Case Study Description of Merck Sharp & Dohme Argentina, Inc. (A)
Describes the efforts of the new managing director of Merck's subsidiary for Argentina, Uruguay, and Paraguay to transform the organization and its culture. Focuses on a critical decision: whether to offer the son of a high-ranking official in the government's national health-care program a place in the company's highly selective intern program for young professionals.
Swot Analysis of "Merck Sharp & Dohme Argentina, Inc. (A)" written by Lynn Sharp Paine, Harold F. Hogan Jr. includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Argentina Dohme facing as an external strategic factors. Some of the topics covered in Merck Sharp & Dohme Argentina, Inc. (A) case study are - Strategic Management Strategies, Cross-cultural management, Decision making, Ethics, Leadership and Organizational Development.
Some of the macro environment factors that can be used to understand the Merck Sharp & Dohme Argentina, Inc. (A) casestudy better are - – increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Merck Sharp & Dohme Argentina, Inc. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merck Sharp & Dohme Argentina, Inc. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Argentina Dohme, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Argentina Dohme 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 Sharp & Dohme Argentina, Inc. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Merck Sharp & Dohme Argentina, Inc. (A) case study
2. Improving business portfolio management of Argentina Dohme
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 Argentina Dohme
Strengths Merck Sharp & Dohme Argentina, Inc. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Argentina Dohme in Merck Sharp & Dohme Argentina, Inc. (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Organizational Development industry
– Merck Sharp & Dohme Argentina, Inc. (A) firm has clearly differentiated products in the market place. This has enabled Argentina Dohme to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Argentina Dohme to invest into research and development (R&D) and innovation.
Training and development
– Argentina Dohme has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Merck Sharp & Dohme Argentina, Inc. (A) 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
– Argentina Dohme has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Argentina Dohme to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Argentina Dohme 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 Sharp & Dohme Argentina, Inc. (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Argentina Dohme 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.
Innovation driven organization
– Argentina Dohme is one of the most innovative firm in sector. Manager in Merck Sharp & Dohme Argentina, Inc. (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Argentina Dohme 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.
Learning organization
- Argentina Dohme 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 Argentina Dohme is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Merck Sharp & Dohme Argentina, Inc. (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Organizational Development field
– Argentina Dohme 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 Argentina Dohme 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
– Argentina Dohme is one of the leading recruiters in the industry. Managers in the Merck Sharp & Dohme Argentina, Inc. (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.
Diverse revenue streams
– Argentina Dohme is present in almost all the verticals within the industry. This has provided firm in Merck Sharp & Dohme Argentina, Inc. (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.
Strong track record of project management
– Argentina Dohme is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Merck Sharp & Dohme Argentina, Inc. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck Sharp & Dohme Argentina, Inc. (A) are -
Slow to strategic competitive environment developments
– As Merck Sharp & Dohme Argentina, Inc. (A) HBR case study mentions - Argentina Dohme 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
Argentina Dohme 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Merck Sharp & Dohme Argentina, Inc. (A), is just above the industry average. Argentina Dohme needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynn Sharp Paine, Harold F. Hogan Jr. suggests that, Argentina Dohme 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 operating costs
– Compare to the competitors, firm in the HBR case study Merck Sharp & Dohme Argentina, Inc. (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 Argentina Dohme 's lucrative customers.
Lack of clear differentiation of Argentina Dohme products
– To increase the profitability and margins on the products, Argentina Dohme needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Argentina Dohme 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.
Products dominated business model
– Even though Argentina Dohme 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 - Merck Sharp & Dohme Argentina, Inc. (A) should strive to include more intangible value offerings along with its core products and services.
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 Argentina Dohme supply chain. Even after few cautionary changes mentioned in the HBR case study - Merck Sharp & Dohme Argentina, Inc. (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Argentina Dohme vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Argentina Dohme 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Merck Sharp & Dohme Argentina, Inc. (A) 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 Argentina Dohme has relatively successful track record of launching new products.
Opportunities Merck Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (A) are -
Creating value in data economy
– The success of analytics program of Argentina Dohme has opened avenues for new revenue streams for the organization in the industry. This can help Argentina Dohme to build a more holistic ecosystem as suggested in the Merck Sharp & Dohme Argentina, Inc. (A) case study. Argentina Dohme can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Argentina Dohme 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.
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 Argentina Dohme 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.
Learning at scale
– Online learning technologies has now opened space for Argentina Dohme 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.
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. Argentina Dohme 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. Argentina Dohme 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Argentina Dohme can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Argentina Dohme can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Merck Sharp & Dohme Argentina, Inc. (A) 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.
Loyalty marketing
– Argentina Dohme 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.
Manufacturing automation
– Argentina Dohme 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.
Leveraging digital technologies
– Argentina Dohme 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.
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. Argentina Dohme can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Argentina Dohme to increase its market reach. Argentina Dohme 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.
Building a culture of innovation
– managers at Argentina Dohme 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.
Threats Merck Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (A) are -
Increasing wage structure of Argentina Dohme
– 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 Argentina Dohme.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Argentina Dohme 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 Sharp & Dohme Argentina, Inc. (A) .
Shortening product life cycle
– it is one of the major threat that Argentina Dohme is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Argentina Dohme in the Organizational Development sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Argentina Dohme 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.
Consumer confidence and its impact on Argentina Dohme demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Argentina Dohme with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Argentina Dohme 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.
Technology acceleration in Forth Industrial Revolution
– Argentina Dohme has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Argentina Dohme 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merck Sharp & Dohme Argentina, Inc. (A), Argentina Dohme 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 .
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 Argentina Dohme 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. Argentina Dohme 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.
Weighted SWOT Analysis of Merck Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (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 Sharp & Dohme Argentina, Inc. (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 Argentina Dohme needs to make to build a sustainable competitive advantage.
