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Strategic Management Perspectives Assignment Sample

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Strategic Management Perspectives Assignment Sample


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In 1989, two Danish firms, "Novo Industry A/S" and "Nordisk Gentofte A/S", merged to establish Novo Nordisk, the world's leading insulin producer. The "Nordisk Insulin-Laboratorium", which was formed in 1923 to manufacture insulin, is where Novo Nordisk's beginnings can be traced. In the field of diabetes therapy, Novo Nordisk has pioneered several innovations (Makadok, Burton, and Barney, 2018). Innovations including "Prefilled Insulin Syringes", "Oral Treatment Syringes", and "Quick Acting Insulin" were introduced after the merger. It began concentrating more on overseas markets in the late 1990s. In 2000, "Novo Nordisk A/S" (Novo Nordisk), "Novozymes A/S", and "Novo A/S" were split into three different corporations.
Novo Nordisk A/S became the holding company for the Novo Group after its demerger from Novo Nordisk A/S, and the "Novo Nordisk Foundation" acquired full ownership of Novo A/S. Both "Novo Nordisk" and "Novozymes A/S" were taken over by Novo A/S, which now has a majority stake in both companies (Fuerteset al., 2020). The enzymes division of Novo Nordisk A/S was leased to Novozymes A/S while Novo Nordisk remained to concentrate on pharmaceutical goods and services. Novo Nordisk became a major pharmaceutical firm in the field of diabetes treatment in the decade after the demerger.

Discussion of a Range of Strategic Issues from Different Perspectives

Drug Pricing Issues

Novo Nordisk, the world's biggest insulin maker, has been confronted with a new set of complex pricing issues. Lars Sorensen, one of the company's senior executives, has expressed concern about the company's inexorable expansion. No matter how much attention is focused on this problem today, Sorenson is certain that as obesity becomes a worldwide pandemic, more and more individuals in developed and developing countries alike will suffer the type 2 diabetes condition for which he is creating new medicine. With regard to insulin prices, Sorensen and his colleagues at Novo Nordisk are at loggerheads with each other (Clark, 2020). Funding agencies worldwide are continuously battling over what constitutes a reasonable price for these life-saving medications. “A new spiral office building influenced by the insulin molecule is now under development at the drugmaker's headquarters in Bagsvaerd, outside of Copenhagen, where Sorensen said pricing would be hard".

Healthcare reform in the United States and the consolidation of the distribution chain will make pricing difficult in Europe, and it will be difficult in the United States as well. When it comes to an increase in revenue, the majority of Novo Nordisk's rivals only hope to reach the single-digit percentage mark (O. Nyumbaet al., 2018). Sorensen and others had set lofty targets for their organization, but their outcomes did not meet those standards; this triggered a warning flag that earnings would only rise in the single digits in 2014.

Investors who have purchased into Novo because of its consistent, long-term growth are likely to be alarmed if this happens. Novo's sales growth is "always prudent" and "still there, alive and kicking," with the company's goals set on a 15 percent profit increase. He concedes, however, that the FDA's decision to postpone the authorization of the new long-acting insulin medication Tresiba has made it more difficult to expand the Nordic area (Fu and Hwang, 2018). "The FDA's delay in approving Novo Nordisk's new insulin U300 and Eli Lilly's non-insulin based diabetic medicine Victoza threatens Novo Nordisk's position as the market's favorite".

Serious Safety Issue Forces Novo Nordisk To Hit Pause

One mid-stage and two late-stage trials of Novo Nordisk's bleeding disorder medicine concizumab have been discontinued due to the discovery of blood clots in certain patients. In recent years, the Danish pharmaceutical company, better recognized for its diabetes trademark, has been expanding its haemophilia business in response to the rising demand for the bleeding disorder. An R&D partnership with Bluebird Bio and the recent approval of its haemophilia A medication Esperoct are examples of this. Hemophilia medicine Concizumab has already been halted in two phases 3 studies and one phase 2 study, despite its importance to the company's haemophilia pipeline (Adams, 2020). Patients with both haemophilia A and B were included in the study, regardless of whether they had an antagonist. Three patients in the continuing phase 3 study had non-fatal thrombotic events, according to a short statement released by the biopharma. Neither Novo Nordisk nor an external "Data Monitoring Committee" had reached any conclusions yet in their assessment of the events' importance to the program's continued existence.

