Case 5 - Corvinus University of Budapest
Case 5 - Corvinus University of Budapest
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
01 ANALYSIS
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
MARKET ANALYSIS
GSK is behind its competitors due to slowing revenue increase and misguided R&D spendings.
160
In FY20 GSK could reach the level of
140 Pfizer but far behind from
130
117 122 120 AstraZeneca.
120 128
115 118
100 100
87 90 IN FY21 share price decreased
97
80 significantly.
FY17 FY18 FY19 FY20 FY21
1.5
R&D is a key success factor in the
1.0 pharmaceutical indsutry
0.5
The number of new patents is a
1999 2005 2010 2015 2020 competitive advantage
Vaccines
Pharmaceuticals Vaccines Consumer healthcare Pharmaceuticals Vaccines Consumer healthcare
CONCLUSION 2
There was an 8% drop in Pharmaceuticals revenue, a 5% increase in Vaccines and a 3% increase in
Consumer healthcare
COMPANY ANALYSIS: BCG MATRIX
Each division performs acceptable, but there is room for improvement .
? 4
Nine power brands in Consumer
Healthcare
CHALLENGES
CH 1 Covid-19 late vaccine
2 Cancer research faild
3 Of 125 top managers, 100 changed
LOW HIG
H 4 Drop in share price
RELATIVE MARKET SHARE
COMPANY ANALYSIS: BCG MATRIX
Each division performs acceptable, but there is room for improvement .
V V 1
One of the largest pharma company:
7% global share
BUSINESS GROWTH
P P
3 20 late stage drugs
? 4
Nine power brands in Consumer
Healthcare
CHALLENGES
CH 1 Covid-19 late vaccine
2 Cancer research faild
3 Of 125 top managers, 100 changed
LOW HIG
H 4 Drop in share price
RELATIVE MARKET SHARE
COMPANY ANALYSIS: BCG MATRIX
Each division performs acceptable, but there is room for improvement .
V V 1
One of the largest pharma company:
7% global share
P P
3 20 late stage drugs
? 4
Nine power brands in Consumer
NEED TO RESTRUCTURE GSK
Healthcare
CHALLENGES
CH 1 Covid-19 late vaccine
2 Cancer research faild
3 Of 125 top managers, 100 changed
LOW HIG
H 4 Drop in share price
RELATIVE MARKET SHARE
01 ANALYSIS
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES PRE-SPIN-OFF
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES PRE-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES POST-SPIN-OFF
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES PRE-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES POST-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES NEW ALTERNATIVE
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES PRE-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES POST-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES NEW ALTERNATIVE
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES NEW ALTERNATIVE
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES PRE-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES POST-SPIN-OFF
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES NEW ALTERNATIVE
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES NEW ALTERNATIVE
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES ELLIOTT’S WISH
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES IMPORTANT TREND IN HEALTHCARE
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE IMPORTANCE OF PREVENTION*:
GROWING
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES IMPORTANT TREND IN HEALTHCARE
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE IMPORTANCE OF PREVENTION*:
GROWING
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
GSK COULD SELL THE SEGMENT
WITH A DOWNSIDE DISACOUNT
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
DEVELOPMENT OF ALTERNATIVES
Based on the analysis, GSK has 5 restructuring alternatives.
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
GSK COULD SELL THE SEGMENT
WITH A DOWNSIDE DISACOUNT
CONSUMER
PHARMACEUTICALS VACCINES
HEALTHCARE
01 ANALYSIS
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
3 SEPARATE ENTITIES
The recommendation is based on 3 different entities: pharma, vaccines and consumer healthcare.
WALMSLEY’S PREFERENCE
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
HUMAN RESOURCES: RESTRUCTURING
To grow, we must focus on the people within the Organization.
GlaxoSmithKline
HUMAN RESOURCES: RESTRUCTURING
To grow, we must focus on the people within the Organization.
PHARMACEUTICALS
GlaxoSmithKline
VACCINES
CONSUMER HEALTH
HUMAN RESOURCES: RESTRUCTURING
To grow, we must focus on the people within the Organization.
NON-EXECUTIVE
PHARMACEUTICALS 1.
BOARD MEMBERS
GlaxoSmithKline
1. Industry experts
NON-EXECUTIVE
PHARMACEUTICALS 1. 2. Scientists
BOARD MEMBERS
3. Investors
GlaxoSmithKline
1. Industry experts
NON-EXECUTIVE
PHARMACEUTICALS 1. 2. Scientists
BOARD MEMBERS
3. Investors
GlaxoSmithKline
1. Industry experts
NON-EXECUTIVE
PHARMACEUTICALS 1. 2. Scientists
BOARD MEMBERS
3. Investors
GlaxoSmithKline
1. Compensation
2. Motivation
CONSUMER HEALTH 3. KEEP EMPLOYEES
3. Organizational culture
PR: JUDGEMENT OF GSK
GSK should be the leader in collaboration and supporter of the healthcare ecosystem.
VISION CULTURE
IMAGE
PR: JUDGEMENT OF GSK
GSK should be the leader in collaboration and supporter of the healthcare ecosystem.
IMPROVEMENT BASED ON THE VCI MODEL VISION: conveyed image, the values
showed outward by the Company.
IMAGE
PR: JUDGEMENT OF GSK
GSK should be the leader in collaboration and supporter of the healthcare ecosystem.
IMPROVEMENT BASED ON THE VCI MODEL VISION: conveyed image, the values
showed outward by the Company.
Building
1 Lack of synergies in
Impact
the Company. collaborations.
Probability
FINANCE: EFFECTS
In order to implement the strategy, the company have to invest 657 – 709 million £
02 ALTERNATIVES
STRUCTURE
03 RECOMMENDATION
04 IMPLEMENTATION
05 IMPACT
FINANCIAL IMPACT
GSK’s equity value is £144 billion.
60,000
Financial Forecast
50,000 48,247
44,673 Declining profit in the initial
41,364
40,000 38,300 phase of the transformation
35,463
30,000
From FY 24 the operating profit
20,000 will increase
QUESTIONS
5 ALTERNATIVES: PRE-SPIN-OFF, POST-SPIN-OFF,
ALTERNATIVES
ELLIOTT’S WISH, 2X NEW ALTERNATIVES
SPINNING OFF CONSUMER HEALTHCARE IS A GOOD IDEA? YES.
HOW CAN GSK REGAIN ITS POSITION IN THE3INDUSTRY?
RECOMMENDATION 3 DIFFERENT ENTITIES.
SEPARATE ENTITIES
HOW TO MAKE GSK BE INNOVATIVE AND EFFICIENT? DIFFERENT ENTITIES: DIFFERENT CHALLENGES.
HOW TO CONVINCE ELLIOTT ABOUT THE PLAN? COMPROMISE (MAIN CHALLENGE).
1. HUMAN RESOURCES: RESTRUCTURING
2. PR: JUDGEMENT OF GSK
IMPLEMENTATION 3. OPERATIONS: TIMETABLE
4. STRATEGY: CONTINGENCY PLAN
5. FINANCE: EFFECTS