Case Study Description of Cabot Pharmaceuticals, Inc.
Traces the 12-year career of a pharmaceutical salesperson, Bob Marsh, from recruitment to termination. Marsh has had an uneven career with Cabot Pharmaceuticals and eventually is asked to resign. Following his termination, a number of Marsh's former customers complain vigorously, and Cabot's vice president of sales is asked to investigate the matter and to decide what, if anything, to do about it. The case raises issues in aligning strategy and sales systems, performance evaluation criteria, and on-going performance management processes in field selling situations.
Swot Analysis of "Cabot Pharmaceuticals, Inc." written by Frank V. Cespedes, John T. Gourville includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cabot Marsh facing as an external strategic factors. Some of the topics covered in Cabot Pharmaceuticals, Inc. case study are - Strategic Management Strategies, Human resource management, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cabot Pharmaceuticals, Inc. casestudy better are - – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Cabot Pharmaceuticals, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cabot Pharmaceuticals, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cabot Marsh, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cabot Marsh 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 Cabot Pharmaceuticals, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Cabot Pharmaceuticals, Inc. case study
2. Improving business portfolio management of Cabot Marsh
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 Cabot Marsh
Strengths Cabot Pharmaceuticals, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cabot Marsh in Cabot Pharmaceuticals, Inc. Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cabot Marsh 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 Cabot Pharmaceuticals, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Sales & Marketing field
– Cabot Marsh 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 Cabot Marsh in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Cabot Marsh 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 Frank V. Cespedes, John T. Gourville 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.
High brand equity
– Cabot Marsh has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cabot Marsh to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Cabot Marsh has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cabot Marsh 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cabot Marsh digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cabot Marsh 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.
Superior customer experience
– The customer experience strategy of Cabot Marsh in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Cabot Marsh 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.
Highly skilled collaborators
– Cabot Marsh 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 Cabot Pharmaceuticals, Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Cabot Marsh 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 Cabot Marsh is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cabot Pharmaceuticals, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Cabot Marsh has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cabot Pharmaceuticals, Inc. 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.
Organizational Resilience of Cabot Marsh
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cabot Marsh does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Cabot Pharmaceuticals, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cabot Pharmaceuticals, Inc. are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cabot Pharmaceuticals, Inc., in the dynamic environment Cabot Marsh has struggled to respond to the nimble upstart competition. Cabot Marsh has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Cabot Pharmaceuticals, Inc. 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 Cabot Marsh 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Cabot Marsh 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank V. Cespedes, John T. Gourville suggests that, Cabot Marsh 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cabot Pharmaceuticals, Inc., it seems that the employees of Cabot Marsh 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.
Interest costs
– Compare to the competition, Cabot Marsh 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 Cabot Marsh, firm in the HBR case study Cabot Pharmaceuticals, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Cabot Pharmaceuticals, Inc. HBR case study mentions - Cabot Marsh 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.
Increasing silos among functional specialists
– The organizational structure of Cabot Marsh is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cabot Marsh needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cabot Marsh to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc. can leverage the sales team experience to cultivate customer relationships as Cabot Marsh is planning to shift buying processes online.
Products dominated business model
– Even though Cabot Marsh 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 - Cabot Pharmaceuticals, Inc. should strive to include more intangible value offerings along with its core products and services.
Opportunities Cabot Pharmaceuticals, Inc. | 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 Cabot Pharmaceuticals, Inc. 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 Cabot Marsh in the consumer business. Now Cabot Marsh can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cabot Marsh 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cabot Marsh 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.
Manufacturing automation
– Cabot Marsh 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cabot Marsh can use these opportunities to build new business models that can help the communities that Cabot Marsh operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cabot Marsh can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Cabot Marsh 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
– Cabot Marsh can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cabot Pharmaceuticals, Inc. 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cabot Marsh 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cabot Marsh 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 Cabot Marsh to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Cabot Marsh has opened avenues for new revenue streams for the organization in the industry. This can help Cabot Marsh to build a more holistic ecosystem as suggested in the Cabot Pharmaceuticals, Inc. case study. Cabot Marsh 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. Cabot Marsh can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Cabot Marsh 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. Cabot Marsh 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.
Threats Cabot Pharmaceuticals, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc., Cabot Marsh 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cabot Marsh 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 Cabot Pharmaceuticals, Inc. .
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 Cabot Marsh business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Cabot Marsh
– 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 Cabot Marsh.
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 Cabot Marsh.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cabot Marsh 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.
Shortening product life cycle
– it is one of the major threat that Cabot Marsh 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 Cabot Marsh with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cabot Marsh in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Cabot Marsh 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.
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.
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.
High dependence on third party suppliers
– Cabot Marsh 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.
Weighted SWOT Analysis of Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc. 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 Cabot Pharmaceuticals, Inc. 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 Cabot Marsh needs to make to build a sustainable competitive advantage.