Novo Nordisk Announces Supply Challenges for Wegovy® In The US

Because of this, Novo Nordisk expects that it will not be able to satisfy the request in the United States in the first half of 2022, and that very few new patients would be able to begin therapy. Wegovy® patients who have already begun therapy are Novo Nordisk's first priority. In the second half of 2022, Novo Nordisk expects to be able to fulfill US demand for its insulin products (Novo Nordisk A/S, 2021). The financial prognosis for 2021 will not be affected by the current supply issues. "On the 2nd of February 2022, Novo Nordisk will disclose its full-year 2021 results and provide a financial prognosis for that year".


Political Factors

There is no denying the fact that a stable political system for Nova Nordisk is the key to expanding and growing substantially in the market (Yusop, 2018). Novo Nordisk is a global healthcare company that operates its various business operations in different countries and if any changes in government policies of any country can either affect or assist the business to grow and expand in the market. The countries with high taxes can impact the prosperity of Novo Nordisk in terms of profit generation which is directly linked with the success of the organization.

Economical Factors

The economical factors such as customer spending trends, interest rate, foreign exchange rate, inflation, condition of the labor market, etc are all crucial for the Novo Nordisk (Chowdhury, and Nazmul, 2021). Being a multinational company, they cannot neglect these factors. A country with a good economic condition will always be a successful place for business operations and prosperity. The economies which are growing open up a portal of new opportunities for the company like Novo Nordisk. The consumer spending trend is also important because higher the spending of a customer means the customers are willing to spend more on commodities such as different insulin from Novo Nordisk.

Societal Factors

The rising popularity among social media and e-commerce is heavily promoting the online way of shopping in which people are being more interested in buying from online sources especially the new and younger generations of the country (Rita, Oliveira, and Farisa, 2019). This is a fact that the younger section of the country is leaning more towards using the online store more than the older generation of the country. Each society has different culture including different norms, people's attitudes or behavior, etc.

Technological Factors

To keep up with the technological advances, Novo Nordisk is hugely investing in its Research & Development (Alam, Uddin, and Yazdifar, 2019). These R&D investments have huge importance as they enable the company to overcome the various changes in the market as well as challenges. Disruptive Technologies is also the key for Novo Nordisk in terms of the prosperity of the business. The disruptive technologies will aid the company to make suitable technological changes according to the need of the market and trends.

Environmental Factors

The environmental factors refer to the environmental factors which cannot be controlled instead the company has to make flexible changes to sustain its business model (Yusop, 2018). The pollution is rising and the environmental hazards are rising with it as well, the recycling and the management of waste is one of the keys to overcoming the environmental problems. Many countries in the world have some of the strict policies regarding environmental protection. Novo Nordisk can get a huge benefit from investing in renewable technologies for the sustainable future of Novo Nordisk.

Legal Factors

In order to even start the business, there is a strong need to follow the policies and rules of the country in which the business is operating. The law regarding protecting the employee and the labor is a necessity for Novo Nordisk to follow as various countries have these legal frameworks (Shtal, et al., 2018). Another law regarding "Consumer Protection Law" is designed to protect the customer or consumer from being exploited by different exploitative companies. These are the factors that Novo Nordisk should follow to conduct business ethically and fairly.

PESTEL Analysis of Novo Nordisk

Figure 1: PESTEL Analysis of Novo Nordisk

(Source: Yusop, 2018)

Porter’s Five Forces Analysis

Porter's Five Forces of Novo Nordisk

Figure 2: Porter's Five Forces of Novo Nordisk

(Source: Centobelliet al., 2020)

Porter’s Value Chain Analysis of Novo Nordisk

Primary Activities

Inbound Logistics

There is a strong need of having a quality relationship between suppliers and Novo Nordisk in terms of receiving, storing, and distributing the commodity. To evaluate the inbound logistics of Novo Nordisk's business operations necessitates for the company to concentrate on the various elements of transforming the raw material to the finished commodity (Jones, Demirkaya, and Bethmann, 2019). These inbound logistics assist Novo Nordisk to increase the productivity of the company and it also ensures the prosperity of the business.

