COMMGMT 1001 Introduction to Management I : Strategies Deployed by CSL

Research what strategies has been deployed by the company, and explain How? Why? Research areas Mission, vision, core competences Successful Strategies deployed in the past Current strategies 

1. Briefly trace the development and growth of the organisation from its beginnings to the present through the application of corporate strategies – what types of strategies have these been? There have been many criticisms of the business practices that company has pursued over the years. Describe TWO of these practices and outline the outcomes. Perform an environmental analysis for the involvement of the organisation in the context of the industry(ies) it operates in – what are the main opportunities & threats? Describe the organisational culture or leadership style within the organisation.

2. There have been many criticisms of the business practices that company has pursued in recent years. Describe TWO of these controversies and outline the outcomes. Focus on the past strategies / tactics which were criticised The criticisms may comes from various stake holders such as competitors, employees, customers, suppliers, communities and others such as, media journalist, industry experts, academic professionals etc.

3. Perform an environmental analysis for the involvement of the organisation in the context of the industry(ies) it operates in – what are the main opportunities & threats? Analysis Tools General Environments (PESTEL) analysis Specific Environments analysis M. Porter’s five force analysis Resource Based Model analysis SWOT

Strategies Deployed by CSL Ltd

There are many companies today the employ the SPA model of doing their business and CSL is one of them. It is a specialty biotherapeutics firm working to develop and produce treatment aimed at saving human lives. The company operates majorly in Australia, UK, Germany, U.S, Switzerland and other parts of the world. Its primary area of specialty is in the production of human plasma products for the treatment of health conditions. The CSL Behring is recognized as the world leader in this kind of products. In conjunction with Novartis, the bioCSL company created Seqirus in 2015 which is currently the world biggest producer of influenza vaccine. Seqirus operates in U.S., Germany, UK and Australia where it has heavily invested in research and development of products to control and prevent the spread of influenza (CLS Behring 2017). It also conducts the marketing of vaccines and antivenom products.

According to CSL (2017), the company’s mission is to deliver to quality products and work with the consumers at the fastest time possible and reasonable price. The firm claims to handle all challenges it faces by ensuring that what it produces is safe and reliable to solve the problem at hand hence ensuring customer satisfaction. All teams are empowered by the company so as to develop systems that conform to its global and conducive to the surrounding including the community as a whole. The primary vision of CSL (2017) is the commitment to providing the best therapies and medical products that treat unmet medical conditions in the world. It is committed patient treatment through research, sponsorship of patient programs, expanding education. There is heavy investment in new technologies develops new products. CSL has also been known for its high integrity through a commitment serving the needs of the people using their product. In production and research, the company has been known to collaborate with the major partners like Novartis so as to develop high-quality products (CSL Behring 2017). According to CSL Group Global (2017),

Many companies have been known to deploy different strategies in doing their businesses. Some of the most common strategies used by CSL are the Strategic Partnerships, M. Porter’s Generic Strategies, and the Growth Strategies. Strategic Partnership can be done through joint ventures, intersectional or horizontals as seen in the case of CSL. According to Greenblat (2010), CSL had entered into an alliance with GlaxoSmithKline to as a way of expanding into the Russian market. This partnership was meant to take advantage of the vast under-exploited Russian market. A further application of the strategic partnership strategy was visible when the company joint venture with Novartis to create the Seqirus that is now the world leading producer of the influenza vaccine. Joint ventures are known for creating totally different entities.

1. Porter’s Generic Strategies provides for focus, differentiation and cost leadership. Differentiation is where a company seeks uniqueness by providing that aspect which the buyers of a product view as important (Jones 2010). CSL has used this strategy by developing the products like ISCOMATRIX Adjuvant that are both affordable and of high quality (CSL Group Global 2017). As a result of extensive research, the company’s products are associated with high quality. It also ensures that there is cost leadership and that is why it has stayed at the helm of the biotherapy business. CSL’s growth can be said to majorly horizontal. For instance, having started in Australia, the company spread its activities to the U.S, China, UK, Germany, and Switzerland. In 2010 CSL Ltd entered a partnership with GlaxoSmithKlien hence extending its market to Russian. It has also acquired various other companies and like the Novartis after having created joint ventures with them. As such, it has sought to improve and increase the number of products it produces (CSL Group Global 2017). To the present day, the company still shows an appetite of acquiring other institutions.

