Operations - Glaxo Smith

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GlaxoSmithKline (GSK) is the world’s second largest pharmaceutical, biologicals and healthcare company (as per 2004 figures). Its sales touched GBP 20 billion yielding a profit of GBP 6 billion approximately. It employs around 100,000 people worldwide, with over 40,000 in the sales and marketing teams. Primarily headquartered in London, with dual US headquarters in Philadelphia and Research Triangle Park. GSK’s prime activities include creation, discovery, development, manufacture, and marketing pharmaceutical and consumer health-related products the world over. GSK operates largely in two segments, Pharmaceuticals and Consumer Healthcare. GSK has more than 36,000 SKU’s manufactured across over 80 manufacturing plants worldwide. GSK has a market share of seven percent in the pharmaceutical business. Year Merger/Acquisition New Company Name 1989 Beecham merged with SmithKline Beckman SmithKline Beecham 1995 Glaxo acquires Burroughs Wellcome & Co. Glaxo Wellcome 2000 Glaxo Wellcome merged with SmithKline Beecham GlaxoSmithKline 2001 GlaxoSmithKline acquires consumer health care company Block Drug Co. GlaxoSmithKline Exhibit 1: Merger and Acquisition activity at GSK The Challenges Post merger Integration Issues With the spate of mergers and acquisitions, GSK faces three major integration challenges: * Integrating the separate identities * Integrating different strategies and * Integrating the packaging and manufacturing operations of Glaxo, Burroughs Wellcome, Beecham, SmithKline Beckman and Block Drug Co. Complex product portfolio Market dynamics and short life expectancy of patients have tilted the demand in favour of specialised drugs. GSK, like its competitors has to combat the need for specialised drugs continuously and reaping quick rewards. Such market forces alongside a changing industry make creative marketing and innovative products

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