Glaxosmithkline Plc SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Glaxosmithkline Plc managers to do a situational analysis of the company . It is a handy technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Glaxosmithkline Plc is facing in its current business environment.

The Glaxosmithkline Plc is one of the leading organizatations in its industry. Glaxosmithkline Plc maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Glaxosmithkline Plc to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Glaxosmithkline Plc strengths, and eradicate its weaknesses.

Step by Step Guide to Glaxosmithkline Plc SWOT Analysis

Strengths of Glaxosmithkline Plc – Internal Strategic Factors

As one of the leading organizations in its industry, Glaxosmithkline Plc has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Glaxosmithkline Plc are –

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• Superb Performance in New Markets – Glaxosmithkline Plc has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
• Automation of activities brought consistency of quality to Glaxosmithkline Plc products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure – Glaxosmithkline Plc is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Successful track record of developing new products – product innovation.
• Strong Free Cash Flow – Glaxosmithkline Plc has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Highly skilled workforce through successful training and learning programs. Glaxosmithkline Plc is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
• High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

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Weakness of Glaxosmithkline Plc – Internal Strategic Factors

Weakness are the areas where Glaxosmithkline Plc can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• Investment in Research and Development is below the fastest growing players in the industry. Even though Glaxosmithkline Plc is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
• Limited success outside core business – Even though Glaxosmithkline Plc is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• High attrition rate in work force – compare to other organizations in the industry Glaxosmithkline Plc has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Glaxosmithkline Plc needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Glaxosmithkline Plc is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for Glaxosmithkline Plc – External Strategic Factors

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• Government green drive also opens an opportunity for procurement of Glaxosmithkline Plc products by the state as well as federal government contractors.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Glaxosmithkline Plc to capture new customers and increase its market share.
• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
• New trends in the consumer behavior can open up new market for the Glaxosmithkline Plc . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Glaxosmithkline Plc.
• The market development will lead to dilution of competitor’s advantage and enable Glaxosmithkline Plc to increase its competitiveness compare to the other competitors.
• The new technology provides an opportunity to Glaxosmithkline Plc to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Glaxosmithkline Plc’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

Threats Glaxosmithkline Plc Facing - External Strategic Factors

• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Glaxosmithkline Plc
• Rising raw material can pose a threat to the Glaxosmithkline Plc profitability.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Glaxosmithkline Plc   in those markets.
• Imitation of the counterfeit and low quality product is also a threat to Glaxosmithkline Plc’s product especially in the emerging markets and low income markets.
• Liability laws in different countries are different and Glaxosmithkline Plc may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Glaxosmithkline Plc

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Glaxosmithkline Plc
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Glaxosmithkline Plc

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Glaxosmithkline Plc managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Glaxosmithkline Plc

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)