Case Study Description of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation
This case asks students to identify and evaluate the merits of two factors that have led a buy-side analyst to conclude that an acquiring company is a high-risk investment: (1) the company's allocation of acquisition proceeds and (2) the quality of the target's intellectual-property (IP) portfolio. The acquirer's allocation of the acquisition cost of the target is quite different from that of one of the company's previous deals. Careful interpretation of each line item for both acquisitions yields insights into the value management seeks with the acquisition. An IP-quality report supplied by an independent IP consulting firm likewise raises a number of issues students should identify. The primary objectives of the case are to (1) introduce IP-quality concepts as they relate to a firm's patent portfolio, (2) understand the accounting basis for firms' purchase-price allocations in IP-intensive acquisitions, and (3) compare and contrast the risk implications of acquisitions of in-process portfolios of drug candidates with established products.
Authors :: Robert F. Bruner, Paul Simko, Mary Margaret Frank, Marc Goldstein
Swot Analysis of "Genmor Pharmaceuticals' Acquisition of Vascorex Corporation" written by Robert F. Bruner, Paul Simko, Mary Margaret Frank, Marc Goldstein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ip Acquisition facing as an external strategic factors. Some of the topics covered in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation case study are - Strategic Management Strategies, Intellectual property, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Genmor Pharmaceuticals' Acquisition of Vascorex Corporation casestudy better are - – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing energy prices,
there is increasing trade war between United States & China, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ip Acquisition, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ip Acquisition operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation can be done for the following purposes –
1. Strategic planning using facts provided in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation case study
2. Improving business portfolio management of Ip Acquisition
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ip Acquisition
Strengths Genmor Pharmaceuticals' Acquisition of Vascorex Corporation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ip Acquisition in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ip Acquisition are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Ip Acquisition in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ip Acquisition has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Ip Acquisition is present in almost all the verticals within the industry. This has provided firm in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Ip Acquisition has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ip Acquisition has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Ip Acquisition
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ip Acquisition does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Ip Acquisition has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Genmor Pharmaceuticals' Acquisition of Vascorex Corporation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ip Acquisition in the sector have low bargaining power. Genmor Pharmaceuticals' Acquisition of Vascorex Corporation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ip Acquisition to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Genmor Pharmaceuticals' Acquisition of Vascorex Corporation firm has clearly differentiated products in the market place. This has enabled Ip Acquisition to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Ip Acquisition to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Ip Acquisition has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Ip Acquisition is one of the leading recruiters in the industry. Managers in the Genmor Pharmaceuticals' Acquisition of Vascorex Corporation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Ip Acquisition digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ip Acquisition has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Genmor Pharmaceuticals' Acquisition of Vascorex Corporation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation are -
Skills based hiring
– The stress on hiring functional specialists at Ip Acquisition has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Ip Acquisition is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Ip Acquisition needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ip Acquisition to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Ip Acquisition, firm in the HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Ip Acquisition needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation, in the dynamic environment Ip Acquisition has struggled to respond to the nimble upstart competition. Ip Acquisition has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Ip Acquisition has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Genmor Pharmaceuticals' Acquisition of Vascorex Corporation should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Genmor Pharmaceuticals' Acquisition of Vascorex Corporation HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ip Acquisition has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation, is just above the industry average. Ip Acquisition needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ip Acquisition supply chain. Even after few cautionary changes mentioned in the HBR case study - Genmor Pharmaceuticals' Acquisition of Vascorex Corporation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ip Acquisition vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Ip Acquisition has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ip Acquisition 's lucrative customers.
Opportunities Genmor Pharmaceuticals' Acquisition of Vascorex Corporation | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation are -
Manufacturing automation
– Ip Acquisition can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ip Acquisition can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Genmor Pharmaceuticals' Acquisition of Vascorex Corporation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ip Acquisition in the consumer business. Now Ip Acquisition can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ip Acquisition can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ip Acquisition can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ip Acquisition can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ip Acquisition can use these opportunities to build new business models that can help the communities that Ip Acquisition operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Ip Acquisition can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Ip Acquisition can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Genmor Pharmaceuticals' Acquisition of Vascorex Corporation suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Ip Acquisition can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Learning at scale
– Online learning technologies has now opened space for Ip Acquisition to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Ip Acquisition can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ip Acquisition to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ip Acquisition to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ip Acquisition to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Genmor Pharmaceuticals' Acquisition of Vascorex Corporation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ip Acquisition.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ip Acquisition with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ip Acquisition business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Ip Acquisition needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Increasing wage structure of Ip Acquisition
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ip Acquisition.
Technology acceleration in Forth Industrial Revolution
– Ip Acquisition has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Ip Acquisition needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ip Acquisition in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ip Acquisition can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ip Acquisition needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ip Acquisition will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Ip Acquisition is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ip Acquisition needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ip Acquisition can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Genmor Pharmaceuticals' Acquisition of Vascorex Corporation is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Genmor Pharmaceuticals' Acquisition of Vascorex Corporation is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ip Acquisition needs to make to build a sustainable competitive advantage.
