AstraZeneca is a leading and major global player in the biopharmaceutical industry. discovers, develops, manufactures, and markets prescription pharmaceuticals and biologics for various conditions including cardiovascular, gastrointestinal, neurological, cancer, respiratory and inflammation, and infection. The company is dedicated to advancing science and innovation to deliver life-changing medicines to patients worldwide. AstraZeneca focuses on innovative research and development across multiple therapeutic areas, including oncology, cardiovascular, respiratory, and autoimmune diseases.

Also Read AstraZeneca: PESTEL Analysis of Astrazeneca Company

AstraZeneca’s SWOT analysis evaluates the brand by its strengths & weaknesses which are the internal factors along with opportunities & threats which are the external factors. Let us start the SWOT Analysis of AstraZeneca:

SWOT Analysis of Astrazeneca Company: 

Strengths:

• Financial Positioning: AstraZeneca enjoys a sound financial performance and has been generating consecutive revenues. Additionally, the accumulated profit reserves can be used to fund capital expenditures.
• Competent Workforce: AstraZeneca’s massive investment in the training of its workforce has proved fruitful in terms of the efficiency of its business operations.
• Social Media presence: The omnipresence of AstraZeneca on social media has been a driving force behind its success. It enjoys a huge count of social media followers on platforms like Twitter, LinkedIn, and Facebook. Their engagement with customers is timely and thus creates an impact.
• Geographic location: The location factor has enabled the company to ensure cost cuts, in the face of stiff competition. This ensures that the company has a competitive advantage.
• Automation: The automated stages of production ensure that the products are of standardized quality and it also enables the business to accordingly adjust the size of production.
• Distribution Network: The distribution network and reach of AstraZeneca is wide. Owing to its ability to reach almost every state in its target market, the products are available to a large number of consumers at the same time (Verbeke, 2013).
• Trademarks and Patents: AstraZeneca’s intellectual property rights allow it to enjoy the benefit of exclusivity since identical products with similar formulations cannot be launched in the market.

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Weaknesses:

• Employee Turnover Rates: Researches reveal that the organization has a high employee turnover rate, as compared to its competitors. This implies that the organization spends more on the training of personnel than the benefits that it may reap from the investment.
• Current Ratio: The current ratio of AstraZeneca is on the lower end. This means that the organization does not have sufficient current assets to meet the short-term liabilities. Furthermore, this may lead to liquidity problems ahead.
• Rented property: Since a major proportion of AstraZeneca’s property is rented and not purchased, it has to bear the massive cost of monthly rents which is an added cost.

Opportunities:

• The availability of technological advancements is a boon for AstraZeneca as it can reduce its consumer acquisition cost. Alongside this, it will enable AstraZeneca to retain its existing consumers and devise differentiated pricing strategies across different markets. This will help it acquire new consumers.
• AstraZeneca’s investment in online platforms can be utilized to leverage consumer acquisition using big data.
• A reduction in the cost of transportation can be transferred to consumers in the form of a price cut or it may be looked upon as a measure of increasing profitability.
• The increase in the proportion of the global aging population is a significant opportunity for AstraZeneca to expand its business operations. Furthermore, biosimilar markets are increasingly becoming important

Threats:

• Entry of Competitors: The profitability of a business idea drives the entry of new players in the industry. Thus, intense competition is one threat that AstraZeneca may face.
• Wage Laws and Pay Level: The rise of pay level or minimum wage Laws may be a negative factor for AstraZeneca’s productivity. For example- China’s wage level shot up to $15 per hour, making it expensive to hire workers.
• Absence of a Skilled workforce: If AstraZeneca is unable to have a competent team of resilient workers across its different markets, then it may not be able to target consumers in those markets, making it unprofitable.
• Rising costs of raw materials: This increases the cost of production and pushes down profitability.
• Generic drugs: The development of generic drugs is a significant threat to the established drugs of AstraZeneca and the organization must keep track of it to ensure that the products are effective in light of all factors.

