Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget
This case concerns the bonus structure for a representative sales team. Pharma Talent, a contract sales company for pharmaceutical companies across Canada, promised its clients that its representatives would drive sales at a lower cost than what the client would incur if it had its own sales force. Historically, it had contracts with products that targeted physicians (e.g., prescription drugs or medical devices); however, a new contract in Ontario involved an over-the-counter (OTC) product. Pharma Talent currently had a pay-for-performance bonus structure that had already been revised three times. Nevertheless, due to the structure of the different territories in Ontario, many sales team members thought the bonus was unfair and very discouraging, while its pay-for-performance structure did not meet the clients' needs.
Swot Analysis of "Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget" written by Michael Taylor, Rocky Campana includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pharma Bonus facing as an external strategic factors. Some of the topics covered in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, technology disruption, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pharma Bonus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pharma Bonus 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget can be done for the following purposes –
1. Strategic planning using facts provided in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget case study
2. Improving business portfolio management of Pharma Bonus
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pharma Bonus
Strengths Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pharma Bonus in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget Harvard Business Review case study are -
Highly skilled collaborators
– Pharma Bonus 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Bonus 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.
Learning organization
- Pharma Bonus 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 Pharma Bonus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Pharma Bonus 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Pharma Bonus 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 Michael Taylor, Rocky Campana 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Pharma Bonus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pharma Bonus 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.
Organizational Resilience of Pharma Bonus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pharma Bonus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget firm has clearly differentiated products in the market place. This has enabled Pharma Bonus to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Pharma Bonus to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Pharma Bonus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pharma Bonus 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.
Cross disciplinary teams
– Horizontal connected teams at the Pharma Bonus 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
– Pharma Bonus has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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.
Low bargaining power of suppliers
– Suppliers of Pharma Bonus in the sector have low bargaining power. Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pharma Bonus to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pharma Bonus is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 star products
– The top 2 products and services of the firm as mentioned in the Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Bonus has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget HBR case study mentions - Pharma Bonus 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.
Need for greater diversity
– Pharma Bonus 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.
Skills based hiring
– The stress on hiring functional specialists at Pharma Bonus 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget, in the dynamic environment Pharma Bonus has struggled to respond to the nimble upstart competition. Pharma Bonus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Pharma Bonus 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. Pharma Bonus 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Bonus 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget can leverage the sales team experience to cultivate customer relationships as Pharma Bonus is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget, is just above the industry average. Pharma Bonus 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.
Opportunities Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget | 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pharma Bonus is facing challenges because of the dominance of functional experts in the organization. Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pharma Bonus 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, Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Pharma Bonus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pharma Bonus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Pharma Bonus to increase its market reach. Pharma Bonus 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.
Loyalty marketing
– Pharma Bonus 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.
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 Pharma Bonus 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.
Buying journey improvements
– Pharma Bonus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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.
Creating value in data economy
– The success of analytics program of Pharma Bonus has opened avenues for new revenue streams for the organization in the industry. This can help Pharma Bonus to build a more holistic ecosystem as suggested in the Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget case study. Pharma Bonus can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Pharma Bonus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pharma Bonus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Pharma Bonus can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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 Pharma Bonus in the consumer business. Now Pharma Bonus can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget are -
Environmental challenges
– Pharma Bonus 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. Pharma Bonus can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Increasing wage structure of Pharma Bonus
– 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 Pharma Bonus.
High dependence on third party suppliers
– Pharma Bonus 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pharma Bonus in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pharma Bonus 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.
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. Pharma Bonus needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Pharma Bonus 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.
Shortening product life cycle
– it is one of the major threat that Pharma Bonus is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pharma Bonus with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget, Pharma Bonus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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 Pharma Bonus in the Sales & Marketing sector and impact the bottomline of the organization.
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 Pharma Bonus business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget 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 Pharma Bonus needs to make to build a sustainable competitive advantage.
