Edited from: “strategy” company website, “chairman and chief executive officer's statement”, 2008 annual report
“The pharmaceutical industry is experiencing a time of unprecedented challenge. Patent expiries, regulatory issues and increased pressures from healthcare providers have combined to create an environment where our sector is associated with lower growth and higher risk,” says chief executive officer, Andrew Witty. 
GlaxoSmithKline (GSK) states that it will address these challenges through three key strategic priorities that it believes will transform GSK into a company that delivers “more growth, less risk and an improved financial performance”.
Three strategic priorities
Grow a diversified global business
GSK is reducing risk by broadening its portfolio, diversifying into new product areas that show potential, while also capturing opportunities for its products across all geographic boundaries.
It expects to generate future sales growth by strengthening its core pharmaceuticals business and supplementing it with increased investment in growth areas such as vaccines, biopharmaceuticals and consumer healthcare.
It is also seeking to unlock the geographic potential of its businesses, particularly in emerging markets and Japan.
“We have made good progress on this priority, and we believe there remain many opportunities for GSK to diversify further,” says Witty.
(1) Drive growth in the pharmaceutical business in its core markets;
(2) Deliver its vaccines forecast;
(3) Fulfil the potential of emerging markets;
(4) Expand its business in Japan; and
(5) Grow the Consumer Healthcare business.
“It's important that we generate more growth with less risk,” says Witty.
Deliver more products of value
GSK says that it is striving to build one of the strongest pipelines in the industry. It is also transforming its R&D to ensure that it not only delivers the current pipeline but also is able to sustain a flow of new products for years to come.
“As we move towards a more diversified business we will concentrate on developing a higher volume of mid-sized products for more clearly-defined patient populations. This will help develop a lower risk portfolio which is not dependent on the performance of one or two large products,” says Witty.
Steps have already been taken, with 30 late-stage assets currently in its pharmaceuticals and vaccines pipeline. Its key objective is to sustain this throughput of products over the long-term.
(1) Focus on the “best science”;
(2) Diversify through externalisation;
(3) Re-personalise R&D; and
(4) Focus on return on investment (ROI).
Simplify the operating model
“GSK is a complex organisation. We recognise that we need to simplify our operating model further, changing the way we work, removing unnecessary processes and structures which slow us down and distract us from our mission,” says Witty.
Its global restructuring programme is said to be a “vital catalyst” of its strategy. On this basis, it believes it will radically change its business model giving it the capability to support a more diverse, growing business that is also expected to be more profitable in the long-term.
(1) Evolve its commercial model;
(2) Re-shape manufacturing;
(3) Streamline its processes; and
(4) Reduce working capital
“We believe these priorities will enable us to navigate the coming years successfully and retain our leading-edge position as a company able to meet patients’ and healthcare providers’ needs into the future,” says Witty.
ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.
A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.
See the article and analysis of the ICIS Top 100 on ICIS news.
Financial highlights: GlaxoSmithKline, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
2004 |
|
Sales ($ m) |
24,352 |
22,716 |
23,225 |
21,660 |
19,986 |
|
Operating Profit ($ m) |
7,141 |
7,593 |
7,808 |
6,874 |
-- |
|
Net Profit ($ m) |
4,712 |
5,310 |
5,498 |
4,816 |
-- |
|
Total Assets ($ m) |
39,393 |
31,003 |
25,553 |
-- |
-- |
|
Diluted earnings per share ($) |
88.10 |
93.70 |
94.50 |
82.00 |
-- |
|
Number of Employees |
99,003 |
103,483 |
102,695 |
100,728 |
100,019 |
Currency Converter by
OANDA.com, The Currency Site.
GlaxoSmithKline
Company Structure
GlaxoSmithKline (GSK) is a research-based pharmaceutical and healthcare company engaged in the creation and discovery, development, manufacture and marketing of pharmaceutical products, vaccines, over-the-counter (OTC) medicines and health-related consumer products. GlaxoSmithKline was formed on 27 December 2000 through the merger of Glaxo Wellcome and SmithKline Beecham, both UK-based companies.
More about GlaxoSmithKline Structure
News:
Get news on GlaxoSmithKline plus the latest chemical news, information, data, market movements and analysis
in one place with ICIS news