Perrigo Company plc SWOT and PESTLE Analysis

Strength

1. Continuous acquisitions and divestitures for robust portfolio reconfiguration:Historically Perrigo is known for its self-care segment. Over the years it had developed capabilities in prescription category. However, as the profitability related to the competency of the company did not show significant improvement in this segment they are in the process of spinning off this segment. Perrigo recently, in fiscal 2019, completed acquisition ofRanir Global Holdings which is a well-known supplier of oral health related products. This integration will help the company to gain market share in the already growing oral health market segment. Similar acquisition of Dr. Fresh makes the company the fastest growing firm in the children’s oral healthcare. Emolium, Iwostin and Loxon were acquired from Sanofi which add to the existing robust eastern Europe business in dermatology, skincare and hair loss treatment. All such proceedings,mirror the firms highly dynamic structure that can catapult it to a market leader in its segments.

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Weakness

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Opportunity

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Threat

1. Tax overhang allegations are soiling its reputation: In December 2018 Perrigo received a notice of amendment assessment for tax underpayment to the Irish government. The news was negatively taken by investors such that share prices slided by 30%. This was regarding a tax payment by the company’s subsidiary Elan Pharma, with respect to a transaction with Biogen over multiple sclerosis drug. A tax of $1.9 billion was avoided as per the authorities in Ireland. The company has been dragged into legal proceedings since then. Currently the decision is pending with the Tax Appeals Commission. The hearings were scheduled in November 2021. If the company has to pay this tax then it will face significant losses that may remain accumulated for years to come. It will also deteriorate the company’s image among investors making it difficult to manage any further expansion plans.

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Political

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Economic

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Social

1. Consumers going for value for money and store brands: There is an increased demand for value for money and store-based products during the pandemic. Consumers are not showing an inclination towards national brands. This is mainly because of the disruption in the supply chain which has led the consumers to try out local brands, private labels or the brands that are available easily in stores. Specially the national brands charge a premium for their quality and branding; But the pandemic has tightenedpurse strings and the consumers are hesitant to pay for this. There is an increased trend of reduction in consumption of luxury items due to job insecurity. Consumers may also continue to use these brands post covid. Perrigo depends on the promotion by retailers and distributors. The marketing spend of the company has been lower compared to large global firms. But its robust distribution network and value for money products are helping it sustain and thrive in the pandemic.

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Technological

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Legal

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Environmental

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