Richter: Information Technology at Hungary's Largest Pharma SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Richter: Information Technology at Hungary's Largest Pharma
The director of information technology (IT) at Ritcher, a major Hungarian pharmaceutical company with operations throughout Eastern Europe, is in the midst of planning for the IT department for the coming years. The three main considerations for the coming year are: Is the current IT structure appropriate to meet the growing demands of the overall organization? To what extent should IT affiliates be centrally controlled? How can IT best serve the rest of the company?
Authors :: Deborah Compeau, Jordan Mitchell, Gyorgy Drotos, Emma Incze
Swot Analysis of "Richter: Information Technology at Hungary's Largest Pharma" written by Deborah Compeau, Jordan Mitchell, Gyorgy Drotos, Emma Incze includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ritcher Coming facing as an external strategic factors. Some of the topics covered in Richter: Information Technology at Hungary's Largest Pharma case study are - Strategic Management Strategies, IT, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Richter: Information Technology at Hungary's Largest Pharma casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, geopolitical disruptions, central banks are concerned over increasing inflation, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
increasing commodity prices, technology disruption, etc
Introduction to SWOT Analysis of Richter: Information Technology at Hungary's Largest Pharma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Richter: Information Technology at Hungary's Largest Pharma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ritcher Coming, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ritcher Coming 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 Richter: Information Technology at Hungary's Largest Pharma can be done for the following purposes –
1. Strategic planning using facts provided in Richter: Information Technology at Hungary's Largest Pharma case study
2. Improving business portfolio management of Ritcher Coming
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 Ritcher Coming
Strengths Richter: Information Technology at Hungary's Largest Pharma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ritcher Coming in Richter: Information Technology at Hungary's Largest Pharma Harvard Business Review case study are -
Ability to recruit top talent
– Ritcher Coming is one of the leading recruiters in the industry. Managers in the Richter: Information Technology at Hungary's Largest Pharma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Ritcher Coming 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.
Training and development
– Ritcher Coming has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Richter: Information Technology at Hungary's Largest Pharma 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.
Superior customer experience
– The customer experience strategy of Ritcher Coming in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Ritcher Coming digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ritcher Coming 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.
Learning organization
- Ritcher Coming 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 Ritcher Coming is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Richter: Information Technology at Hungary's Largest Pharma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Ritcher Coming is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Organizational Development field
– Ritcher Coming 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 Ritcher Coming in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Ritcher Coming
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ritcher Coming does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Richter: Information Technology at Hungary's Largest Pharma 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.
Sustainable margins compare to other players in Organizational Development industry
– Richter: Information Technology at Hungary's Largest Pharma firm has clearly differentiated products in the market place. This has enabled Ritcher Coming to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Ritcher Coming to invest into research and development (R&D) and innovation.
Innovation driven organization
– Ritcher Coming is one of the most innovative firm in sector. Manager in Richter: Information Technology at Hungary's Largest Pharma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Richter: Information Technology at Hungary's Largest Pharma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Richter: Information Technology at Hungary's Largest Pharma are -
High bargaining power of channel partners
– Because of the regulatory requirements, Deborah Compeau, Jordan Mitchell, Gyorgy Drotos, Emma Incze suggests that, Ritcher Coming 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.
Increasing silos among functional specialists
– The organizational structure of Ritcher Coming is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Ritcher Coming needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ritcher Coming to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Richter: Information Technology at Hungary's Largest Pharma HBR case study mentions - Ritcher Coming 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 Ritcher Coming 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.
High cash cycle compare to competitors
Ritcher Coming 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 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 Ritcher Coming supply chain. Even after few cautionary changes mentioned in the HBR case study - Richter: Information Technology at Hungary's Largest Pharma, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ritcher Coming vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Ritcher Coming 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Richter: Information Technology at Hungary's Largest Pharma, it seems that the employees of Ritcher Coming 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ritcher Coming 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.
Interest costs
– Compare to the competition, Ritcher Coming has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Ritcher Coming, firm in the HBR case study Richter: Information Technology at Hungary's Largest Pharma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Richter: Information Technology at Hungary's Largest Pharma | 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 Richter: Information Technology at Hungary's Largest Pharma are -
Leveraging digital technologies
– Ritcher Coming 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.
Using analytics as competitive advantage
– Ritcher Coming 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 Richter: Information Technology at Hungary's Largest Pharma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ritcher Coming to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Ritcher Coming 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ritcher Coming 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.
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 Ritcher Coming in the consumer business. Now Ritcher Coming can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Ritcher Coming 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ritcher Coming 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, Richter: Information Technology at Hungary's Largest Pharma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ritcher Coming can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ritcher Coming 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ritcher Coming can use these opportunities to build new business models that can help the communities that Ritcher Coming operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Loyalty marketing
– Ritcher Coming 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.
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. Ritcher Coming 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. Ritcher Coming 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.
Manufacturing automation
– Ritcher Coming 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.
Threats Richter: Information Technology at Hungary's Largest Pharma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Richter: Information Technology at Hungary's Largest Pharma are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ritcher Coming 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 Ritcher Coming 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.
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 Ritcher Coming business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ritcher Coming.
Environmental challenges
– Ritcher Coming 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. Ritcher Coming can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Richter: Information Technology at Hungary's Largest Pharma, Ritcher Coming 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 .
Regulatory challenges
– Ritcher Coming 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.
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 Ritcher Coming in the Organizational Development sector and impact the bottomline of the organization.
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. Ritcher Coming can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Ritcher Coming 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 Ritcher Coming 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
– Ritcher Coming 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, Ritcher Coming 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 Richter: Information Technology at Hungary's Largest Pharma .
Weighted SWOT Analysis of Richter: Information Technology at Hungary's Largest Pharma 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 Richter: Information Technology at Hungary's Largest Pharma 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 Richter: Information Technology at Hungary's Largest Pharma 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 Richter: Information Technology at Hungary's Largest Pharma 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 Richter: Information Technology at Hungary's Largest Pharma 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 Ritcher Coming needs to make to build a sustainable competitive advantage.
