Swot analysis of pharmaceutical industry

Written by john p. gross
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Swot analysis of pharmaceutical industry
SWOT analysis looks at a company's attributes, both positive and negative. (stock market analysis screenshot image by .shock from Fotolia.com)

A SWOT analysis identifies and assesses the strengths, weaknesses, opportunities and threats an organisation faces. A SWOT analysis of the pharmaceutical industry illustrates to upper management what the industry is excelling in, what improvements need to be made, where growth is possible and what pre-emptive measures need to be taken to protect shareholder or company value.

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Strengths

The strengths of the pharmaceutical industry’s SWOT analysis document the internal industry components that are providing value, quality goods and services and overall excellence. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s strengths could include low operating overhead, firm fiscal management, low staff turnover, high return on investment (ROI), state-of-the-art laboratory equipment and an experienced research staff.

Weaknesses

The weaknesses of the pharmaceutical industry’s SWOT analysis document the internal industry components that are not providing significant added value or are in need of improvement. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s weaknesses could include high-risk business modelling, disengaged Board of Directors, dated medical equipment, poor branding, low staff morale or diseconomies of scale.

Opportunities

The opportunities of the pharmaceutical industry’s SWOT analysis document the external industry components that provide a chance for the industry (or factions of the industry) to grow in some capacity or gain a competitive edge. The external industry components should be environmental factors or aspects outside the industry’s control, yet reflective of the business marketplace. For example, the pharmaceutical industry’s opportunities could include recently published research, an increase in health-conscious consumers, increased demand for pharmaceutical products, changes in Food and Drug Administration standards or decreases in employee health care costs.

Threats

The threats of the pharmaceutical industry’s SWOT analysis document the external industry components that could create an opportunity for the industry (or factions of the industry) to decline, atrophy or lose some competitive edge. The external industry components should be environmental factors or aspects outside the industry’s control, yet reflective of the business marketplace. For example, the pharmaceutical industry’s threats could include increased government regulation, a declining economy, increasing research and development (R&D) costs or a decrease in the global population.

How to Construct Your SWOT Analysis

A SWOT analysis is displayed in a two-by-two spreadsheet, designed to showcase all four features. Within the two-by-two spreadsheet, strengths and weaknesses are located in the top two boxes, left to right, respectively, and opportunities and threats are located in the bottom two boxes, also left to right, respectively.

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