General Electric's Acquisition of Amersham PLC SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of General Electric's Acquisition of Amersham PLC
In September 2003, Jeffrey Immelt, CEO of General Electric, must evaluate a final proposal for GE to acquire Amersham plc, the leading producer of contrast agents used in medical diagnostics. The case permits the valuation of Amersham based on peer firms, comparable transactions, and recent trading history. But the focus of analysis is on the robustness of Amersham's intellectual property (IP). On close examination, the company's IP position is weaker than it appears, given recent patents filed by competitors. The economic impact of these IP challenges may be tested in the case of the company's leading product, Visipaque, for which the case gives cash flows. Discounted cash flow analysis reveals great sensitivity to the remaining years of effective patent life. A key lesson underscores the importance of due-diligence research on a firm's IP position.
Authors :: Paul Simko, Robert F. Bruner, Mary Margaret Frank, Marc Goldstein
Swot Analysis of "General Electric's Acquisition of Amersham PLC" written by Paul Simko, Robert F. Bruner, Mary Margaret Frank, Marc Goldstein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amersham Ip facing as an external strategic factors. Some of the topics covered in General Electric's Acquisition of Amersham PLC case study are - Strategic Management Strategies, Intellectual property, Mergers & acquisitions and Organizational Development.
Some of the macro environment factors that can be used to understand the General Electric's Acquisition of Amersham PLC casestudy better are - – supply chains are disrupted by pandemic , increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, central banks are concerned over increasing inflation, geopolitical disruptions, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of General Electric's Acquisition of Amersham PLC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in General Electric's Acquisition of Amersham PLC case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amersham Ip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amersham Ip 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 General Electric's Acquisition of Amersham PLC can be done for the following purposes –
1. Strategic planning using facts provided in General Electric's Acquisition of Amersham PLC case study
2. Improving business portfolio management of Amersham Ip
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Amersham Ip
Strengths General Electric's Acquisition of Amersham PLC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amersham Ip in General Electric's Acquisition of Amersham PLC Harvard Business Review case study are -
High switching costs
– The high switching costs that Amersham Ip 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 lead change in Organizational Development field
– Amersham Ip is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Amersham Ip in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Amersham Ip in the sector have low bargaining power. General Electric's Acquisition of Amersham PLC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amersham Ip to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Amersham Ip has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study General Electric's Acquisition of Amersham PLC - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Amersham Ip is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Amersham Ip is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in General Electric's Acquisition of Amersham PLC Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Amersham Ip has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amersham Ip to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Amersham Ip is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Amersham Ip is one of the leading recruiters in the industry. Managers in the General Electric's Acquisition of Amersham PLC are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Amersham Ip has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amersham Ip 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.
Diverse revenue streams
– Amersham Ip is present in almost all the verticals within the industry. This has provided firm in General Electric's Acquisition of Amersham PLC 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.
Analytics focus
– Amersham Ip is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Paul Simko, Robert F. Bruner, Mary Margaret Frank, Marc Goldstein can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Amersham Ip in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses General Electric's Acquisition of Amersham PLC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of General Electric's Acquisition of Amersham PLC are -
High cash cycle compare to competitors
Amersham Ip has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Amersham Ip is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study General Electric's Acquisition of Amersham PLC can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study General Electric's Acquisition of Amersham PLC 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 Amersham Ip 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Amersham Ip has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Amersham Ip has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Amersham Ip even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study General Electric's Acquisition of Amersham PLC, is just above the industry average. Amersham Ip 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.
No frontier risks strategy
– After analyzing the HBR case study General Electric's Acquisition of Amersham PLC, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Amersham Ip is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Amersham Ip needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amersham Ip to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul Simko, Robert F. Bruner, Mary Margaret Frank, Marc Goldstein suggests that, Amersham Ip is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 Amersham Ip supply chain. Even after few cautionary changes mentioned in the HBR case study - General Electric's Acquisition of Amersham PLC, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amersham Ip vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study General Electric's Acquisition of Amersham PLC, in the dynamic environment Amersham Ip has struggled to respond to the nimble upstart competition. Amersham Ip has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities General Electric's Acquisition of Amersham PLC | 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 General Electric's Acquisition of Amersham PLC are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amersham Ip is facing challenges because of the dominance of functional experts in the organization. General Electric's Acquisition of Amersham PLC case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amersham Ip 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, General Electric's Acquisition of Amersham PLC, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Amersham Ip 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.
Developing new processes and practices
– Amersham Ip can develop new processes and procedures in Organizational Development 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.
Loyalty marketing
– Amersham Ip has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Amersham Ip can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. General Electric's Acquisition of Amersham PLC 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amersham Ip in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amersham Ip can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Amersham Ip has opened avenues for new revenue streams for the organization in the industry. This can help Amersham Ip to build a more holistic ecosystem as suggested in the General Electric's Acquisition of Amersham PLC case study. Amersham Ip can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amersham Ip 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 Amersham Ip to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Amersham Ip to increase its market reach. Amersham Ip will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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. Amersham Ip can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amersham Ip can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats General Electric's Acquisition of Amersham PLC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study General Electric's Acquisition of Amersham PLC are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Amersham Ip in the Organizational Development sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Amersham Ip 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. Amersham Ip can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amersham Ip 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 General Electric's Acquisition of Amersham PLC .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amersham Ip with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Amersham Ip can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Amersham Ip high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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. Amersham Ip needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Regulatory challenges
– Amersham Ip 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 Organizational Development industry regulations.
Increasing wage structure of Amersham Ip
– 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 Amersham Ip.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study General Electric's Acquisition of Amersham PLC, Amersham Ip may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Amersham Ip in the Organizational Development industry. The Organizational Development 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.
Weighted SWOT Analysis of General Electric's Acquisition of Amersham PLC 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 General Electric's Acquisition of Amersham PLC 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 General Electric's Acquisition of Amersham PLC 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 General Electric's Acquisition of Amersham PLC 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 General Electric's Acquisition of Amersham PLC 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 Amersham Ip needs to make to build a sustainable competitive advantage.
