Reference no: EM133100102

Explain in depth how each of the following internal and external factors would affect Glaxo SmithKline.  Please quote your reference

External factors

Political factors. Most countries maintain frameworks that include guidelines about safety standards and certifications. They also mark the banned drugs, which may cause health hazards. If a pharmaceutical company fails to follow those regulations, its business may suffer severely. Administrations of most countries try to gain control over the price of the drug to make it affordable for people. It may toll on the growth of pharmaceutical companies. In addition to that, governments of some countries subsidize the pharmaceutical companies to keep the essential drugs within the commoners' reach. It helps the companies to survive in the competitive market.

Legal Factors. As pharmaceutical products are one of the essential ones, the government always uses laws to control the fraud regarding the expiration dates and manufacturing of the batch of drugs. If a company fails to adhere to the set guidelines, it may have to face legal proceedings. Pharmaceutical companies should maintain strict legal guidelines while formulating the framework for their business and researches. They ensure the safety of the products. It helps them to avoid legal issues. Thus, allowing them to stay away from the high expenses of proceedings.

Environmental Factors. Environment is a significant concern, and the impact of waste materials on the environment has worried the environmentalists. As the production of drugs is related to a large carbon footprint, many countries are coming up with regulations to decrease the effect on the environment. As abiding by these regulations may be costly for the new companies, they may fail to establish their business.

Economic Factors. The economy of any direct impacts the businesses. The pharmaceutical industry like GSK is also affected when the economic conditions of a country get affected. As the economic conditions of the countries are developing with time, the household income of people is also increasing. It may allow them some essential drugs. They may have the urge to buy costlier drugs, which were previously out of reach for many people.

Internal Factors

Materials and Methods. Including new types of products and expanding the range must be considered. With a constantly evolving market and the appearance of new types of products, it is important to respond in time, correctly evaluate, and possibly introduce new products to the market, if they are cost-effective

Availability of direct long-term contracts with domestic producers.  It allows purchasing domestic drugs directly from producers, bypassing the extra links of the distribution chain. As a result, a competitive price can be offered in the market, and the maximum benefit from the sale can be obtained.

High growth of the pharmaceutical market. The pharmaceutical market is a dynamically developing sector of the global economy. According to the data of the Monthly Retail Audit of the Russian Pharmaceutical Market conducted by DSM Group marketing agency, 5.3 bln packages of drugs worth about 991.9 bln rubles (in retail prices) were sold through pharmacies in 2018. The drug sales grew by 4.6% in value and 4.9% in kind compared to 2017. This raises concerns as high growth in the industry raises competition in the market. 

Development of technology. It is often necessary to instantly invest a tangible amount of money to implement a new technology, and it is important to estimate the benefits for the company from this investment in the future. A company like GSK must be open to development and innovation so that they can provide quality goods to clients and consumers. This is a factor to be considered since changes when it comes to technology is inevitable.