Strategy management for Glaxo Smith Kline

INTRODUCTION:

GlaxoSmithKline, a very well known global corporation in the United States [its base] and in the UK [its headquarters] is targeting towards a successful expansion goal .GlaxoSmithKline started the mission — to the improvement of human life by making people feel better, live a longer life and do much more than they did. And this is executed through their different planning and programs related to further development and research. It laid its foundation late back in 1715, under the name of Plough Court Pharmacy in London, which gradually got transformed itself into a global presence with the help of powerful strategic actions over years, presenting us —- GlaxoSmithKline.

ABOUT:

The Burroughs Wellcome and Company laid its foundation in London in 1880 with the help of American pharmacists Henry Wellcome and Silas Burroughs. The Welcome Tropical Research Laboratories was first founded in the 1904.Wellcome company bought McDougall, Robertson and cooper Inc in 1959, which opened doors towards animal health. In 1970, the company production centre was shifted from New York to North Carolina and a new research centre was built the very next year. In the year 1904, Glaxo was settled in Bunnythorpe in the Manawatu-Wanganui region of New Zealand’s North Island. Originally it dealt with the processing and manufacturing of milk into food for infants under its name. Glaxo turned into Glaxo Laboratories with a further new centre in London [1935]. During 1947 and 1958, it bought two more companies, namely Joseph Nathan and Allex & Hanburys. It played a major role during 1978 after it bought, Meyer Laboratory. To keep up to its market presence, it further merged with Burroughs Wellcome in 1995 to become GlaxoWellcome.

In the year 1842, Thomas Beecham, brought out an innovation, his Beecham’s pill laxatives giving birth to Beecham group of companies in England. It opened its first production house in Lancashire in England for better production in the year 1859. In the year 1843, John Smith founded his first pharmaceutical company in Philadelphia. On 1865, Mahlon Kline also joined in business which is known as Smith Kline & Company after 10 years of his joining. Further in 1989 Beecham merged with SmithKline and the Smith Kline Beecham plc. was formed. Finally in the year 2000, Glaxo Wellcome and Smith Kline Beecham came together to form – Glaxo Smith Kline.

The main purpose behind the merger of the given companies was the Research and Development (R&D). To guarantee that the new company accomplished this in 2001, the company rearranged its research and development structures into the Centers of excellence for Drug Development (CEDD), a more précised business that focused on flexibility, innovation and therapies. Since the merger it became the leading innovating pharmaceutical company in development and distribution. For example, GlaxoSmithKline has made a significant work to give HIV/AIDS drugs in developing countries at significant price reductions. Since the first merger GlaxoSmithKline has developed in the success of creating vaccines for Pandemic flu and made many other treatments available at low prices for the poorer sections of the market. GlaxoSmithKline not only helped in curing the most deadly diseases as recommended by WHO, but also produced vaccines that treated asthma, viruses, infections, mental health, diabetes and digestive conditions.

IMPORTANCE OF STRATEGY MANAGEMENT:

An organization or a firm may take up new technology in two different but most important ways:

[a] Internally

[b] Externally

The organization works according to the former through research and developed while according to the later the body works through purchasing the technology. Every activity has to benefits and drawbacks and each needs different skills. GlaxoSmithKline is an inspiration to view how successfully it works using internally innovation strategy. The firm needs to grow in internal innovation through research in the most dreadful diseases identified by the World Health Organization —- HIV/AIDS, tuberculosis, and malaria.

Strategy Management is a part and parcel of every organization as it helps in the process of sustenance and progress of the firm. It is true to say according to various researches and observation studies that to achieve a specific goal one has to maintain a system of its process or movement. Only with a systematic process one can achieve its goal with any hurdle, on time with most desired profit. If a firm maintains its own R&D, then with suitable conditions it tends to achieve more profit, though depending on many other conditions.

Strategy Management however varies from company to company, depending on requirements of organizations, customer’s need, economic condition of the market, etc. How to make a strategy of a company lies on factors like which types of customers are available in the market, their economic conditions, what are their need, etc. To make profitable business one needs to plan out the working of their employees. For example, if a customer earns more so he is expected to spend on good quality health products and would not opt for cheaper ones. They preferred the quality of the product. Thus it is essential to survey about the customers and their needs to their comfort.

Since there are multiple ways of deciding strategy, it should be ideal for any organization to evolve multiple strategies, analyze those and to choose those the best among those strategies. An organization having optional strategies is more customers friendly and helps the company to work accordingly in different situations. Keeping a bit of flexibility makes it easy for firms to solve mere issues accordingly for customers, by making small changes and differences in strategy where required.

Every company should have all the knowledge regarding its competitors and other bigger companies. One should have clear knowledge regarding its opponent’s strategy also. If one has enough information about the whereabouts and systems of other companies then it helps in competing at the same level.

KINDS OF STRATEGIES THAT COULD BE ADOPTED:

Outsourcing non-core activities for keeping the size of establishment at low or comfortable level. It is essential for a company to look to what is leading to more profitability with proper production and good quality. For example if in a leather house core material is leather, other accessories like ribbon, laces, metal hooks ,etc. can be produced and bought from foreign body making things more convenient with better profits. As for pharmacy if few components are imported from other factories the cost is cut down as the core company does not need to take any liabilities for more workers needed for production of non- core components. Thus the price and the expenditure of the company both come down.

