AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug

Tom McKillop, CEO of AstraZeneca, faced the classic quandary of large pharmaceutical firms. The firm's patent for Prilosec (active ingredient omeprazole) was expiring. Severe cost-based competition from generic drug manufacturers was inevitable. Patent expirations were nothing new for the US$15.8 billion in revenues drug firm, but Prilosec was the firm's most successful drug franchise, with global sales of US$6.2 billion. How could the company innovate its way around the generic cost-based competition and avoid the drop in revenues associated with generic drug market entry? AstraZeneca had other follow-on drugs in the pipeline-namely Nexium, an improvement on the original Prilosec molecule. Additionally, the company had the opportunity to introduce its own version of generic omeprazole, hence becoming the first mover in the generic segment, and/or introduce an OTC version of omeprazole that might tap into other markets. Ideally, AstraZeneca would like to move brand-loyal Prilosec customers to Nexium. In this market, direct-to-consumer advertising has remarkable efficacy. Classical marketing challenges of pricing and promotion need to be resolved for the Nexium launch as well as possible product and place challenges for the generic or OTC opportunity. Which combination of marketing options will allow the firm to best sustain the value of the original omeprazole innovation?

Authors :: James G. Conley, Robert C. Wolcott, Eric Wong

Topics :: Organizational Development

Tags :: Competition, International business, Marketing, Pricing, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug" written by James G. Conley, Robert C. Wolcott, Eric Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prilosec Omeprazole facing as an external strategic factors. Some of the topics covered in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug case study are - Strategic Management Strategies, Competition, International business, Marketing, Pricing and Organizational Development.

Some of the macro environment factors that can be used to understand the AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug casestudy better are - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc

---

---

---

---

Introduction to SWOT Analysis of AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prilosec Omeprazole, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prilosec Omeprazole 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug can be done for the following purposes –
1. Strategic planning using facts provided in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug case study
2. Improving business portfolio management of Prilosec Omeprazole
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 Prilosec Omeprazole

---

Strengths AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Prilosec Omeprazole in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug Harvard Business Review case study are -

Organizational Resilience of Prilosec Omeprazole

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prilosec Omeprazole does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Learning organization

- Prilosec Omeprazole 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 Prilosec Omeprazole is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– Prilosec Omeprazole has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Prilosec Omeprazole 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.

Innovation driven organization

– Prilosec Omeprazole is one of the most innovative firm in sector. Manager in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Highly skilled collaborators

– Prilosec Omeprazole 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Prilosec Omeprazole is present in almost all the verticals within the industry. This has provided firm in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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

– Prilosec Omeprazole is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Digital Transformation in Organizational Development segment

- digital transformation varies from industry to industry. For Prilosec Omeprazole digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Prilosec Omeprazole 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.

Effective Research and Development (R&D)

– Prilosec Omeprazole 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Training and development

– Prilosec Omeprazole has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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.

Ability to recruit top talent

– Prilosec Omeprazole is one of the leading recruiters in the industry. Managers in the AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

– Suppliers of Prilosec Omeprazole in the sector have low bargaining power. AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Prilosec Omeprazole to manage not only supply disruptions but also source products at highly competitive prices.

---

---

Weaknesses AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug are -

Low market penetration in new markets

– Outside its home market of Prilosec Omeprazole, firm in the HBR case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Prilosec Omeprazole is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

High 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 Prilosec Omeprazole supply chain. Even after few cautionary changes mentioned in the HBR case study - AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Prilosec Omeprazole vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

– The organizational structure of Prilosec Omeprazole is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Prilosec Omeprazole needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Prilosec Omeprazole to focus more on services rather than just following the product oriented approach.

Skills based hiring

– The stress on hiring functional specialists at Prilosec Omeprazole 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, it seems that the employees of Prilosec Omeprazole 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.

High cash cycle compare to competitors

Prilosec Omeprazole 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.

No frontier risks strategy

– After analyzing the HBR case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, 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, Prilosec Omeprazole 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. Prilosec Omeprazole even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, is just above the industry average. Prilosec Omeprazole 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 dependence on star products

– The top 2 products and services of the firm as mentioned in the AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 Prilosec Omeprazole has relatively successful track record of launching new products.

---

Opportunities AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug | 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug are -

Manufacturing automation

– Prilosec Omeprazole 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.

Using analytics as competitive advantage

– Prilosec Omeprazole 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Prilosec Omeprazole to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Prilosec Omeprazole is facing challenges because of the dominance of functional experts in the organization. AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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.

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 Prilosec Omeprazole in the consumer business. Now Prilosec Omeprazole can target international markets with far fewer capital restrictions requirements than the existing system.

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 Prilosec Omeprazole 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.

Better consumer reach

– The expansion of the 5G network will help Prilosec Omeprazole to increase its market reach. Prilosec Omeprazole 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Prilosec Omeprazole 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.

Developing new processes and practices

– Prilosec Omeprazole 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

– Prilosec Omeprazole 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Prilosec Omeprazole can use these opportunities to build new business models that can help the communities that Prilosec Omeprazole operates in. Secondly it can use opportunities from government spending in Organizational Development sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Prilosec Omeprazole can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

– The success of analytics program of Prilosec Omeprazole has opened avenues for new revenue streams for the organization in the industry. This can help Prilosec Omeprazole to build a more holistic ecosystem as suggested in the AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug case study. Prilosec Omeprazole can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– Prilosec Omeprazole 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.

---

Threats AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug are -

Technology acceleration in Forth Industrial Revolution

– Prilosec Omeprazole has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Prilosec Omeprazole 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.

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. Prilosec Omeprazole 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.

Increasing wage structure of Prilosec Omeprazole

– 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 Prilosec Omeprazole.

High dependence on third party suppliers

– Prilosec Omeprazole 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.

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 Prilosec Omeprazole in the Organizational Development sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Prilosec Omeprazole is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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. Prilosec Omeprazole 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. Prilosec Omeprazole can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Prilosec Omeprazole business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Prilosec Omeprazole 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.

Stagnating economy with rate increase

– Prilosec Omeprazole 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, Prilosec Omeprazole 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 .

---

Weighted SWOT Analysis of AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 Prilosec Omeprazole needs to make to build a sustainable competitive advantage.

--- ---