SWOT analysis - GlaxoSmithKline's Retaliation Against Cross-Border Sales of Prescription Drugs - Case Study Example

Topic: Strengths Company size GlaxoSmithKline is a major producer of the drugs that are sold over the world. The size of the company accorded the company a lot of bargaining power when it came to the pricing of the products that it sold. The size of the company also makes it possible for the management to commit more money that they make in the research and development of new drugs. This enabled the company to come up with the right drugs that would later attain the blockbuster sales volumes (Turner 1-250).

The size of GlaxoSmithKline increased after the acquisition of SmithKline. The economies of scale paired with the merger made it possible for the company to establish a presence in the American market, a feat that the company had been trying to attain all along. Public Trust The company enjoyed a lot of trust from the member of the public owing to its success in the other markets. Prior to joining the American market, the company was doing well in the European market whereby it had commanded a lot of respect and trust from the members of the public as well as the physicians that wrote the company the prescriptions.

The trust that the people accorded the company seemed to spill over when the company moved to the United States (Turner 1-250). This trusts enabled the company to gain the immediate acceptance from the American people as opposed to smaller companies that did not have any presence in the pharmaceutical production history. Clear Strategy GlaxoSmithKline was attaining the maturity stage in the production of prescription drugs. The maturity of the market that the company served meant that the company would be facing the threat of a decline as it is the norm in the product cycles.

In order to curb this eventuality, the company sought a new market that would help it offset the poor performance in the European market that was shrouded with competition and rigidity. The option that the company had in the attainment of the move was to change its focus from the European market in the American market which was less fierce in terms of the competition. Investments In Research And Development The company sought to ensure that it looked into ways of developing new drugs. It puts most of its finances in catering for the prescription drugs that would hopefully attain the blockbuster status.

The focus of the research and development was well distributed, but there was a particular inclination towards the production of drugs that would cater for the chronic illnesses such as diabetes, osteoporosis and cancer (Turner 1-250). The focus on the chronic illnesses was attributed to their ability to sustain demand for drugs. Good Corporate Image The company had all along been able to maintain a favorable image among the consumers. It had partnered with the united nation in the fight against HIV in the less developed parts of the world more so in the sub-Saharan Africa.

The acts of charity that it engaged in made it have a humane image etched in the minds of the people. Weaknesses Cutting the supply of prescription drugs in Canada The main weakness of the company was the choice to limit the prescription drug supply to Canada. This decision was controversial since it made the company look like it was more focused on the profits. Leveraging On The United States Lack Of Regulation In The United States. The other weakness for the company was the use of the lack of regulation on the prices of the drugs in the United States as a means of supporting sales in other parts of the world.

Poor Response To The Retaliation The company retaliated in a poor manner to the practice of purchasing drugs from Canadian pharmacists. It would have sustained the discount card system instead of introducing the system and latter withdrawing it. Opportunities Low Governmental Regulations Compared to the other markets that the company was servicing, the American market was the least regulated. This aspect of the American market called made it possible for the company to come up with the approaches to pricing that would be largely ineffective in the other parts of the developed world (Turner 1-250).

The company leveraged on the above element to earn supernormal profits. Large Consumer Base The baby boomers formed the majority of the American population at the time of when GlaxoSmithKline entered the American market. The ageing of the population has been a major opportunity for the company for the majority of the aged need frequent and often costly medical attention. The company could attribute the success of the blockbuster drugs to this demographic aspect. The company was able to curve out a niche in the old people who would later form the main client base for the people Threats Boycotting of GlaxoSmithKline products The company’s action saw the majority of the elderly shift from the consumption of the drugs.

They opted to look for new products that would suit their budgetary constraints. New Competition The new generic drug manufacturers now had a chance of eating into the market share that was previously under the control of the company. The problems facing the company as far as the purchase of the prescription drugs from online Canadian pharmacists was concerned was a potential opportunity for the rest of the generic drug manufacturers. The manufacturers would end up promoting their drugs as the next best alternative for the clients that could not afford to buy the prescription drugs from the American pharmacists.

Strategy The company had to look into ways of retaining its relevance in the market even after the decision to limit the use of prescription drugs sourced from Canada. Redemption of the image of the company was possible only in the event that it gave discounts to the pensioners that needed the drugs for the maintenance of the chronic illnesses. The company had to ensure that it liaised with the Medicare and other insurance provider in the private sector to come up with a means of providing the subsidized drugs.

When supplying the drugs to the pharmacists in the United States, the company could offer them at the prices mentioned in the discount cards. This would result in a decline in the prices of the drugs across the board by the same margin. Reduction of the margin would lead to the affordability of the drugs to any shopper that would be purchasing them out of the pocket. The second step in the strategy is to liaise with the medical insurance providers, private or otherwise, in the provision of affordable care.

The insurance providers would be able to provide the prescription drugs to their members. Works cited Turner, Tyya N. Vault Guide To The Top Pharmaceuticals And Biotech Employers. 1st ed. New York: Vault, Inc., 2005. Print.