Strategy on man power. It is a vital point to make strategy of a company. The criteria that should be focused while choosing employees of a company should be according to the needs of the organization. Like for a pharmaceutical company like GlaxoSmithKline, people should have prior knowledge of medicines, chemistry, energetic young individuals for well progress of the company.

Strategy on the production. It is also a very important factor that helps in the progress of the company. The raw material plays a vital role in making strategy of production. Where to be marketed and which deal comes out to be best, etc. One can have their own production house which save money in transportation and handling charges or can even purchase from outside sources, that leads to lessening of liability costing of workers needed for the processing part. Rather it can also have a mix of both own production house as well as purchase from other sources.

Strategy lies greatly on finance also. One company should have a good knowledge of from where capital should be taken, on what conditions and interest money to be taken, etc. other factors that truly take part in managing strategy of a company are external factors, flexibility, and customer.

The location of a company also adds to the factor of strategy management.

The location, facilities to the employees or team members, their accommodation, recreation, social life, need for health facilities, education and family life, etc. If an employee is happy then he is more concentrated on work that helps them to give their best which helps the company to touch perfection.

Man vs. Machine is another important factor and at last comes the factor to publicize the product.

GlaxoSmithKline Analysis:

GlaxoSmithKline brings up its strategies by maximum employment around 99,000 people in all over 100 countries. Around 15 percent of the workers work directly under the research group for discoveries. They make researches on approximately 65 million compounds per annum for the production of new medicines to find ways to cure the deadly diseases concerned. GlaxoSmithKline had committed to prevent is mentioned in the fact of their supply 25% of the world’s vaccines. The company desires to develop in internal innovation through research in three most dreadful diseases as identified by the World Health Organization (WHO), namely – HIV/AIDS, tuberculosis and malaria.

The strategies adopted by the company, GlaxoSmithKline talks about three main things: Growth of diversified global business. Deliver the best in greater number. Simplification of operating model. At the present time, GlaxoSmithKline performs tasks like distribution of more than 30 doses of vaccine, every second of every minute all over the world. Doctors write more than 1000 prescriptions (GlaxoSmithKline) medications every minute in an hour. GlaxoSmithKline spends more than $500,000 in their research work in every hour on a single day. Other than medications it also produces consumer brands like Gaviscon, Horlicks, Panadol, Turns, Aqua Fresh, Reuben, Nicorette and Sensodyne.

The GlaxoSmithKline internal research and development efforts made up the base to the variety of products and its special ways for distribution of medicines to the poorest of countries. To balance and maintain the given words the company spends more than 10% of its income on the work of discoveries and development in 2008. They have also focused on the research and development structure that may help in future production of vaccines, pharmaceuticals and healthcare. The drawback that is faced by the pharmaceutical companies is patent expiration. Though they have taken appropriate measures to solve such problems by concentrating more on R&D structure. It lowers the effect on the portfolio of the drugs because the income of the company would not depend on one or more major successes. It also focuses mainly on delivering the best science. In the year 2008, the company introduced nearly 75% of new product that had entirely new compounds. Innovation and quality are the main priorities of the company. Its focuses mainly on therapies like biopharmaceuticals, immune-inflammation, infectious diseases, metabolic pathways, oncology, respiratory, neuroscience and ophthalmology. To maintain the relation between the areas the company created 70 Discovery Performance Units (DPUs) in 2008. Basically these units remain inside the firm but there are exceptions where they are outside the firm. Coming up of different new drugs suggest us the success of the company.

GlaxoSmithKline is such a company that besides hiring the workers for research work and development of new products, they also encourage the spirit of innovation which is very essential. For such a purpose they do need infrastructure that would support the spirit of innovation. In the year 2008, the company created DPUs within the Centers of Excellence for Drug Discoveries (CEDD). The teams consisted of a multi optional workers like scientists, marketing specialists and others related to the key domains who worked on the project regarding innovation. For much better innovations and progress it encourages cross-fertilization of ideas between its own scientists. The company has all kids of policies that helped innovation. GlaxoSmithKline produces more ideas and products that can help during any given period of time.

CONCLUSION:

GlaxoSmithKline, as studied in the given case study suggests that it is a company that believes in progress for betterment. The company keeps on researching till date and helps the discovery of new vaccines and medicines for deadly diseases. The company also encourages innovation, and focuses on continuous researches to fulfil the market need and also keeping in mind all the categories of market all over the world, irrespective of high and low economic conditions.

CITATION REFERENCE:

Us.gsk.com- GlaxoSmithKline US

www.gsk-ch.in – GlaxoSmithKline consumer health care (e-journal)

www.fiercepharma.com- supplementary journal

the journal of biological chemistry- journal

www.nature.com

Book on strategy management by Garth Saloner, Andrea Shepard and Joel Podolny

Six Stigma- www.sixsig.info

Global strategy, marketing- www.thinkingmanagers.com