Case Study Description of Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A)
In the early 1990s, Merck faced a series of challenges because of significant changes in its competitive and regulatory environment (e.g., growth in power of pharmaceutical buyers like managed care organizations led to price pressures and President Clinton's review of the entire U.S. health-care industry). The case describes the company under its previous CEO, and primarily under Ray Gilmartin, the new CEO. Discusses the strategic, organizational, cultural, and management challenges that Merck faced, as well as Gilmartin's change program from 1994 to 1998, which was aimed at helping Merck address these issues.
Swot Analysis of "Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A)" written by Michael Beer, Perry L. Fagan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merck Gilmartin's facing as an external strategic factors. Some of the topics covered in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) case study are - Strategic Management Strategies, Competitive strategy, Cross-cultural management, Globalization, Organizational culture, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is backlash against globalization, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merck Gilmartin's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merck Gilmartin's 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) can be done for the following purposes –
1. Strategic planning using facts provided in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) case study
2. Improving business portfolio management of Merck Gilmartin's
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 Merck Gilmartin's
Strengths Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merck Gilmartin's in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Merck Gilmartin's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Merck Gilmartin's 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Merck Gilmartin's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Merck Gilmartin's is present in almost all the verticals within the industry. This has provided firm in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Merck Gilmartin's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merck Gilmartin's 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.
Analytics focus
– Merck Gilmartin's 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 Michael Beer, Perry L. Fagan 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.
Low bargaining power of suppliers
– Suppliers of Merck Gilmartin's in the sector have low bargaining power. Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merck Gilmartin's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Merck Gilmartin's 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Merck Gilmartin's is one of the most innovative firm in sector. Manager in Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Organizational Development field
– Merck Gilmartin's 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 Merck Gilmartin's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Merck Gilmartin's is one of the leading recruiters in the industry. Managers in the Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck Gilmartin's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) can leverage the sales team experience to cultivate customer relationships as Merck Gilmartin's is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Beer, Perry L. Fagan suggests that, Merck Gilmartin's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Merck Gilmartin's 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.
Lack of clear differentiation of Merck Gilmartin's products
– To increase the profitability and margins on the products, Merck Gilmartin's needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A), 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.
Slow decision making process
– As mentioned earlier in the report, Merck Gilmartin's 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. Merck Gilmartin's 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.
Slow to strategic competitive environment developments
– As Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) HBR case study mentions - Merck Gilmartin's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Merck Gilmartin's 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.
Low market penetration in new markets
– Outside its home market of Merck Gilmartin's, firm in the HBR case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Merck Gilmartin's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) | 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) are -
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 Merck Gilmartin's in the consumer business. Now Merck Gilmartin's can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Merck Gilmartin's 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
– Merck Gilmartin's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merck Gilmartin's 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 Merck Gilmartin's to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Merck Gilmartin's can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merck Gilmartin's 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.
Creating value in data economy
– The success of analytics program of Merck Gilmartin's has opened avenues for new revenue streams for the organization in the industry. This can help Merck Gilmartin's to build a more holistic ecosystem as suggested in the Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) case study. Merck Gilmartin's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Merck Gilmartin's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merck Gilmartin's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Merck Gilmartin's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Merck Gilmartin's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merck Gilmartin's is facing challenges because of the dominance of functional experts in the organization. Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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.
Learning at scale
– Online learning technologies has now opened space for Merck Gilmartin's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merck Gilmartin's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merck Gilmartin's 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) .
Environmental challenges
– Merck Gilmartin's 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. Merck Gilmartin's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– Merck Gilmartin's 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.
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 Merck Gilmartin's business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Merck Gilmartin's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Merck Gilmartin's needs to keep up with the evolution of technology in the Organizational Development 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.
High dependence on third party suppliers
– Merck Gilmartin's 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Merck Gilmartin's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Merck Gilmartin's.
Stagnating economy with rate increase
– Merck Gilmartin's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merck Gilmartin's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Merck Gilmartin's 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.
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. Merck Gilmartin's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) 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 Merck Gilmartin's needs to make to build a sustainable competitive advantage.