3M Pharmaceuticals Pty Ltd Competitive strategy Assignment Answer

Introduction : A Comprehensive Strategic Analysis of 3M Pharmaceuticals Pty Ltd and TES Electrical Using PESTLE and Porter's Five Forces Models 

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3M Pharmaceuticals Pty Ltd is an enterprise located in Thornleigh, South Wales in Australia. The company deals specifically with pharmaceuticals. 3M Pharmaceuticals Pty Ltd has a team staff of 183 members. Moreover, the company’s export revenues account for AU$10,000,000 in 2017. Talking about the Tailored Engineering Solutions (TES) is a highly trusted and pioneer electrical services company located in Western Australia. The firm has over 100 technical staff and supporting team members. The organization deals in audio-video, lighting, communication device installation. The company is known for its well-structured organizational system and management process.

PESTLE Analysis of 3M Pharmaceuticals Pty Ltd

• Political Factors: Being dependent on the drug supplies from other countries, political factors that can affect 3M Pharmaceuticals include the political turmoil, unrest, and terrorism within the region or in other nation, especially in Europe, Sub-African region, and the Middle East. These factors may influence the pricing strategy and services offered by the company (Paul, et.al, 2014). In addition to this, political factors will affect the availability of drugs in the country.
• Economic Factors: The Company operates in the global market. Therefore, the change in the value of the Australian Dollar in the international market poses a major challenge to the company's economic strategies. In addition to this, the Trump administration in the USA has implemented the protectionist policies that have affected the featured healthcare providers of 3M Pharmaceuticals. In addition to this, the recession impacts severely on the company’s sales as it reduces the disposable income of the customer (Ho, 2014).
• Social Factors: The uncertainties in the Affordable Care Act may lead to an increase in costs of the services. This may further decrease the enrollment by the healthy people of Australia. In addition to this, people nowadays are more informed about health issues. This has changed their expectations and demands of services from the organization. Furthermore, the public activism has also boosted due to the social networking. This can help the company in getting closer to its patrons.
• Technological Factors: To compete regionally and internationally, the company has undergone much technological innovation. Along with this, the company has developed an R&D department to understand the market demand and make products in accordance with it. These two factors have contributed majorly to the growth of the company. Moreover, implementing ERP system will help the company in improving on its efficiency. Other measures, such as ‘direct to patient’ advertisement campaign and new communication technologies, customized treatments, etc., are really helping the organization to go and grow (Aithal, 2017).
• Legal Factors: The Company has faced many litigations due to its waste disposable methods. In addition to this, patients are demanding more and more rights. This has expanded the legislative boundaries of healthcare programs. Along with it, global inconsistencies also pose challenges for the company.
• Environmental Factors: Increasing community awareness and environmental agenda impact the abilities to determine the eco-opportunities in the market. 3M Pharmaceuticals is largely investing in protecting the environment.

PORTERS FIVE FORCES Analysis of TES Electrical

Competitive Rivalry: Competing firms consume the market share of TES electrical in the common market (E. Dobbs, 2014). While making the strategic plans, the management of TES considers the following factors and their effects that makes competitive rivalry a strong force:-

• The large aggressiveness of enterprises (it is a strong force)
• Moderate cost of switching (it is a moderate force)
• Moderate amount of firms (it is a moderate force)

A large number of competing firms increases competition and needs more prioritization in TES’s strategic planning.

Supplier Power: Supplier's bargaining power is one of the significant forces that affect the TES electrical strategic planning process. TES can assume it as moderate factors based on the following factors:

• Moderate numbers of supplier making this force a moderate factor.
• High supply reduces the intensity of supplier power
• Moderate scale of supply

Based on the aforementioned factors, it can be concluded that the intensity of the supplier's bargaining abilities is weak due to high supply (Lee, 2012). Thus, it has a moderate impact on TES electrical. But, TES should keep this force among the major business concerns.

Buyer Power: Bargaining power of customer is characterized by the capability of the customer to affect the pricing strategy of a business. It also affects the business performance. External factors and their impacts are mentioned below that can affect the strategic considerations in TES:-

• Good quality of customer’s information (it is a strong force)
• Moderate product switching cost (it is a moderate force)
• Low sensitivity towards price (it is a weak force)

TES electrical has made high-quality information available to the customers. The information influences the consumer's decision- making process (Dulčić, et.al, 2012). Hence, the access of high-quality information increases the strategic influence of buyer’s power.

Threat of Substitution: Substitution products decreases the customer base for the TES electrical. Hence, substitutes shape the strategic planning for TES. Studying the management processes in the TES, it is figured out that organization's managerial decisions are weakly affected by the threat from substitutes. The intensities are low due to:-

• Moderately low switching costs
• Low quality of substitute
• Low availability of substitution goods.

Since the customers are moderately likely to opt substitute, this force has the weak intensity and is considered as a minor challenge in the organization's strategic management.

Threat of New Entry: Being an established enterprise, the force of new entrants is quite weak due to the high cost of entry. However, a new entrant can strike a chord in the market through dynamic strategies and management approaches. In the context of TES Electrical, the following external factors make the weak base for the new entrant:

• High entry cost
• Brand development cost is very high
• Economies of scale are also high

Hence, this force is not a critical management challenge for TES Electrical.

Conclusion

In the case of 3M Pharmaceuticals, the PESTLE analysis was done. Since the organization exports its products, nothing could be as good as this analysis to understand the outside environment. The results are reliable and extremely valuable. Based on the information gathered from the PESTLE, an organization can take the decision to expand. In the case of TES electrical, Porter's five forces model was implemented. This would help in the analysis of profitability of businesses. The five forces shape the strategic planning and figures out the strengths and weaknesses.

References

• Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates.  Competitiveness Review,  24(1), pp.32-45.

• Dulčić, Ž., Gnjidić, V. and Alfirević, N., 2012. From five competitive forces to five collaborative forces: revised view on industry structure-firm interrelationship.  Procedia-Social and Behavioral Sciences,  58, pp.1077-1084.
• Lee, H., Kim, M.S. and Park, Y., 2012. An analytic network process approach to operationalization of five forces model.  Applied Mathematical Modelling,  36(4), pp.1783-1795.
• Paul, D., Yeates, D. and Cadle, J. eds., 2014.  Business analysis. British Computer Society.
• Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis.  European academic research,  2(5), pp.6478-6492.
• Aithal, P.S., 2017. An Effective Method of Developing Business Case Studies based on Company Analysis.