GlaxoSmithKline plc is a global healthcare group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health related products. The company operated in two segments: Pharmaceuticals (Prescription pharmaceuticals and vaccines), and Consumer Healthcare.
STRATEGIC BUSINESS UNIT – PHARMACEUTICALS MANUFACTURING AND MARKETING
STRATEGIC GROUP FOR THE SBU – CONTRACT MANUFACTURING
Company Information & Market Analysis
GlaxoSmithKline PLC (NYSE:GSK), formed through the merger of British drug makers Glaxo Wellcome and SmithKline Beecham in December 2000, ranks as the world’s second largest pharmaceutical company. GSK group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health-related products. GlaxoSmithKline supply one quarter of the world's vaccines and by the end of February 2008 GSK had 24 vaccines in clinical development. It has operations in some 114 countries, with products sold in over 140 countries. The company operates in two segments: Pharmaceuticals (prescription pharmaceutical and vaccines) and Consumer Healthcare (over-the-counter medicines, oral care and nutritional healthcare). The company offers a wide range of respiratory drugs, the most important of which is Seretide/Advair (2007 sales of $7.0 billion), a leading asthma treatment. GSK is believed to be the leader in HIV/AIDS therapeutics, with its Trizivir, Epivir and Combivir drugs. The markets for its products are the United States, France, Japan, United Kingdom, Italy, Germany and Spain. The U.S. accounted for 48% of pharmaceutical sales in 2007, Europe 30% and other regions 22%. The dollar value of the global pharmaceutical market was projected to exceed $770 billion in year 2008, according to IMS Health
GSK is a global healthcare group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health-related products. It has and operations in some 114 countries, with products sold in over 140 countries. The company operates in two segments: pharmaceutical and consumer healthcare. * Estimated 7% of the world’s pharmaceutical market * Every minute more than 1100 prescriptions are written for GSK products around the world * 10 manufacturing facilities around the world for investigatory and launching drugs and then after two years of early production, company has 80 manufacturing plants around the world for new pipeline products
Michael Porter’s Five Forces Model of Indian Pharmaceutical Industry
Pharmaceutical industry is one of the most competitive industries in the country with as many as 10,000 different players fighting for the same pie. The rivalry in the industry can be gauged from the fact that the top player in the country has only 6% market share, and the top five players together have about 18% market share. Thus, the concentration ratio for this industry is very low. High growth prospects make it attractive for new players to enter in the industry. Another major factor that adds to the industry rivalry is the fact that the entry barriers to pharmaceutical industry are very low. The fixed cost requirement is low but the need for working capital is high. The fixed asset turnover, which is one of the gauges of fixed cost requirements, tells us that in bigger companies this ratio is in the range of 3.5 to 4 times. For smaller companies, it would be even higher. Many smaller players that are focused on a particular region have a better hang of the distribution channel, making it easier to succeed, albeit in a limited way. An important fact is that pharmaceutical industry is a stable market and its growth rate generally tracks the economic growth of the country with some multiple (1.2 times average in India). Though volume growth...