Internal Analysis of Genentech

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Understanding Genentech activities and how the organization copes with the changing environment requires an in-depth analysis of its management and operative effectiveness. Notably, under the leadership of the new vice presidents of the Medical Unit (M.U), Maurico Silva de Lima, the enterprise has recorded significant changes that are not only aimed at providing improved health care but also having a positive impact in the health sector through enhancing neuroscience, cardiovascular metabolism and developing quality medicines. The study will assess both internal and external aspects of this organization and provide formulation and implementation strategies that will support the long-term development of the institution.

External Analysis

External factors include those aspects that have a significant impact on the firm, but the institution has little or no control over them.

PESTEL Analysis

Political. The government is now increasingly involved in the health sector and investigates the management, the authenticity of medicines manufactures and its health factors.

Economical. The changing face of the economy is continually limiting the firm’s ability to retain its employees and getting enough funds to finance their products. This has greatly affected employees’ motivation at work due to the high uncertainty levels.

Social. The company reduced the use of traditional medicine and concentrated on modern methods of healthcare development. It has thus changed the perception of many individuals on man’s ability to treat chronic complications (Bahrami & Evans, 2016). Their mission that involves, discovering, develop, manufacture and commercialization of medicines guides their approach to solving health issues using high-quality products.

Technology. The company has heavily invested in modern technology that not only aids them in increasing their level of efficiency but also remaining competitive in the market. Moreover, these machines have enabled the institution to initiate different projects that may in the long run help in reducing constant failures.

Ecological. The firm takes precautionary measures to ensure they do not contribute to environmental degradation through ensuring safe and standardized methods of production. It also engages the U.S. food and drug administration (FDA) to approve the safety of their products before releasing it to the market (Bahrami & Evans, 2016).

Legal. As a legally registered entity and a licensed drug manufacturing institution, Genentech has to protect its brand name by producing high-quality products. They also have to conform to the policies by agencies such as FDA.

Industry Environment

Five Forces Analysis

Threat of entry. There exists the low risk of new entrants in the industry due to the high risk involved in the production and distribution of medicine as well as the high initial cost of operation.

Power of suppliers. Genentech has its production structures and thus do not depend on suppliers to promote production.

Power of buyers. Traditionally, the buyer's power in the industry has been low, but with the increasing reforms proposed by the company and with agencies such as FDA, purchasers’ power has increased over the years.

Threats of new substitutes. Due to the internal challenges facing Genentech including lack of enough capital, the risk of substitutes has increased immensely from other pharmaceutical companies that have the same technology.

Competitive levels. The company faces stiff competition from other companies in the pharmaceutical industry that produces alternative medicines.

Structure, Conduct, Performance (SCP) strategy

Structure. Genentech has 1200 staffs that are assigned different responsibilities that including research and development of medicines. Moreover, it has a centralized organizational structure with Silva de Lima as the head of the medical unit.

Conduct. The organization is cautious with the types of projects it launches and ensures it maximizes its capacity to invest in providing maximum output in these ventures. It also emphasizes research and development as it helps it in introducing new and efficient medicines in the market.

Performance. Genentech evaluates the performance of all its staffs and reshuffles them once they finish a project. The techniques help in value creation and ensure that employee shows their full potential at work. Moreover, it helps the management to assess the profitability and the costs of the institution.

Internal Analysis

VRIO Analysis

Resource and capability





Impact on competitive advantage

Strong management techniques






Skilled man power





Competitive parity

High level technology






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Temporary competitive advantage

Table 1

The table provides a brief explanation of the resources and capabilities of Genentech and how it affects their competitive advantage. The company enjoys a high level of competitiveness from factors such as strong management policies and approaches, skilled employees, high level of technology and efficient research and technology methods. For example, the management of the institution ensures that every regulation implemented does not consider only the firm's interest but also those of its stakeholder including employees and customers. For instance, the new vice president organizes meeting that incorporates all staffs including those leaving to appreciate their achievements and to develop a way forward.

SWOT Analysis

Strengths. Genentech enjoys a high level of innovation and competency from the high number of skilled professionals and competent management team. Moreover, its effective research and development team enables the firm to introduce high-quality products on the market.

Weaknesses. Inability to develop mechanisms that could help in retaining its employees. This leads to high job insecurity in the firm that limits its competitiveness in the industry.

Opportunities. The firm invests heavily in human capital and technology that explains its ability to develop high-quality medicines. The firm specializes in different medical areas including neuroscience and cardiovascular metabolism also enables it to serve a wider market in the industry

Threats. The reducing rate of success on its projects reduces the company’s ability to serve its customers and also remaining competitive in the market.


Strategy formulation in Genentech Company requires proper analysis of the organization internal capabilities. Since the institution operates in a highly competitive and sensitive industry, it has to develop both short and long-term objectives, set achievable targets, and to establish a proper performance analysis and employee retention approaches. The management of the company should ensure that they develop frameworks that would utilize the existing resources effectively and boost employees’ morale.


Silva de Lima considers team management and initiating togetherness in the firm may play a great part in initiating strategy implementation process. Building a new team under different leadership may promote an advanced method of operation and promote innovativeness in handling various aspects of the institution including research and development. Additionally, the management should develop a well-structured performance appraisal method that will motivate its employees to increase their productivity.


The new strategies introduced by Maurico Silva de Lima, present a long-term plan that will enable the company to increase both its productivity and competitiveness in the market. Notably, initiating proper team management methods not only helps in monitoring performance but also enhances the firm’s ability to handle different complications. Through conducting adequate market research, Genentech would be able to set achievable objectives and allocate its resources effectively.


Bahrami, H., & Evans, S. (2016). Flexibility at Genentech: Developing Versatile Domain Experts and Deploying Flexible Resources at One U.S. Medical Affairs Unit. doi:10.4135/9781526410832

January 19, 2024

Business Economics



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