leaders of the pharmaceutical industry at the global level. According to Mordock
(2016), based on mergers and acquisitions, AstraZeneca evolved quite quickly from a mid-
level company located in Sweden, becoming one of the 4 largest pharmaceutical companies
in the entire world. From that period when it was based on initial growth, the company
adopting mergers and acquisitions as preferred methods of growth and also of infiltrating
new world markets.

Background of this organization and particular

critical incidents
Mainly there are 3 big flows that are included in Porter's generic strategy that are often
used by multinational companies like AstraZeneca to be able to meet their growth
objectives.
Leadership cost
A strategy to manage costs usually involves obtaining competitive advantages by reducing
costs. Cost management is AstraZeneca's main business strategy used in various consumer
markets.
The main objective of using this strategy is to maintain the leading position in the market
using the effective management of value chains
This strategy allows AstraZeneca to expand its market share by targeting the middle classes,
represented by the vast majority of consumers on the market throughout the country.
These middle-class consumers give particular importance to the price, and driving the costs
is the best strategy for satisfying the segment's needs of consumers respectively.
AstraZeneca focuses on the accessibility and easy accessibility of its own products on the
world map, this leads to high brand awareness and increased sales, providing a strong basis
for a competitive advantage.
In addition to charging low prices by reducing production costs and maximizing the
efficiency of the supply chain, AstraZeneca frequently offers discounts and coupons to
achieve sales targets and face pressures from its biggest rival. the desired result of these
promotional campaigns and discounts is to increase the popularity of the brand by
encouraging consumption.
The discussions about the cost management strategies in AstraZeneca highlighting the many
benefits offered by this generic strategy, some of them being: quick brand recognition,
expanding the clientele, encouraging consumption but also achieving the desired sales, and
emphasizing the affordability and affordability of the product. The analysis of AstraZeneca's
advantage strategy highlighting cost leadership as the main strategy, the company also used
a differentiation strategy at the same time as cost leadership, laying the foundations for very
sustainable competitive advantages in a very competitive global consumer market.
Differentiation

Differentiation being another generic strategy was frequently used to obtain competitive
advantages. AstraZeneca had used the combined differentiation but the cost leadership
strategy in trying to achieve the objectives of growth.
Adopting differentiation as a generic strategy allows AstraZeneca to expand its customer
base using the unique characteristics of the product sold.
AstraZeneca's strategic objective for this strategy is to incorporate innovation and address
the growing health concerns of customers. An example is that AstraZeneca extinguishing
production lines after studying the changing interests of consumers in order to achieve
differentiation in front of the competition by expanding the scope of opportunities in the
industry. The combination of the two helps the company to build a loyal and strong
customer base.
Through this generic differentiation strategy, AstraZeneca can position its product offerings
in such a way that they are highlighted and very different from the other alternatives on the
market. Existing as an experienced brand with a very strong support point, the company
uses differentiation as a tool to reduce pressure from other brands. The big investments in
marketing and advertising are made to make the difference between AstraZeneca and other
brands on the market.
A vast experience, a strong presence on the market and a long-standing brand are among
the factors that differentiate the company in the marketing and communication strategies in
the company.
Apart from this, the brand logo is also used to stabilize the bases of differentiation. this
being giving a strong image to the consumer's thinking. Although the brand has gone
through numerous changes, the essence remains the same, it also serves as a strong
differentiating factor.
Focus strategy

This third generic competitive strategy encourages the company to concentrate resources in
expanding the narrow segments that are targeted. In the moment when a company adopts
a focus strategy, it often serves a specific market segment based on competitive advantage
on niche marketing.
AstraZeneca adopting a strategy of focusing both on low costs and on offering the best
price. This strategy of low-cost focus being adopted by serving the needs of those niche
segments of the market at the lowest possible price. while this strategy of focusing on the
best value is adopted, the emphasis being placed on taste, size, but also the specific design
of the product, which is the most appropriate to the requirements and needs of the
consumers.
Having a focus on the attributes of the AstraZeneca product, revising its branding strategy
and bringing continuous changes to product designs and packaging in order to meet the
psychological expectations of consumers in order to achieve a maximization in the quality-
price ratio.

