Gsk a Merger Too Far

957 Words Jan 28th, 2012 4 Pages
GSK, a merger too far?

1- Analyse these two forces :

* Threat of entry : Very important

* Very high expenses on advertising Direct to Consumer (DTC) * In this industry some specific skills to manufacture drugs are required, because they need to pass severe clinical trials before being commercialized. * It can take a very long time to become profitable and to compensate the speeding in R&D. * The whole industry has a bad reputation because of former issues so it is difficult to have a positive image. * Also, you need numerous sales representatives to have a real impact on the market and to get a global commercial reach.

* Threat of rivalry : important * Even niches areas in this industry are more
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These investments take a key place in R&D and that reinforce the market situation of GSK. Investment in new medication is an opportunity, one should not focus on investing in classic medication.
In the end, GSK has underlined the importance of partnerships with major actors of the market such as biology and chemistry companies. It allows GSK to consider more joint-ventures and sponsoring in research. Thanks to this, GSK managed to install a partnership with sixteen companies, following 53 R&D programs. The preceding methods for organization have been successful to GSK. Actually, the results have been identified as positive very quickly. We can underline the increasing number of projects that reached 147, well-divided within the new organisation: 82 in New Chemical Entities, 45 in product development and 20 in vaccination. As for the partnerships, we can see in the previous paragraph the success of this management. We can add that it reduces the risks for copies or industrial theft.
We conclude by saying that this new organisation is a success for GSK’s R&D.

Correction
Pestel analysis : checklist
Political:
* Political parties and alignments at local European or regional trading-block level * Legislation (taxation and employment law) * Government ownership and attitude to monopolies and competition

Economic * National growth rates * Exchange rate * Cyclicality * Energy costs, transport

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