The last decade has been highly disappointing for investors in GlaxoSmithKline (LSE: GSK). That’s because the pharmaceutical major’s share price has fallen by 10% during the period, with the loss of sales on blockbuster drugs, allegations of bribery and a general lack of sales as well as earnings growth hurting investor sentiment in the company.

Despite this, the next 10 years could prove to be much better for GlaxoSmithKline and it has the potential to comprehensively outperform the wider index moving forward.

A key reason for that is the changes it’s making to its business model. GlaxoSmithKline is seeking to become leaner and more efficient in order to improve margins and reduce the pressure somewhat on top-line growth. For example, it’s on target to realise over £1bn in cost savings, with job losses and a reorganisation being central parts of the company’s plan.

Furthermore, GlaxoSmithKline plans to freeze its dividend payments for the next few years that should provide it with additional cash resources through which to reinvest for future growth. And with the company delivering an internal rate of return on R&D of 13% in 2015, it appears to offer highly profitable opportunities for the long term.

Additionally, GlaxoSmithKline’s pipeline continues to hold considerable long-term appeal, with its HIV division ViiV Healthcare in particular offering the potential for multiple blockbuster drugs. And with GlaxoSmithKline having a well-diversified pipeline that has the potential to file up to 20 assets with regulators over the next five years, it seems to offer a relatively low risk-outlook when compared to a number of its peers, many of which are more reliant on a small number of prospects.

Changes at the top

Although GlaxoSmithKline’s future is less certain now that its CEO, Sir Andrew Witty, has decided to step down, the company appears to be moving in the right direction regarding its strategy. Certainly, there ‘s the potential for a modest weakening in investor sentiment in the short run as the market prices in the potential for a refreshed business plan under new management. But GlaxoSmithKline appears to possess the financial firepower and economic moat through which to deliver excellent capital gains in the long run.

Having disappointed on such a large scale in the last 10 years, its shares now trades on a price-to-earnings (P/E) ratio of just 16.4. For a major pharmaceutical company that’s expected to return to core earnings growth in the current year, this seems to be rather low. Furthermore, with GlaxoSmithKline having a yield of around 5.7%, it remains a highly appealing income play that could become increasingly popular as a loose monetary policy looks set to stay in place during the coming years.

Additionally, GlaxoSmithKline also offers considerable defensive prospects, with its financial performance being less dependent on the macroeconomic outlook than is the case for most of its index peers. Therefore, if the FTSE 100 remains volatile then GlaxoSmithKline could become more popular among increasingly risk-averse investors over the coming months and years.

So, while the last decade has been tough, the next one could be far more profitable for investors in GlaxoSmithKline. This makes it a very appealing purchase for the long term.

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Peter Stephens owns shares of GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.