The implementation challenges in the global

market
While some of the problems the company is facing are from its own management strategy,
one of the main challenges is that of responsiveness while trying to expand in some foreign
countries. The ever-increasing competition is forcing the company to reconsider its internal
approaches. to the target market and to start thinking about venturing into new areas while
trying to promote the products. However, the company faces challenges that arise from
customer loyalty to their attitude toward the products. Sun (2013) explains that many
clients prefer to buy medicines from suppliers at home rather than those supplied by
AstraZeneca. This preoccupation is similar to what other multinationals face at a global
level, as they also witness negative attitudes after venturing into some foreign nations.
Many of the countries that are intended prefer the use of medicines that are not of Western
origin. Such moves carry out the intentions and plans of the AstraZeneca company to be
able to become a leader in the supply of medicines to people around the world.
Another problem that led to the complication of the challenges faced by the company in
foreign countries is the diplomatic relations in that country. Even if these disharmonies are
not so pronounced, they considerably influence people's buying behaviour. This includes
some Islamic countries that have a negative attitude towards medicines that come from
European countries or even from North America. Cultural and religious differences are often
the main factors that complicate the obvious negative relations between these countries
(Górak-Sosnowska 2016). Because of these bad relations, countries like India and Cuba
prefer to use drugs manufactured in their own country than those of foreign origin. These
challenges continue to affect companies like AstraZeneca, which faces high-level
competition in the country of origin but also in some destinations favourable to them. One
of the examples that shows the severity of the very weak diplomatic relations of companies
like AstraZeneca is the disharmony that has decreased the desire of Chinese citizens to buy
medicines from Europe and the United States. As a result, complicates and hinders the
company's ability to venture into new destinations.
Some of the strategies that are vital in which the company can take a minimization of the
challenge it faces can include reducing external operations and focusing on studying the
market. These being very useful if the company is trying to surpass its competition and
regain its declining dominance in those markets. Already the firm has begun to divest some
of its properties in regions such as the United States. The move is aimed at addressing the
challenge and reducing the growing losses incurred by the firm. Mordock (2016) explains
that the company sold its Delaware headquarters for $50 million in 2017 and its molecular
antibiotics business in 2016 to Pfizer for $1.6 billion. Some of these strategies may help the
company in supporting operations in an attempt to surpass the competition. Also, the
dismissal of employees is another practical approach that this pharmaceutical company uses
to be able to face the current challenges.
Another solution that can help the AstraZeneca company to face the challenges is careful
market analysis. Having a broad analysis of the industry, the company is able to design
projects that lead to the introduction of new medicines and at the same time to be able to
face the high competition brought by rival companies as well as genetic development.
Overreliance on drugs such as Crestor and Nexium is some of the problems that have
plunged the company into its current crisis (Sun 2015). As such, the pharmaceutical
organization must look at the changes in the market and develop products on time and
according to customer expectations. Recently, some of its drugs have enjoyed a positive
reception in the market and it implies that with the right initiatives, the enterprise can
address its challenges.

The key strategy decisions

Also, by improving some chances to increase the value, by filtering vast universes of
potential opportunities to collaborate, it is also essential. Through these, the company's
development team uses a process of elimination, that of taking over only the opportunities
that have high scores on the scientific, financial and cultural criteria. Through these
processes, they try to avoid the erosion of company values seen through a mismatch of
scientific visions, values organizational but also of the decision-making process among
potential partners.
Simply put, good offers lead to the creation of good values for all parties involved. but this
simple statement usually masks a considerably greater complexity. The definition of values
is different between the parties of the group interested on both sides of the tables, which
can lead to some unexpected incentives. the alignment is very high when two similar
companies come together in the project, an example is when AstraZeneca and Merck
collaborated in equal parameters in 2017 for the development and marketing of Olaparib. In
the present case, the companies on each side of the table focus mainly on innovations for
patients, using in a unique combination the original capabilities but also common portfolios.
Today, a wrong alignment of incentives can conclude transactions between very established
pharmaceutical companies, but also on biotechnological innovators, with unprecedented
access to capital. In the last decade, the risk capital of investments in oncological
biotechnology increasing considerably from 900 million in 2011 reaching up to 42 billion in
2021, there is no doubt that these increased investments will not be beneficial to patients.
Because the investment capital grew faster than the company formation rate, they are
currently much better financed than in previous years. A consequence is that the trust in
pharmaceutical partners in non-dilutive capital and those of partnership for a longer term
being in some cases replaced by the focus on the return offered by investors on
pharmaceutical acquisitions that usually appear at the beginning of the life cycle of these
biotechnological companies. Current market conditions lead more and more to a more
important assurance that potential biotech partners must share a common understanding
on creating new medicines for patients requiring long-term thinking.
AstraZeneca having an experience of partnering with biotechnological companies of the last
minute, being focused on a longer term, sharing similar ideas. Some of the new
collaborations that have been announced are with Harbor BioMed, Scorpion Therapeutics,
Fusion Pharmaceuticals and Accent Therapeutics. Analyzing each case in particular, these
biotechnological partnerships bringing a set of highly specialized capabilities being
concentrated but at the same time allowing the respective companies to expand their
efforts to research and develop new areas of oncological therapeutic discovery through a
partnership with a biopharmaceutical company with global coverage. For its part, the
AstraZeneca company offers innovative biotechnological companies all the clinical
development and marketing capabilities necessary to deliver medicines to patients.
In the industry where following trends is a safe bet for company development teams,
AstraZeneca succeeding in repeatedly surpassing itself, managing to find new opportunities
before they become obvious, also taking intelligent risks to enter unexploited territories by
other companies in the same field.
Such deals with Merck and Daiichi Sankyo demonstrate AstraZeneca's willingness to look for
value in unconventional places, bringing outdated transaction structures back to market.
The operating principle of the AstraZeneca company is the following: How to ensure that
each collaboration yields more than the sum of each company's parts, especially considering
the complexity but also the costs associated with each development program. Taking into
account the biotechnological evaluations that are foamier limiting the financial activities on
the actionable opportunities. Also, the ability of the AstraZeneca company to be able to find
some ways to add potential values to medicines in some non-conventional places has
proven invaluable in recent years, being also a rather rich field for research and
development as a leader in the pharmaceutical industry.

