Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation
Orchid Chemicals & Pharmaceuticals Limited (Orchid) is an Indian pharmaceutical company which began operations in 1994. Over a span of 10 years, the turnover of this company has increased from US$11 million to US$153 million. The company's profit after tax registered a five-fold increase, from US$1.3 million to US$6.8 million, in the corresponding period. Early success was a combination of pricing flexibility, lower production cost, and business opportunities in unregulated markets. Orchid decided to explore opportunities for the manufacture of generic drugs in the regulated markets and formulations in the domestic market. Diversification to basic research was also considered. Cooperation and joint ventures were the primary route to expand and explore new molecule discovery. By 2005, Orchid was no longer a single-product company, its business had widened to multiple products in bulk, formulations, and generics, in both regulated and unregulated markets. Orchid was making its presence felt in its novel drug delivery systems and new drug development processes. In 2005, Orchid faced several challenges related to financial leverage and risks, leadership, managerial challenges associated with joint ventures, balancing the new business model, setting global trends in being a pioneer in the industry, addressing shareholders' concerns, and evolving an appropriate organization culture and process.
Swot Analysis of "Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation" written by Ravi Ravichandran, Ankur Roy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Orchid Formulations facing as an external strategic factors. Some of the topics covered in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation case study are - Strategic Management Strategies, Supply chain and Organizational Development.
Some of the macro environment factors that can be used to understand the Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation casestudy better are - – increasing transportation and logistics costs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, technology disruption, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
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%, etc
Introduction to SWOT Analysis of Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orchid Formulations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orchid Formulations 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation case study
2. Improving business portfolio management of Orchid Formulations
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 Orchid Formulations
Strengths Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orchid Formulations in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation Harvard Business Review case study are -
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Orchid Formulations digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Orchid Formulations 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.
Cross disciplinary teams
– Horizontal connected teams at the Orchid Formulations 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.
Successful track record of launching new products
– Orchid Formulations has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Orchid Formulations 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.
Strong track record of project management
– Orchid Formulations is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Orchid Formulations has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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.
High brand equity
– Orchid Formulations has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Orchid Formulations to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Orchid Formulations is one of the leading recruiters in the industry. Managers in the Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Orchid Formulations
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Orchid Formulations does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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.
Innovation driven organization
– Orchid Formulations is one of the most innovative firm in sector. Manager in Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Orchid Formulations in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Orchid Formulations 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation, it seems that the employees of Orchid Formulations don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation HBR case study mentions - Orchid Formulations 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.
Aligning sales with marketing
– It come across in the case study Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation can leverage the sales team experience to cultivate customer relationships as Orchid Formulations is planning to shift buying processes online.
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 Orchid Formulations supply chain. Even after few cautionary changes mentioned in the HBR case study - Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orchid Formulations vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Ravi Ravichandran, Ankur Roy suggests that, Orchid Formulations 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 star products
– The top 2 products and services of the firm as mentioned in the Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Formulations has relatively successful track record of launching new products.
Products dominated business model
– Even though Orchid Formulations 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 - Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Orchid Formulations 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.
Increasing silos among functional specialists
– The organizational structure of Orchid Formulations is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Orchid Formulations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Orchid Formulations to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation, 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.
Need for greater diversity
– Orchid Formulations 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation | 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Orchid Formulations is facing challenges because of the dominance of functional experts in the organization. Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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.
Building a culture of innovation
– managers at Orchid Formulations 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 Organizational Development segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Orchid Formulations 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Orchid Formulations 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. Orchid Formulations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Orchid Formulations 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.
Manufacturing automation
– Orchid Formulations 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Orchid Formulations 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 Orchid Formulations to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Orchid Formulations 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Orchid Formulations can use these opportunities to build new business models that can help the communities that Orchid Formulations operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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 Orchid Formulations in the consumer business. Now Orchid Formulations 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. Orchid Formulations can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Orchid Formulations can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Orchid Formulations can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation are -
Increasing wage structure of Orchid Formulations
– 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 Orchid Formulations.
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. Orchid Formulations can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Orchid Formulations 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.
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 Orchid Formulations business can come under increasing regulations regarding data privacy, data security, etc.
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. Orchid Formulations 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. Orchid Formulations needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Environmental challenges
– Orchid Formulations 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. Orchid Formulations can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Orchid Formulations with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Orchid Formulations has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Orchid Formulations 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.
Shortening product life cycle
– it is one of the major threat that Orchid Formulations is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Orchid Formulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orchid Formulations 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation .
Weighted SWOT Analysis of Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Chemicals & Pharmaceuticals Limited: Managing the Value Chain Transformation 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 Orchid Formulations needs to make to build a sustainable competitive advantage.
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