Criticism of CSL Strategies

CSL Limited has been criticized for two reasons. First, its productions systems are have a lot of manufacturing flaws and secondly, the vaccines are made under questionable and objectionable conditions. According to Hall (2011); some drugs manufactured by CSL were having manufacturing flaws and the conditions under which vaccines were made raised concerns. FDA had criticized the company for poor conditions due to the lack of the manufacturing staff to wear a mask. TGA (2011) stated that the Food and Drug Administration (FDA) had warned that it would withdraw CSL’s license if the conditions were not improved. TGA and FDA agreed that CSL’s activities posed a great risk to American and Australian public hence the need to address these concerns. For instance, TGA had realized that there had been high incidents of febrile reactions on patients especially children after an influenza vaccines administration. CSL According to Hall (2011), CSL did not carry-out the evaluation of testing of raw materials. It also failed to investigate problems associated with the products properly. The Company also failed to carry out essential deficient checks and likely problems that the products may be associated with. FDA had found that the company did not look into the cause of dark particles in the swine flu vaccine (Hall 2011). TGA has stated that these problems did not pose an immediate problem but should be addressed to avoid future problems. A medic, Dr. Peter Howard said that the company was failing to ensure the safety of its drugs. As such, the company may be said to be falling short of its CSR. In Canada, there were recorded case of adverse side effects after the immunization campaign against influenza using the Split-virus vaccine developed by CSL company in Canada (Kelly, Skowronski, De Serres, and Effler 2011). Similar effects had been felt in Europe and Panama. The Split-virus TIV is believed to have been associated with increasing reactogenicity, especially the rate of hysterical reaction in children. Whyte and Buckley (2012) also state that patient who has been treated with some snake antivenoms of the CSL have complained dizziness and allergic reactions after using the drugs. They claim that at times they experience headaches. In as much as the company is doing a lot to in the health sector, it needs to do more to ensure the safety of their patients. The National Research Council (2012) stated that increase in bioactivities was threatening the environment. The Snake antivenoms of CSL result in a huge release of chemicals that had great environmental consequences. Króliczewska, Mi?ta, Zawadzki, Wypch?o, and Króliczewski (2011) explained that serum parameters were likely to impact negatively on the breeding sequence of animals like rabbits. They stated that animals with similar characteristics were also likely to be affected by these products.

Environmental Analysis

PESTEL

PESTEL refers to Political, Economic, Social, Technological, Environmental and Legal factors that affect organizations and their business. CSL has invested in different parts of the world with different systems. Some of the political issues that have affected CSL are government policy and foreign trade policy. According to Mathews, Ribeiro, and Vega (2012), China has been perceived to have policies that have tended to favor local companies at the peril of foreign investors. This is because most companies are state-owned hence highly regulated by the government. The Communist Party funds most of the businesses while limiting resources to foreigners hence making them less competitive. The government also demands to have a large share in the private companies and as such making operations hard for foreign investor especially one like CSL which come from capitalistic worlds. Laruelle and Peyrouse (2012) explained that the Chinese people do not differentiate the business from social life. To do business in China, one must develop strong ties with local partners. In fact, the best way that an individual can invest in China is through partnerships and joint ventures so as to escape huge taxation rate and interest rates placed on foreign investors.

The Chinese system is not any different from Russia in that all are based on communism. CSL’s 2010 joint venture with GlazoSmithKlien in Russia was useful in escaping trade barriers (Greenblat 2010). In the U.S and UK, the company has been affected by reduced economic growth. Most of the company’s operations are located in countries like UK and Germany whereby between 2008 to 2011 slow economic growth was witnessed. The UK was struggling with issues of unemployment consumption of products. National Research Council (2012) observe that biotechnology was having a major environmental effect due to the failure of companies to live act to the standards set by the regulators. Hall (2011) set that the complaints of FDA and TGA were not being paid attention to by CSL. Christensen, Carrico, Sanyal, and Gennings (2013) sets that most environmental chemical like polychlorinated biphenyls and metal released from biochemical companies had an environmental effect that would affect sexuality and immune system of humans and animals. And as explained by Hall, adverse effects were already being witnessed in humans.

