External Environmental Factors In Reference To Pestel Analysis (Essay Sample)

PHARMACEUTICAL INDUSTRY
Students Name
Business
Professor (Tutor)
University Affiliation
City/ State
The Date
Pharmaceutical Industry
Introduction
The primary focus of this manuscript is to discuss business environment related to pharmaceutical industry. The paper analyses both internal and external environmental factors in reference to PESTEL analysis. The document also provides a critical conclusion that may be useful in addressing alarming issues in pharmaceutical industries. Pharmaceutical company manufactures prepares and markets medicinal drugs (Cook, A.2015, 46). The industry produces pharmaceutical products that are used as basic components in modern and traditional drugs (Shah, B. 2010, 37). As a matter of fact, pharmaceutical products are often based on safety, effectiveness and high quality. This industry is an important segment of the medical profession that entirely depends on scientific study for medical advances (Cook, A. 2015,46). Most importantly, this industry is regulated and controlled through legalized laws and regulations that further promote safety and effectiveness of products. Additionally, the company manufactures medicines that are useful in the cardiovascular, digestive and nervous system. Most nations invest largely in pharmaceutical industry due to its undeniable benefits to the community.
For instance, GlaxoSmithKline is a Pharmaceutical industry that is known for its quality products. It is a leading pharmaceutical company in the whole world .Being a research based, the company produces a variety of vaccines that curb prying diseases resulting from pertussis, cervical cancer, chicken pox, rotavirus, influenza as well as hepatitis A and B. Just like any another commercial industry, pharmaceutical company is directly affected by internal and external business environment (Goodman, E. 2014, 49). Business environment plays a key role in establishment, development, management and sustainability of most companies. It is true that accomplishment of organizational objectives depends on both internal and external environment elements, which contributes largely to the effectual performance of daily operations (Charterjee, B, 2014, 47) . In this case, Political, Economic, Social, Technological, Ecological and Legal (PESTLE) factor is a useful tool for analyzing internal and external elements affecting the Pharmaceutical industry.
External business factors
External environmental elements are forces that directly affect organizational affairs (Goldcre, B. 2014, 432). External forces determine establishment, development, and sustainability of any company. With respect to PESTEL analysis, the following external business factors are influential in operating a pharmaceutical industry. Firstly, Economic factors greatly affect marketing and distribution of manufactured products (Austin, M. 2014, 70). For instance, fluctuation of market prices, interest rates, and exchange rates affect distribution and marketing of pharmaceutical products (Amende, D. 2011, 49). Also, Purchasing Power Parity and the resulting GPA of a particular country influences market share of the business in global marketing .Therefore, it is necessarily significant for a pharmaceutical firm to adopt and implement an appropriate business strategy that enables the company to remain financially stable in case of economic uncertainties. Also, it is of great necessity for the company extends marketing roots in existing and emerging markets both regionally and internationally (Jacobsen, T. & Wertheimer, A.2010, 47). Furthermore, exchange rate risk in the United States market also poses a threat to the company.
Secondly, technology is a vital element that most organization utilizes in achieving a high level of customer satisfaction (Office, B. 2013, 49). The pharmaceutical company invests largely in modern biotechnological research and study, which promotes continual advancement and development (Netreba, P. 2010, 14). As a result, the company is well-positioned in manufacturing and developing medicinal substances that meet patient demands and preferences. Due to a great investment in technological advances, pharmaceutical industry works at producing and marketing safe, effectual and high-quality products (Alex, A., Harris, C. & Smith, D. 2016, 43). Significantly, the industry relies on information technology to come up with new and improved methods of manufacturing drugs. With appropriate technological models pharmaceutical firm is in a position to find curative drugs on dangerous ailments that pose a great threat to human lives (Shostak, J.2014, 47). Hence, it is vital for the pharmaceutical industry to invest actively in technological models to ensure effectual continuity in the level of production of medicinal components. Also, the company must engage scientific and technological experts to increase the accuracy of information necessary in manufacturing and development of drugs.
Thirdly, Political and legal factors are equally essential in company management and development (Liltorp, K.2014, 16). Government laws and regulations including policies have a tremendous impact on the operation of Pharmaceutical industry. For example, in the United Kingdom, government laws and politics have great influence on both public and private healthcare facilities. Therefore, as the company diversifies in different countries, it has to adhere to the set laws including tax laws, environmental laws, employment laws as well as importing and exporting policies .Fourthly, Ecological factors also affect pharmaceutical operations (Grune, G.2014, 48). Ecological elements include global warming, natural disasters ad carbon-footprint .In most cases, the occurrence of ecological factors hinders the smooth production of pharmaceutical items. Lastly, Socio-cultural factors may impact pharmaceutical industry positively or negatively. This factor comprises of cultural difference, human attitude towards certain pharmaceutical products, languages and beliefs (Cook, A.2015, 46).
Internal factors
Internal business factors are forces affecting the company from within (Shah, B.2010, 37). These elements may have positive or negative impacts on the pharmaceutical industry. For instance, a business plan is an internal element that directs the company towards the achievement of set goals and objectives. The appropriate business plan is essential in achieving long-term financial sustainability and competitiveness. Therefore, it is necessary for the pharmaceutical firm to implement appropriate and effective business plan that promotes accomplishment of organizational goals. Additionally, Supply chain affects acquisition of resources necessary for the production of pharmaceutical products (Austin, M. 2014, 70). The supply chain includes suppliers, distributors, employees, partners and retailers. The related stockholders contribute largely to establishment and development of the company Moreover, Buyer bargaining power affects selling of pharmaceutical products. In many developed countries, some dominant pharmaceutical buyers tend to control the business environment under which these transactions are done .They influence the processes involved especially the pricing of these commodities.
Furthermore, the pharmaceutical company uses a proper marketing strategy that increases market share of its products. The company uses the strategy of partnership with other eligible parties to find strategic locations globally which enables diversification with low costs (Shostak, J. 2014, 47) .It also makes it easy to access developing and emerging markets that can boost its marketability internationally. The company also adopts the use of joint ventures creating an internationally based business environment. In conclusion, pharmaceutical companies should continue adopting unique marketing technique and exceptional production by incorporating key factors that effectively improve operation processes. Business plan, as well as marketing strategy, should be effectual and appropriate to increase competitive advantage especially in existing and emerging global markets (Goodman, E. 2014, 49).
References
Alex, A. A., Harris, C. J., & Smith, D. A. (2016). Attrition in the pharmaceutical industry:
reasons, implications, and pathways forward. Hoboken, New Jersey: Wiley.
Amende, D. J. (2011). Chemical Engineering in the Pharmaceutical Industry: R & D to
Manufacturing. Hoboken, John Wiley & Sons.
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Austin, M. (2014). Business development for the biotechnology and pharmaceutical industry.
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Chatterjee, B. (2014). Applying lean six sigma in the pharmaceutical industry.
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