Abiomed and the AbioCor Clinical Trials (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Abiomed and the AbioCor Clinical Trials (B)

In late 2002, a sensational article in the New York Times depicting James Quinn's experience and death following implantation with the AbioCor artificial heart raises questions about Abiomed's handling of the informed consent process related to its clinical trials. At the same time, investor confidence in the company wanes due to the apparent stall in the clinical trial's progress. This B case illustrates Abiomed's handling of the situation, along with commentary from onlookers including those close to Quinn's case, as well as medical ethicists and financial investors and analysts. An analysis of Abiomed's choices reveals the company's apparent strategy as one of downplaying the significance of the Times article and reinforcing its message to investors to protect the company's falling stock price. The B case also reveals how the company changed the 30-day "quiet period" that had become a lightning rod in the media.

Authors :: Elizabeth A. Powell, Rebecca O. Goldberg

Topics :: Sales & Marketing

Tags :: Crisis management, Ethics, Public relations, Research & development, Transparency, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Abiomed and the AbioCor Clinical Trials (B)" written by Elizabeth A. Powell, Rebecca O. Goldberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abiomed's Abiocor facing as an external strategic factors. Some of the topics covered in Abiomed and the AbioCor Clinical Trials (B) case study are - Strategic Management Strategies, Crisis management, Ethics, Public relations, Research & development, Transparency and Sales & Marketing.

Some of the macro environment factors that can be used to understand the Abiomed and the AbioCor Clinical Trials (B) casestudy better are - – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing energy prices, etc

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Introduction to SWOT Analysis of Abiomed and the AbioCor Clinical Trials (B)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Abiomed and the AbioCor Clinical Trials (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abiomed's Abiocor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abiomed's Abiocor 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 Abiomed and the AbioCor Clinical Trials (B) can be done for the following purposes –
1. Strategic planning using facts provided in Abiomed and the AbioCor Clinical Trials (B) case study
2. Improving business portfolio management of Abiomed's Abiocor
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 Abiomed's Abiocor

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Strengths Abiomed and the AbioCor Clinical Trials (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Abiomed's Abiocor in Abiomed and the AbioCor Clinical Trials (B) Harvard Business Review case study are -

Sustainable margins compare to other players in Sales & Marketing industry

– Abiomed and the AbioCor Clinical Trials (B) firm has clearly differentiated products in the market place. This has enabled Abiomed's Abiocor to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Abiomed's Abiocor to invest into research and development (R&D) and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Abiomed's Abiocor 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.

Successful track record of launching new products

– Abiomed's Abiocor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abiomed's Abiocor 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.

High switching costs

– The high switching costs that Abiomed's Abiocor 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

- Abiomed's Abiocor 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 Abiomed's Abiocor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Abiomed and the AbioCor Clinical Trials (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Organizational Resilience of Abiomed's Abiocor

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

Diverse revenue streams

– Abiomed's Abiocor is present in almost all the verticals within the industry. This has provided firm in Abiomed and the AbioCor Clinical Trials (B) 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.

Low bargaining power of suppliers

– Suppliers of Abiomed's Abiocor in the sector have low bargaining power. Abiomed and the AbioCor Clinical Trials (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abiomed's Abiocor to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– Abiomed's Abiocor 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 Abiomed and the AbioCor Clinical Trials (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– Abiomed's Abiocor 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 Abiomed and the AbioCor Clinical Trials (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to lead change in Sales & Marketing field

– Abiomed's Abiocor 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 Abiomed's Abiocor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High brand equity

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

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Weaknesses Abiomed and the AbioCor Clinical Trials (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Abiomed and the AbioCor Clinical Trials (B) are -

Low market penetration in new markets

– Outside its home market of Abiomed's Abiocor, firm in the HBR case study Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed and the AbioCor Clinical Trials (B), in the dynamic environment Abiomed's Abiocor has struggled to respond to the nimble upstart competition. Abiomed's Abiocor 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, Abiomed's Abiocor 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Elizabeth A. Powell, Rebecca O. Goldberg suggests that, Abiomed's Abiocor is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

High operating costs

– Compare to the competitors, firm in the HBR case study Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed's Abiocor 's lucrative customers.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abiomed's Abiocor is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed's Abiocor supply chain. Even after few cautionary changes mentioned in the HBR case study - Abiomed and the AbioCor Clinical Trials (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abiomed's Abiocor vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

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

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Abiomed and the AbioCor Clinical Trials (B), it seems that the employees of Abiomed's Abiocor 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.

Need for greater diversity

– Abiomed's Abiocor 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Abiomed and the AbioCor Clinical Trials (B), is just above the industry average. Abiomed's Abiocor 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.

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Opportunities Abiomed and the AbioCor Clinical Trials (B) | 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 Abiomed and the AbioCor Clinical Trials (B) are -

Remote work and new talent hiring opportunities

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

Loyalty marketing

– Abiomed's Abiocor 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, Abiomed's Abiocor can use these opportunities to build new business models that can help the communities that Abiomed's Abiocor operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.

Learning at scale

– Online learning technologies has now opened space for Abiomed's Abiocor to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abiomed's Abiocor 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. Abiomed's Abiocor 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.

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 Abiomed's Abiocor in the consumer business. Now Abiomed's Abiocor can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at Abiomed's Abiocor 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 Sales & Marketing segment.

Buying journey improvements

– Abiomed's Abiocor can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Abiomed and the AbioCor Clinical Trials (B) 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.

Better consumer reach

– The expansion of the 5G network will help Abiomed's Abiocor to increase its market reach. Abiomed's Abiocor 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 Abiomed's Abiocor has opened avenues for new revenue streams for the organization in the industry. This can help Abiomed's Abiocor to build a more holistic ecosystem as suggested in the Abiomed and the AbioCor Clinical Trials (B) case study. Abiomed's Abiocor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Abiomed's Abiocor is facing challenges because of the dominance of functional experts in the organization. Abiomed and the AbioCor Clinical Trials (B) 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Abiomed's Abiocor 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.

Reforming the budgeting process

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

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Threats Abiomed and the AbioCor Clinical Trials (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Abiomed and the AbioCor Clinical Trials (B) are -

High dependence on third party suppliers

– Abiomed's Abiocor 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 Abiomed's Abiocor in the Sales & Marketing sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abiomed's Abiocor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Abiomed and the AbioCor Clinical Trials (B), Abiomed's Abiocor 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 .

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Regulatory challenges

– Abiomed's Abiocor 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 Sales & Marketing industry regulations.

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 Abiomed's Abiocor business can come under increasing regulations regarding data privacy, data security, etc.

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. Abiomed's Abiocor needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

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. Abiomed's Abiocor 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.

Shortening product life cycle

– it is one of the major threat that Abiomed's Abiocor is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Abiomed's Abiocor 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abiomed's Abiocor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Abiomed's Abiocor.

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Weighted SWOT Analysis of Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed and the AbioCor Clinical Trials (B) 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 Abiomed's Abiocor needs to make to build a sustainable competitive advantage.

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