Gsk Plans Growth In Emerging Markets Business Essay

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There are many types of organisations all over the world at the time being. They were developed during the history of mankind as a necessity of survival at the very beginning and lately as a start up of a profit. In the moment of speaking organisations are so highly involved in the everyday life of the human being, that in a worst scenario of disappearing them the humankind will need to invent them again and again, because they are a necessity of existence.

According to the principle of existence we may say that organizations these days are separated in two categories. So we can mention the organizations belonging to the public sector meanwhile there are organizations belonging to the private sector.

Task 1:a Examine the various types of organisations and their purposes and compare the missions,goals,and strategic objectives of your chosen organisation with a similar organisation.

GlaxoSmithKline, PLC

One of the world biggest pharmaceutical organization is GlaxoSmithKline plc. The organization is not only pharmaceutical but healthcare products are also in the first line of sales with other healthcare companies of itself.Vaccines,developing new drug substances with production facilities in Europe,Northern America,Asia. (GSK) was formed in December 2000 by the merger of "Glaxo Wellcome" and "SmithKline Beecham" and the main offices are situated in London possessing more than over 100 facilities and branches all over the world. Apart from pharmaceutical products and vaccines, health-and sanitary items are also manufactured and sold in over 140 countries. (Annual Report, 2007, p.4) GSK employs over 103,000 people around the world in 117 countries. In 2007, women "accounted for 24 per cent of senior managers and 37 per cent of all managers" while "minorities made up 19.1 per cent of employees in the UK workforce". (Corporate Responsibility Report, 2007, p.100).Research is the key base for the organization because most part of the investments of GSK goes in this domain, spending almost 13 million pounds every day. The money on research is spending mainly due to the fact of the widespread diseases mostly in the countries with no facilities or access to medicines. (Annual Report, 2007, p.16).That is why because of its large size the organization in 2010 the total revenue generated was over 28 billion and the profit after taxes was over 1.8 billion.

Business Segments

GlaxoSmithKline develops almost a quarter of the world wide vaccines, also prescription products, prescription medication which can be included in many different therapeutic categories.Cardiovascularity,respiratory,nervous system and many others.The dominancy of GSK is on the vaccines market even if in the year 2009 more than 80% of revenue came from the sales of prescription medication. Pharmaceutical (GBP 23.4 Billion) 

According to American Health Department in U.S there are more than 20 million people suffering from Chronic Obstructive Pulmonary Disease (COPD).Fighting with such diseases and others similar like asthma the organization GSK came on the market with a product which is approved to treat such diseases which also acts as anti-inflammatory and bronchodilator. It's name is Seretide/Advair (GBP 55.1 Billion)

It is to be noticed that one of the major investments of GlaxoSmithKline is the research of vaccines and the anti-virals.The outcome is to treat a wide range of ailments and various childhood diseases. In 2009, GSK received a significant boost in orders for its Pandemrix™ H1N1 vaccine, following the global outbreak. Anti-Virals (GBP 1.1 billion) Vaccines (GBP 4.3 Billion) 

GlaxoSmithKline is very well known also for its nutritional supliments,oral care products and gastro-intestinal ailments. Aquafresh,Sensodyne,Nicorette,Tums and Citrucel are well known all over the world. Improving people's health care is also one of GSK work and consideration. Consumer Health Care (GBP 5 Billion) 

GlaxoSmithKline invests a lot in research and development. Researching is not a easy task because in order to have positive results takes time. Thus from the moment of the concept to get in the market takes anywhere from 10 to 15 years. Also finding the proper drugs for the demand of the market it is extremely expensive and most of the time quiet risky. Nevertheless some drugs and medication do not submit or pass the clinical trial of the phase development. That is why the product who gets in the final and passes all the tests is protected under patent for a maximum amount of 10 years. Being an extremely large organization GSK opens a multiple pipelines or potential products. Probably most of them will fail but the turnover or the possibility of even one to become a blockbuster(with sales annually of over 1 billion dollars) it makes worth the initial investment. Research and Development (GBP 4.46 Billion)

GSK plans growth in emerging markets

GSK plans for the future by 2020 year is to capitalize on emerging markets which from one side is to get more deals on vaccines through contracts approved by the government. Therefore GlaxoSmithKline aggressiveness on the emerging markets is very well known. The reason is because Asia, Latin America, Mid-East and Africa are potential studied with success for expanded its branded generic's business. Because competition on the market is rough, competitors are playing aggressively also. Among GSK competitors are to be named Pfizer, Novartis, Sanofi Aventis. This makes GlaxoSmithKline to look forward and getting businesses from Eli Lilly and UCB Pharma ,also trying to establish deals with India's organization such as Dr. Reddy's Lab and Africa's Aspen Pharmacare.