The 2008 economic downturn witnessed in the U.S, UK, Germany and most other European countries are said to have had a major negative impact on the health of children. In the US, children were recorded to have increased cases of asthma and the insufficiency of control measure. The economy of the country had shrunk making it hard for it to invest in the health sector. The cost of production and research increased hence most companies could not afford it (Ramji et al. 2014). Ramji et al. (2014) state that economies of countries like Germany went into recession as the governments struggle to streamline things. Van Marrewijk, Ottens, and Schueller (2012) explained the European recession force many multilateral to start focusing on Asia where the economies were growing steadily. On the same, not CSL, as stated by Greenblat (2010) sought to invest in other nations like Russian, China, and Brazil.

CSL Ltd has also to be witnessing stiff completion from other organization in the biotechnology industry. According to Thurlow (2015) stated that the company had fears that stiff competition was likely to reduce its market share especially with the ability of rivals like Barter International to produce human blood-plasma therapies. As a result, CSL estimated that its profit on the foreign markets would drop from 12% to 10% from 2016 (Thurlow 2015). To increase its shares, it wanted to buy the Novartis vaccines business. Quoting Perreault, Thurlow (2015) explains that CSL’s move to buy Novartis’s business was due to several acquisitions made by their competitors. They need more energy to stay relevant in the biotechnology industry. Such notable competitor was Baxalta.

Organizational Culture

Alvesson (2012) stated that all organizations are keen on how their members feel, behave, and what they value so as to align it with the institution code of conduct. It is important to regulate corporate culture so as to ensure that all there is a little gap between what people do and believe. Alvesson (2012) defined organizational culture as that system of shared beliefs, values, assumptions, and rules that regulate how individuals in an organization behave. The values of an organization are what inspire people to achieve organizational goals. According to CSL Group Global (2017), CSL is a company driven by strong believe in their values and code of ethics. Some of its values are customer focus, innovation, integrity, collaboration and superior performance. The company claims to be a world leader in the production of biotherapies even though they acknowledge that there was a lot of competition from companies like Baxter and Baxalta of the United States (Thurlow 2015). CSL (2017) reported that the company had superior products like the influenza vaccine that effectively combats influenza. Zheng, Yang, and McLean (2010) observed that extensive studies have proved that there is a direct link between organizational performance and organizational culture. It is, therefore, important for companies investing in the international market to ensure that their core values are for the general good. CSL ensures this through the production of products that are safe for their customers even though there been instances where some have resulted in side effect and harm to the environment as well as user (Hall 2011). The company has also invested in partnerships to promote research, education, and development of the biotech industry. Seqirus creation in 2010 was an incredible result of the application of this strategy. Jones (2010) explained that it is important for companies seeking to invest in a new market to have strong organizational culture, but they must also use strategic partners and ensure that their products are unique and effective to appeal to the new market. Being an expert with long experience, CSL has effectively penetrated foreign markets like the US and Russia.

Conclusion:

CSL has been in the biotechnology industry for years where it has continuously evolved and developed new strategies to suit the market demand. It is clear that the company does not hold back when it comes to coming up with new skills and will do all it takes to stay ahead in the area of its specialty. Even though it is established as provider of the recombinants and plasma therapies, it has made several milestones in the manufacture of vaccines through acquisition of other companies like the Novartis Ltd. In as much as it has a booming business, it has fallen short of the required threshold hence the need to improve to avoid instances where some of its products like the antivenoms and the split-virus vaccines end up having side effects on the parties. However, it has as strong organizational culture which puts the interests and safety of its patients and customers first. The fact that CSL has stayed ahead in business and the quality of product, the company can be said to possess great potential to improve on its short-coming if it can take stakeholder concerns seriously.

References:

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