GlaxoSmithKline (GSK) is a global healthcare company that deals with three-world leading businesses that researches, develops and manufactures innovative pharmaceutical medicines, vaccines and consumer healthcare products (GSK Website, 2017). Its products are available in more than 150 countries and have manufacturing and research sites in around 80 countries. PESTEL analysis will realize how these six external factors can have an effect on GSK in any international market.
Political Factors
Factors like changes in the international trade regulations, unstable government rules, increased taxes and trade control can affect the business of GSK and can result in decrease in their sales in any region. Moreover, the global world has witnessed huge political tension in the recent years which has pressurized the governments of different countries to emphasize on the importance of health issues. With such awareness and governments investing more in medical field, GSK has seen increase in business and will continue to increase their business in the future as well. On the other hand, if a certain country is not willing to invest more towards healthcare, this might result in fewer sales for GSK.
Economic Factors
Even with the governments willing to invest in healthcare, they need their economy to be strong before implementing such laws. If the economy of a certain country is in its declining stage, the people will not prioritize health or will not have the resources to invest in their health; the business of GSK in such economies will be affected resulting in decrease in their revenues. While if the growth rate of a country is high, that means that people are becoming rich and will result in increase in sales for GSK. Other factors like interest rate, exchange rate, price fluctuations and economic policies can affect sales of GSK in international markets.
Socio-Cultural Factors
If people of a certain country prioritize their health and think that it is important for them to use good quality products when it comes to their health, it can contribute towards increased sales for GSK in that region. Other factors like the proportion of educated people can also result in an increase in sales for GSK. If a certain region is not very tolerant towards products from a foreign country, then it might result in decrease in sales for GSK. Moreover, if a certain country considers alcohol as illegal, GSK has to make sure they do not sell drugs with alcohol content so that the sales and reputation is not affected.
Technological Factors
With the development of technology and much research done in the field of science and medicine, it is in the interest of GSK to constantly keep on improving their products. In order to do that, GSK invests a lot in their own research department which pays them off in the form of increased revenues. For instance, they are currently working on introducing ‘electroceuticals’, which will help to treat chronic diseases (Kollewe, 2017).
Environmental Factors
It is imperative for companies in the field of medicine to follow the procedures involved in their research and development to comply with the environment protection laws. By doing so, they also save the environment and build good brand image for their company which eventually results in increased sales. Moreover, investing in their CSR activities to save the environment will always help them increase their business.
Legal Factors
Following the legal requirements of local and international markets is very important for GSK’s survival. The business of healthcare is very critical and local rules of the countries are to be kept in mind so that the company is saved from any law suit. Before entering the country, GSK has to make sure that they abide by the copyright and selling laws of that country and if a certain kind of drug is banned in the country, they have to come up with some alternative so that their sales are not affected.
References
About us. Retrieved October 7, 2017, from https://www.gsk.com/en-gb/about-us/what-we-do/
Kollewe, J. (2017, August 28). Electroceuticals: the ‘bonkers’ gamble that could pay off for GlaxoSmithKline. Retrieved October 7, 2017, from https://www.theguardian.com/business/2017/aug/28/electroceuticals-bioelectronics-implants-glaxosmithkline-galvani-kris-famm
About us. Retrieved October 7, 2017, from https://www.gsk.com/en-gb/responsibility/our-planet/