Pfizer and AstraZeneca: Marketing an Acquisition (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pfizer and AstraZeneca: Marketing an Acquisition (A)
In 2014, Pfizer proposed a friendly acquisition of AstraZeneca, but the AstraZeneca board resisted over price and strategy concerns. Was this good for pharmaceutical consumers? Pfizer, like pharmaceutical companies in general, faced difficulties in growing sales due to the challenges of developing new drugs. Over the previous decade or more, Pfizer had pursued acquisitions as a way to acquire new drugs, increase sales, and to reduce costs by combining operations and cutting staff. Pfizer, a U.S. company, was also interested in AstraZeneca, a U.K. company, as a way to reduce its corporate taxes. In recent years, AstraZeneca had significantly strengthened its pipeline of potential new drugs and its board felt it was in a strong position to go it alone. The company's CEO also indicated that an acquisition would be disruptive to its drug development efforts and delay new drugs coming to market. U.K. politicians expressed concerns over downsizing and job losses in the economically important pharmaceutical sector. The case allows readers to explore who benefits from a potential acquisition (shareholders, employees, drug consumers) and which of these stakeholders should be considered when deciding on an acquisition.
Swot Analysis of "Pfizer and AstraZeneca: Marketing an Acquisition (A)" written by John A. Quelch, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Astrazeneca Pfizer facing as an external strategic factors. Some of the topics covered in Pfizer and AstraZeneca: Marketing an Acquisition (A) case study are - Strategic Management Strategies, Decision making, Government, Health, Marketing, Mergers & acquisitions and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Pfizer and AstraZeneca: Marketing an Acquisition (A) casestudy better are - – there is backlash against globalization, geopolitical disruptions, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Pfizer and AstraZeneca: Marketing an Acquisition (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pfizer and AstraZeneca: Marketing an Acquisition (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Astrazeneca Pfizer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Astrazeneca Pfizer 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) can be done for the following purposes –
1. Strategic planning using facts provided in Pfizer and AstraZeneca: Marketing an Acquisition (A) case study
2. Improving business portfolio management of Astrazeneca Pfizer
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 Astrazeneca Pfizer
Strengths Pfizer and AstraZeneca: Marketing an Acquisition (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Astrazeneca Pfizer in Pfizer and AstraZeneca: Marketing an Acquisition (A) Harvard Business Review case study are -
High switching costs
– The high switching costs that Astrazeneca Pfizer 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.
Cross disciplinary teams
– Horizontal connected teams at the Astrazeneca Pfizer 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Pfizer and AstraZeneca: Marketing an Acquisition (A) firm has clearly differentiated products in the market place. This has enabled Astrazeneca Pfizer to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Astrazeneca Pfizer to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Astrazeneca Pfizer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Astrazeneca Pfizer 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.
Learning organization
- Astrazeneca Pfizer 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 Astrazeneca Pfizer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pfizer and AstraZeneca: Marketing an Acquisition (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Astrazeneca Pfizer in the sector have low bargaining power. Pfizer and AstraZeneca: Marketing an Acquisition (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Astrazeneca Pfizer to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Pfizer and AstraZeneca: Marketing an Acquisition (A) 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.
Ability to recruit top talent
– Astrazeneca Pfizer is one of the leading recruiters in the industry. Managers in the Pfizer and AstraZeneca: Marketing an Acquisition (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Astrazeneca Pfizer is present in almost all the verticals within the industry. This has provided firm in Pfizer and AstraZeneca: Marketing an Acquisition (A) 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.
Ability to lead change in Sales & Marketing field
– Astrazeneca Pfizer 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 Astrazeneca Pfizer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Astrazeneca Pfizer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Astrazeneca Pfizer 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 Astrazeneca Pfizer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Astrazeneca Pfizer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Pfizer and AstraZeneca: Marketing an Acquisition (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pfizer and AstraZeneca: Marketing an Acquisition (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Pfizer and AstraZeneca: Marketing an Acquisition (A), it seems that the employees of Astrazeneca Pfizer 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.
Capital Spending Reduction
– Even during the low interest decade, Astrazeneca Pfizer 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.
Need for greater diversity
– Astrazeneca Pfizer 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.
No frontier risks strategy
– After analyzing the HBR case study Pfizer and AstraZeneca: Marketing an Acquisition (A), 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.
Lack of clear differentiation of Astrazeneca Pfizer products
– To increase the profitability and margins on the products, Astrazeneca Pfizer needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Astrazeneca Pfizer 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, James Weber suggests that, Astrazeneca Pfizer 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.
Products dominated business model
– Even though Astrazeneca Pfizer 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 - Pfizer and AstraZeneca: Marketing an Acquisition (A) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) can leverage the sales team experience to cultivate customer relationships as Astrazeneca Pfizer is planning to shift buying processes online.
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 Astrazeneca Pfizer supply chain. Even after few cautionary changes mentioned in the HBR case study - Pfizer and AstraZeneca: Marketing an Acquisition (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Astrazeneca Pfizer vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Pfizer and AstraZeneca: Marketing an Acquisition (A), is just above the industry average. Astrazeneca Pfizer 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) | 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Astrazeneca Pfizer 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.
Creating value in data economy
– The success of analytics program of Astrazeneca Pfizer has opened avenues for new revenue streams for the organization in the industry. This can help Astrazeneca Pfizer to build a more holistic ecosystem as suggested in the Pfizer and AstraZeneca: Marketing an Acquisition (A) case study. Astrazeneca Pfizer 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, Astrazeneca Pfizer is facing challenges because of the dominance of functional experts in the organization. Pfizer and AstraZeneca: Marketing an Acquisition (A) 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.
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. Astrazeneca Pfizer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Astrazeneca Pfizer 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.
Building a culture of innovation
– managers at Astrazeneca Pfizer 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Astrazeneca Pfizer can use these opportunities to build new business models that can help the communities that Astrazeneca Pfizer operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Astrazeneca Pfizer to increase its market reach. Astrazeneca Pfizer 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Astrazeneca Pfizer 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, Pfizer and AstraZeneca: Marketing an Acquisition (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Astrazeneca Pfizer 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. Astrazeneca Pfizer 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. Astrazeneca Pfizer 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.
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 Astrazeneca Pfizer 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.
Loyalty marketing
– Astrazeneca Pfizer 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.
Threats Pfizer and AstraZeneca: Marketing an Acquisition (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pfizer and AstraZeneca: Marketing an Acquisition (A) are -
Regulatory challenges
– Astrazeneca Pfizer 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.
Stagnating economy with rate increase
– Astrazeneca Pfizer 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Astrazeneca Pfizer 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) .
Technology acceleration in Forth Industrial Revolution
– Astrazeneca Pfizer has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Astrazeneca Pfizer needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Astrazeneca Pfizer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Astrazeneca Pfizer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Astrazeneca Pfizer is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Astrazeneca Pfizer in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Astrazeneca Pfizer 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.
Environmental challenges
– Astrazeneca Pfizer 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. Astrazeneca Pfizer can take advantage of this fund but it will also bring new competitors in the Sales & Marketing 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 Pfizer and AstraZeneca: Marketing an Acquisition (A), Astrazeneca Pfizer 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 .
Weighted SWOT Analysis of Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Pfizer and AstraZeneca: Marketing an Acquisition (A) 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 Astrazeneca Pfizer needs to make to build a sustainable competitive advantage.