Recommendations to organization to overcome

the challenges
The strategy that is recommended by AstraZeneca is to increase the production capacity,
being the best move, because this will lead to the products being able to reach a larger
number of customers. With this, there will be no complaints about the lack of the product
or not being able to reach the specific areas of the same market. In the moment in which
the production capacity is higher and also having a higher consumption, it shows that the
company had an increase in profit margins, thus the company being able to invest more in
terms of technology but also in research and development. Some of the failures that are
associated with an increased production may include the overwork of workers that leads to
physical fatigue and may cause some unwanted accidents. It can also lead to a decrease in
customer orders or the appearance of problems in the production plan leading to a big
mess.
This research and development strategy that is recommended to the AstraZeneca company
in order to be able to identify some new markets and new consumer segments to market
their products is critical. At the moment when it carries out detailed market research, the
company is capable of identifying gaps, trends, but also market culture and consumer
behaviour before introducing a new product on the market. This thorough research will help
the company to be able to identify the products that can be sold on a certain market but
also the products that should be withdrawn from that market. Some of these disadvantages
of this market research and development is the fact that they are too expensive but also
need a lot of time. Also, customer behaviour and trends change irregularly, which makes
most of the research that is carried out no longer useful in a very short time, although a lot
of funds will be used for this research.
Another strategy that is recommended to the AstraZeneca company is to make a change to
the products, this being critical because it focuses on meeting the requirements of the
customers, thus leading to an increase in sales but also in the profit margins of the
company. This leads to the modification of some characteristics of the products, improving
them thus obtaining a better experience, allowing the pharmaceutical companies to keep
the edge in this industry.
But all this can also bring some unpleasantness to the customers, as they are not pleasantly
surprised by the changes made. The costs of these changes being lost, leading to a decrease
in certain products, reducing sales margins.
In this case, diversification takes place when a company decides to engage in the production
of new products after having succeeded in identifying new markets. Some more detailed
research will be carried out on the development but also to be able to identify some gaps
that may appear regarding the products that will be introduced. This diversification allows
AstraZeneca to remain a very competitive and innovative relevant company in the
pharmaceutical industry, bringing a wide range of products within its portfolio. Thus forming
a considerable number of additional clients in this base. The problem associated with this
strategy is that the company could have carried out some superficial research about the
new markets, entering the wrong market with some wrong products, suffering some big
losses as a result.

Conclusions
Most of the challenges and strategic problems that these pharmaceutical companies can
face is the fact that this industry is always going through structural changes. Some of these
strategy options for companies are contained in a large set of factors. Regarding the
territory of Sweden, the most important consequence is to choose an appropriate location,
succeeding in creating a vast network of access to knowledge, incorporated in universities,
some company’s biotechnology but also other pharmaceutical companies. Industry
conditions – which especially include the high costs associated with good development, but
especially the marketing of treatments, but also an increased impact of general medicines
regarding the expiration of the licenses held, forcing AstraZeneca to give priority to efficient
operations, just as all the other pharmaceutical companies do. this concept also introduces
the great diversity of the labour forces with which the company has to fight, of its general
planning adapted to the great variety of employees, some of the cultural and educational
differences, but also the work experience and individual skills. That is why the company
placing an emphasis significantly on the implementation of its strategy on the well-being of
the workforce.
In conclusion, it can be stated that AstraZeneca succeeds in acquiring major opportunities
for improvement, but it has a bad reputation, and a great lack of strong structures are some
of the key areas that lead to the blocking of growth. Like a good strategic analysis report, it
greatly simplifies the general discussions by simply recommending some of the steps that
the company should follow in order to have an additional improvement. It can also be
stated that together with these presented approaches are some of the potential approaches
that the company can use to have a good subsequent growth.

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