1.2 Vision & Mission

Many organizations have developed during the years of existence on the market a vision and a mission in order to fulfill their targets.It is GlaxoSmithKline vision to become the leader in the pharmaceutical industry "by helping people do more, feel better and live longer". A company's mission can be defined as "the overriding purpose in line with the values or expectations of stakeholders" (Johnson & Scholes, 2005, p.13).Therefore GSK bases for long term strategy in obtaining the profit and the growth on the market are following these objectives:

•Achieving the highest excellence in the commercial premises and operational ones by succeeding in building the best product pipeline inside the pharmaceutical industry

•Access improving to medicines for those categories of people who can not afford medical assistance

•Consideration in taking business decision regarding the ethics, the social, the safety and the environmental concerning issues

•Prioritizing the protection of its employees by enhancing the highest health of these all over the world, persisting in becoming a recognized leader and getting the sustainable business success

Task 1 b: Explain how stakeholders influence organizational missions and goals and discuss how and to what extent your chosen organization (responsibilities) meets stakeholder expectations.

2. Stakeholders

2.1 Stakeholder Theory

Figure 1

Any individual or individuals,groups who have an interest in the objectives of a business in fulfilling the goal inside of an organization.

Freeman defined stakeholder as "any group or individual who can affect or is affected by the accomplishment of that organization's goals." (Freemann, 1984, p: 48) Harrison & St. John mentioned the fact that the more improved the management of the stakeholders is, the better innovations will come, the less boycotts and strikes will appear.On the other side and contrasting with the stakeholders, the shareholders are centering the valuable principle of the needs and expectations of an organization. Another specialist in domain, Ward mentions that stakeholders are divided in 2 different very powerful groups with the ability to influence the business strategy.

stakeholders, adopted from Ward, 1992

Figure 2

2.2 Stakeholders of GSK

GSK recognizes the fact that being so various the organization stakeholders various interests and expectations are to be achieved even if the main goal is common. That is why" "shareholders, patients, governments, nongovernmental organizations, payers and employees but also the "scientific community and healthcare professionals and providers" are mentioned. (Annual Report, 2007, p.4 & 14). In contrast to Ward, GSK does not mention its suppliers as stakeholders.

In GlaxoSmithKline case the stakeholders can be divided in two parts: primary stakeholders and secondary ones. For the first type the stakeholders are:






Health insurance providers

Keeping a good relationship with the stakeholders, engaging them in conducting market research as a third parties in order to understand what are the needs of the patients. Also discussions groups with different stakeholders, let them to be involved in community projects in special open days, meetings with different multilateral organizations as well as NGOs, feedback after finished workshops.(Corporate Responsibility Report,2007, p.8)

One of the most controversial BBC broadcast in November 2004 was about non tested drugs on HIV. The report was putting in the center of attention the GlaxoSmithKlein organization who tested the drugs on children in their homes in New York. To prove the commitment of transparency GSK started to publish their research results and data on the web, thus becoming the first pharmaceutical company presenting their clinical trials online.

Task 2: a Explain the nature of UK economic system and how it affects business organization such as yours

The UK economic system according to the World Bank is considered " Ease of Doing Business " being ranked as second place in the EU and on the 7-th on the world scale. Also UK is considered as the second largest exporter, not at least the first having the European headquarters of major companies, that is why for the businesses the access to the international markets is rewardable. Open markets matter to the UK because exports of goods and services account for 19% of UK GDP. For Consumers-Free trade means more competition, which leads to better quality and lower prices.

 Glaxo's chief executive, Andrew Witty, reiterated that 2013 year government's patent box made UK more attractive because this will offer lower rates of corporation tax on profits most probably generated from research and development department. Brentford, west London where there are about 16,000 employees of GSK in Britain from a total 98,000 worldwide workforce.