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 - – technology disruption, geopolitical disruptions, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing energy prices, etc

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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.

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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

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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 -

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.

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.

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.

Cross disciplinary teams

– Horizontal connected teams at the Prilosec Omeprazole 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.

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.

High brand equity

– Prilosec Omeprazole has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Prilosec Omeprazole to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Organizational Development field

– Prilosec Omeprazole 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 Prilosec Omeprazole in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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.

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.

Analytics focus

– Prilosec Omeprazole is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by James G. Conley, Robert C. Wolcott, Eric Wong can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

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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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, in the dynamic environment Prilosec Omeprazole has struggled to respond to the nimble upstart competition. Prilosec Omeprazole has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Prilosec Omeprazole 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.

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.

Slow to strategic competitive environment developments

– As AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug HBR case study mentions - Prilosec Omeprazole 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.

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.

Lack of clear differentiation of Prilosec Omeprazole products

– To increase the profitability and margins on the products, Prilosec Omeprazole needs to provide more differentiated products than what it is currently offering in the marketplace.

Products dominated business model

– Even though Prilosec Omeprazole 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 - AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug should strive to include more intangible value offerings along with its core products and services.

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.

Workers concerns about automation

– As automation is fast increasing in the segment, Prilosec Omeprazole 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.

Aligning sales with marketing

– It come across in the case study AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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 AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug can leverage the sales team experience to cultivate customer relationships as Prilosec Omeprazole is planning to shift buying processes online.

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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 -

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.

Building a culture of innovation

– managers at Prilosec Omeprazole 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.

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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Prilosec Omeprazole 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Prilosec Omeprazole can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Buying journey improvements

– Prilosec Omeprazole can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug 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.

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.

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.

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.

Learning at scale

– Online learning technologies has now opened space for Prilosec Omeprazole 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Prilosec Omeprazole 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 Prilosec Omeprazole to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Prilosec Omeprazole can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, AstraZeneca, Prilosec, and Nexium: Marketing Challenges in the Launch of a Second-Generation Drug, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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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 -

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 .

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.

Environmental challenges

– Prilosec Omeprazole 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. Prilosec Omeprazole can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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.

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