Outbound Logistics

This logistics refers to the activities which include delivery of the different commodity to the end-user i.e. customer through various channels of distribution. This outbound logistics can enable Novo Nordisk to evaluate and make flexible changes in order to attain the competitive advantages which can result in the prosperity of the business (Simpson, et al., 2020). Outbound Logistics are very important for the business because if the logistics of different commodities are not timely managed with poor costing, late delivery results in an impact on Novo Nordisk.

Marketing and Sales

The marketing and the sales department of Novo Nordisk is the crucial component for selling the variety of insulin to the end-user i.e. customers or consumers (Jones, Demirkaya, and Bethmann, 2019). Novo Nordisk can produce some of the highest quality of insulin but if there is no proper implementation of marketing and sales of the commodity then the commodity cannot reach the customer or consumer and it can result in the failure of the company.

It also contributes to the development of loyalty among the customers. In this 21st century, the majority of the customer or consumer prefers after-sales service for their every purchase (Shokouhyar, Shokoohyar, and Safari 2020). The company that doesn't provide these before sales and after-sales services results in damaging the reputation of the brand.

Secondary Activities

Firm infrastructure
Effective organizational infrastructure aid Novo Nordisk to improve the whole value chain system and it also assists Novo Nordisk to regulate the activities regarding infrastructure such as “Overhead Costs”. The quality assurance, legal factors, financing the operations, planning, and strategic planning takes place in the organizational infrastructure (Jones, Demirkaya, and Bethmann, 2019).

Human resource management
Human resource management is an important part of any company in the entire globe. Novo Nordisk evaluates the different components of HRM involving the aspects such as training, recruiting process, selection process, performance evaluation, etc (Michael, 2019). The HRM enable Novo Nordisk in order to overcome the various competitive factor due to proper motivation, proper skill of the workforce from the proper implementation of Human Resource Management.

Technology development
There are no activities regarding the value chain that can survive and prosper without the need for technological advancements. The incorporation of production of the commodity, distributing the commodity, marketing and selling the commodity to the end-user, and Novo Nordisk can get a huge benefit from the technological advancements (Jones, Demirkaya, and Bethmann, 2019).

The last element in porter's value chain analysis enables Novo Nordisk in the procurement of different inputs such as machinery, raw materials, etc which are required for making and reaching the end stage of production i.e. Finished Goods (Jones, Demirkaya, and Bethmann, 2019). Novo Nordisk must choose the right way of procuring the different inputs in order to improve the Inbound or outbound value chain.

Porter’s Value Chain Analysis of Novo Nordisk

Figure 3: Porter’s Value Chain Analysis of Novo Nordisk

(Source: (Jones, Demirkaya, and Bethmann, 2019))

Resource-Based View

Tangible Resources

Including all places owned or leased by Novo Nordisk A/S for holding manufacturing units and for storage, the land is a physical resource.

For Novo Nordisk A/S, all of the firm's materials for manufacturing and packaging, as well as other operating needs, is a physical resource.

All of Novo Nordisk A/S's raw materials and other packaging materials are included in the company's materials.

All materials and goods that are utilized and necessary for enabling the packaging and manufacturing operations of Novo Nordisk A/S are included in the company's supply.

Competitors might easily see Novo Nordisk A/S's physical facilities as a valuable resource.

Novo Nordisk A/S allocates power resources, such as electricity, to its factories, as well as the land and buildings on which such facilities are located.

Intangible Resources

Brand Reputation
The reputation of Novo Nordisk A/S as a brand is based on the company's long history of providing high-quality goods and earning the confidence of its customers.

Intellectual Property
Intellectual property rights protect Novo Nordisk A/S's manufacturing techniques and product originality, preventing competitors from duplicating or accessing its unique product mix, and product components and inputs.

Patents and Copyright
As a result of its R&D operations, Novo Nordisk A/S has patents and copyrights that cover not only its manufacturing techniques and product composition but also its efforts to develop and strengthen its products.

