Case Study Description of GlaxoSmithKline: Sourcing Complex Professional Services
Pharmaceutical company GlaxoSmithKline (GSK) uses an innovative new approach to procuring outside legal counsel: it replaces relationship-based selection and law firms' traditional time-based billing with data-driven decision making and an online reverse auction. In the case, GSK is hit with a potentially devastating suit and must hire a firm in time to respond. The recently hired managing attorney, Sophia Keating, grapples with GSK's approach. The GSK veterans assure her that the approach drives down costs and improves the quality of work by systematically increasing the rigor in the procurement process. Still skeptical, Sophia runs the process of systematically analyzing and comparing the competing firms' bids. This case also describes the process by which these tools were created and adopted. Beyond the implications for law firms and other service providers, lessons from this case are applicable for teaching about institutional change, procurement processes relevant to many fields, and how to increase rigor in typically informal business processes.
Authors :: Heidi K. Gardner, Silvia Hodges Silverstein
Swot Analysis of "GlaxoSmithKline: Sourcing Complex Professional Services" written by Heidi K. Gardner, Silvia Hodges Silverstein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gsk Rigor facing as an external strategic factors. Some of the topics covered in GlaxoSmithKline: Sourcing Complex Professional Services case study are - Strategic Management Strategies, Change management, Collaboration, Competition, Marketing, Pricing, Supply chain and Organizational Development.
Some of the macro environment factors that can be used to understand the GlaxoSmithKline: Sourcing Complex Professional Services casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, technology disruption, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, wage bills are increasing,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of GlaxoSmithKline: Sourcing Complex Professional Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GlaxoSmithKline: Sourcing Complex Professional Services case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gsk Rigor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gsk Rigor 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 GlaxoSmithKline: Sourcing Complex Professional Services can be done for the following purposes –
1. Strategic planning using facts provided in GlaxoSmithKline: Sourcing Complex Professional Services case study
2. Improving business portfolio management of Gsk Rigor
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 Gsk Rigor
Strengths GlaxoSmithKline: Sourcing Complex Professional Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gsk Rigor in GlaxoSmithKline: Sourcing Complex Professional Services Harvard Business Review case study are -
Ability to lead change in Organizational Development field
– Gsk Rigor 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 Gsk Rigor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Gsk Rigor 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.
Superior customer experience
– The customer experience strategy of Gsk Rigor in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Gsk Rigor 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.
Operational resilience
– The operational resilience strategy in the GlaxoSmithKline: Sourcing Complex Professional Services 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.
Training and development
– Gsk Rigor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GlaxoSmithKline: Sourcing Complex Professional Services 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Gsk Rigor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gsk Rigor 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.
Sustainable margins compare to other players in Organizational Development industry
– GlaxoSmithKline: Sourcing Complex Professional Services firm has clearly differentiated products in the market place. This has enabled Gsk Rigor to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Gsk Rigor to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Gsk Rigor 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 GlaxoSmithKline: Sourcing Complex Professional Services HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Gsk Rigor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Gsk Rigor 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 Gsk Rigor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GlaxoSmithKline: Sourcing Complex Professional Services Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Gsk Rigor
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gsk Rigor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses GlaxoSmithKline: Sourcing Complex Professional Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GlaxoSmithKline: Sourcing Complex Professional Services are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gsk Rigor is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GlaxoSmithKline: Sourcing Complex Professional Services can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Gsk Rigor 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.
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 Gsk Rigor supply chain. Even after few cautionary changes mentioned in the HBR case study - GlaxoSmithKline: Sourcing Complex Professional Services, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gsk Rigor vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Gsk Rigor 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. Gsk Rigor 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GlaxoSmithKline: Sourcing Complex Professional Services, it seems that the employees of Gsk Rigor 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.
Skills based hiring
– The stress on hiring functional specialists at Gsk Rigor 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.
Slow to strategic competitive environment developments
– As GlaxoSmithKline: Sourcing Complex Professional Services HBR case study mentions - Gsk Rigor 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.
High cash cycle compare to competitors
Gsk Rigor 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.
High operating costs
– Compare to the competitors, firm in the HBR case study GlaxoSmithKline: Sourcing Complex Professional Services 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 Gsk Rigor 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Heidi K. Gardner, Silvia Hodges Silverstein suggests that, Gsk Rigor 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study GlaxoSmithKline: Sourcing Complex Professional Services, in the dynamic environment Gsk Rigor has struggled to respond to the nimble upstart competition. Gsk Rigor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities GlaxoSmithKline: Sourcing Complex Professional Services | 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 GlaxoSmithKline: Sourcing Complex Professional Services are -
Learning at scale
– Online learning technologies has now opened space for Gsk Rigor 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.
Buying journey improvements
– Gsk Rigor can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GlaxoSmithKline: Sourcing Complex Professional Services 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 Gsk Rigor 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gsk Rigor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Gsk Rigor 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.
Loyalty marketing
– Gsk Rigor 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.
Developing new processes and practices
– Gsk Rigor 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gsk Rigor is facing challenges because of the dominance of functional experts in the organization. GlaxoSmithKline: Sourcing Complex Professional Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gsk Rigor 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.
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. Gsk Rigor can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Gsk Rigor 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.
Creating value in data economy
– The success of analytics program of Gsk Rigor has opened avenues for new revenue streams for the organization in the industry. This can help Gsk Rigor to build a more holistic ecosystem as suggested in the GlaxoSmithKline: Sourcing Complex Professional Services case study. Gsk Rigor 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
– Gsk Rigor 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 GlaxoSmithKline: Sourcing Complex Professional Services - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gsk Rigor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats GlaxoSmithKline: Sourcing Complex Professional Services External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GlaxoSmithKline: Sourcing Complex Professional Services are -
Regulatory challenges
– Gsk Rigor 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.
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 Gsk Rigor.
Stagnating economy with rate increase
– Gsk Rigor 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
– Gsk Rigor 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gsk Rigor 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 GlaxoSmithKline: Sourcing Complex Professional Services .
Environmental challenges
– Gsk Rigor 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. Gsk Rigor can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Gsk Rigor in the Organizational Development sector and impact the bottomline of the organization.
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 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. Gsk Rigor needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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. Gsk Rigor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gsk Rigor 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.
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. Gsk Rigor 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gsk Rigor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of GlaxoSmithKline: Sourcing Complex Professional Services 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 GlaxoSmithKline: Sourcing Complex Professional Services 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 GlaxoSmithKline: Sourcing Complex Professional Services 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 GlaxoSmithKline: Sourcing Complex Professional Services 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 GlaxoSmithKline: Sourcing Complex Professional Services 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 Gsk Rigor needs to make to build a sustainable competitive advantage.