A critical analysis of AstraZeneca’s Shareholders and Stakeholders: 

To start with the shareholder analysis, we may first seek to learn the concept of Return on Equity. It is a measure of the profitability of an organization relative to the shareholders’ equity. It is the net profit divided by the equity of the shareholder. Research reveals that AstraZeneca provides a better Return on Equity, as compared to the average ROE offered by other pharmaceutical companies (Holland & Bátiz-Lazo, 2004). An analysis of the business operations of the organization reveals that in the third quarter of 2021, the company reported total revenue of $9.87 billion, marking a 50% year-over-year growth. Notably, nearly one-third of the revenue was sourced from its Covid-19 vaccine. Furthermore, the organization’s top-line growth has furthered the increase of its Earnings Per Share (EPS). It surged 14.9 YoY, in the third quarter of 2021. Additionally, it has been forecasted based on the organization’s deep pipeline that it may offer more than 20% YoY EPS growth in the coming 5 years. Furthermore, AstraZeneca’s net debt to EBITDA ratio stood at 3.1 in 2021. The number is decent, factoring in the acquisition that the company undertook some months ago. Moreover, as per the reports of the third quarter, the company has a debt of $24.7 billion which looks sufficiently large at the face value. However, factoring in the size of the organization and the efforts of the management to create wealth out of it, the number is decent. The shares of AstraZeneca Pharma India Limited have witnessed a price hike of 242% in less than 5 years. It even touched 8.2% in a week. In the past, AstraZeneca Pharma India also managed to increase its EPS by 45% in a year. Being a socially conscious organization, AstraZeneca seeks to deliver sustainability, since it is of utmost importance to the stakeholders and their employees. To attain the objective of sustainability, they implement their strategies and make a real-time impact, not only for patients but for society as a whole.

Strategic options available for AstraZeneca: 

Strategy choices are generally evaluated based on 4 aspects- markets, operating model, competitive advantage, and financial performance. The organization is aiming to transform its Research and Development model to improve its pipeline and thus the operating model. Furthermore, it involves partnering with academic institutions to better understand diseases and their complexities. As an attempt to improve its financial performance, it is aspiring to capitalize on its assets and sacrifice exclusivity to face a prospective revenue decline. Furthermore, the organization aims at productivity improvements. It is willing to invest in the business while generating returns for its shareholders. The financial performance is further judged by the dividend policy. The company has adopted a progressive dividend policy such that the dividends either grow or remain consistent over the years. The drivers of AstraZeneca’s strategy are scientific leadership and return to growth. It has stimulated the development of autonomous biotech units to catalyze decision-making and encourage innovation.

Considering the COVID-19 situation, the short-term strategy of AstraZeneca shall certainly be the production of vaccine doses. The Chief Executive shared that being a vaccine giant was never a part of AstraZeneca’s plan, rather it has been created by a global accident. It must be noted that AstraZeneca’s vaccine venture is unprofitable since it decided upon ‘at cost’ in the global pandemic. However, the expertise that is gained from the production would certainly become handy in the further development of vaccines.

The 2025 Vision of AstraZeneca is to double its revenue and the number of medicines delivered. To achieve this vision, the organization is planning to follow a “crowd-powered strategy” wherein it will make it is 64,000 responsible for it. This is not just a measure of making the workplace more inclusive but also allowing the flexibility to create and innovate. Such flexibility increases the accountability of employees, and the will to perform work, and allows thinking out of the box. Thus, this will catalyze the process of AstraZeneca attaining its medium as well as long-term goals.

Recommendations for AstraZeneca in the short, medium, and long term based on SWOT Analysis:

• Vaccine Production: Since COVID-19 vaccine production is neither profitable nor the ultimate goal for AstraZeneca, the organization may analyze ways of an exit. It can explore the prospect of selling it to a vaccine-producing giant such as Sanofi. However, it may be tricky to strike a mutually profitable deal. It can also look at the prospect of handing it over to an international health organization (Vogel & Kupferschmidt, 2021). For example- Gavi. Though AstraZeneca’s business figures do not indicate the pandemic push of vaccine production is detrimental. However, the board must have a sound plan in mind to be answerable to its stakeholders in the long term.
• R&D: Though AstraZeneca commits itself to the registration of clinically trialed drugs, it has an insignificant priority Research and Development pipeline. As a result, access plans cover only some late-stage projects. Thus, the organization should focus on the extension of access plans to more late-stage projects as part of its long-term strategy implementation. It can look at the inclusion of more elements of product delivery in its access plans. These may include licensing, equitable pricing, etc. By the introduction of equitable pricing and licensing, AstraZeneca will be able to make its way into the diabetes drugs arena, namely dapagliflozin, in the medium and long term.
• Product Delivery: AstraZeneca can explore the prospect of expansion of the Healthy Heart Africa pricing model, to onboard more countries. This will also lead to the possibility of exploring it further in more areas such as oncology and diabetes. To put it simply, AstraZeneca does well in this periphery, securing sixth place globally. It has relevant access strategies for its market and products. Though it promotes several health awareness initiatives, not much has been done in the financial sustainability domain. The organization should more often demonstrate instances of sound business models aiming at financial sustainability in the short as well as medium-term, to gain confidence.

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