The long-term goodwill for Novo Nordisk A/S is based on the brand's reputation and customer experience, which have been created over time via the company's history.

Trade Names
The company's trade name is also an intangible asset since it cannot be adopted or imitated by other competitors.

Customer Experience
The brand initiatives and offers, as well as marketing efforts, of Novo Nordisk A/S, deliver a singular client experience.

Patented Technology, Computer Software, Databases and Trade Secrets
Because of its trade secrets, which include a secret formula for product competitiveness, Novo Nordisk A/S also has a huge customer following and is successful in its operations and companies (Para-González, Jiménez-Jiménez, and Martínez-Lorente, 2018). This includes customers who are loyal and make repeated purchases from the company.

Video and Audio-Visual Material
Novo Nordisk A/S's intangible assets include all of its marketing materials, including all video and audio-video content.

Customer Lists
In order to cater to a wide range of customer segments and demographics, Novo Nordisk A/S offers a wide range of product lines and offerings.

Licencing, Royalty, and Standstill Agreements
Each of Novo Nordisk A/S's consumer markets has a separate license, royalty, and standstill arrangement.

Import Quotas
Several nations have entered into strategic agreements with Novo Nordisk A/S for import quotas.

Franchise Agreements
For both manufacturing and distribution, Novo Nordisk A/S has distinctive franchise arrangements with trusted partners in various sectors.

Customer and Supplier Relationship
There are no other companies like Novo Nordisk A/S in the world.

Marketing Rights
Companies' marketing rights in various nations are determined by factors such as the firm's operations leadership, strategic direction, compliance with the law, and past.

Heterogeneous and Immobile Characteristics of Resources

Since different companies have different levels of human resources operations, training, and talent, heterogeneity is assumed by the RBV (Para-González, Jiménez-Jiménez and Martínez-Lorente, 2018). To prevent developing the features of perfect competition, it's critical to maintain some degree of variety.

All of Novo Nordisk A/S's intangible resources are diversified and immobile(Schollet al., 2018). However, as long as rival companies continue to expand and develop their strategic plans, Novo Nordisk A/S's tangible resources will remain stationary and may be homogenous.

VRIO Analysis

Competitive Advantage
Having a competitive advantage means that Novo Nordisk A/S is in a better financial position because of the conditions or resources it has and controls (Schollet al., 2018). Using these resources and conditions, Novo Nordisk A/S has been able to surpass other companies in the key markets in various countries and to build a distinct client base with a strong desire for its unique product offers and high-quality goods.

Demonstration of Stakeholder Perspective

In the year of 1960, Novo Nordisk once faced critical criticism from the stakeholder. During that time, Novo Nordisk started producing enzymes via the different processes of production of breaking down the microorganism. However, these processes used for breaking down the microorganism involved “genetically engineered microorganisms” which resulted in the establishment of a new line of products i.e. enzymes (IBS Center for Management Research, 2012). On the flip side, various environmental organizations and political campaigners claimed that the Enzymes are causing allergies to the skin and also claimed it is a communicable allergy. The company also got critically condemned by various patients and Non-Governmental organizations for the withdrawal decision of insulin products from Greece.

Reflection on own Role in Developing and Implementing Strategy within the Workplace

Novo Nordisk is the company that is doing most of the things in the right way. All the criticism against Novo Nordisk was handled effectively by the company itself. To counter the criticisms regarding sustainable pricing, the company came up with a new policy to increase their existence in the developing countries and also developed some new medicines for countering the diseases. The company adopted a new pricing policy in which the company started supplying insulin to the different poorest companies in the world. Novo Nordisk has a 47 percent share in the market and that makes it a market leader. The market of insulin is dominated on an oligopoly basis in the market. The company is on the right path and doing everything right and if the company keeps growing and expanding in this way then it will results in the success of the business.


In this way, it is concluded that Novo Nordisk significantly operates its business in the market. During this, the organization proficiently utilizes and implements potential approaches and strategies within the workplace environment in order extensively develop its business operations and competitiveness.

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