Case Study Description of Gilead: Hepatitis-C Access Strategy (A)
Gilead had come up with an innovative drug for Hepatitis C, which affected 180 million people worldwide. The drug was priced at $1,000 a pill for the US market. Gilead had to decide how to price and market the pill in developing countries that bore the brunt of the disease. The company had earned accolades for its work in HIV/AIDS, where its innovative medicines now accounted for 60% of all patients on Anti-Retroviral (ARV) medicines. Much of this was accomplished through generic licensing, which brought a $10,000/year treatment regimen down to $100! Should the company replicate that strategy for Hepatitis C? If so, how would its US Healthcare customers, who were paying $84,000 per patient, react? On the other hand, Gilead had to balance the interests of its shareholders, who paid $11 billion for an acquisition that led to the new Hepatitis C drug.
Authors :: V. Kasturi Rangan, Vikram Rangan, David E. Bloom
Swot Analysis of "Gilead: Hepatitis-C Access Strategy (A)" written by V. Kasturi Rangan, Vikram Rangan, David E. Bloom includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hepatitis Gilead facing as an external strategic factors. Some of the topics covered in Gilead: Hepatitis-C Access Strategy (A) case study are - Strategic Management Strategies, Health, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Gilead: Hepatitis-C Access Strategy (A) casestudy better are - – increasing commodity prices, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Gilead: Hepatitis-C Access Strategy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gilead: Hepatitis-C Access Strategy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hepatitis Gilead, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hepatitis Gilead 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 Gilead: Hepatitis-C Access Strategy (A) can be done for the following purposes –
1. Strategic planning using facts provided in Gilead: Hepatitis-C Access Strategy (A) case study
2. Improving business portfolio management of Hepatitis Gilead
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 Hepatitis Gilead
Strengths Gilead: Hepatitis-C Access Strategy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hepatitis Gilead in Gilead: Hepatitis-C Access Strategy (A) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Hepatitis Gilead 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.
Superior customer experience
– The customer experience strategy of Hepatitis Gilead in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Hepatitis Gilead in the sector have low bargaining power. Gilead: Hepatitis-C Access Strategy (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hepatitis Gilead to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Sales & Marketing field
– Hepatitis Gilead 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 Hepatitis Gilead in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Hepatitis Gilead is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Hepatitis Gilead 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 Gilead: Hepatitis-C Access Strategy (A) - 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
– Hepatitis Gilead 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 Gilead: Hepatitis-C Access Strategy (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Gilead: Hepatitis-C Access Strategy (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.
High brand equity
– Hepatitis Gilead has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hepatitis Gilead to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Hepatitis Gilead has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hepatitis Gilead 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.
Organizational Resilience of Hepatitis Gilead
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hepatitis Gilead does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Hepatitis Gilead 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 Hepatitis Gilead is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gilead: Hepatitis-C Access Strategy (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Gilead: Hepatitis-C Access Strategy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gilead: Hepatitis-C Access Strategy (A) are -
No frontier risks strategy
– After analyzing the HBR case study Gilead: Hepatitis-C Access Strategy (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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gilead: Hepatitis-C Access Strategy (A), in the dynamic environment Hepatitis Gilead has struggled to respond to the nimble upstart competition. Hepatitis Gilead has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Hepatitis Gilead 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hepatitis Gilead 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.
Increasing silos among functional specialists
– The organizational structure of Hepatitis Gilead is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Hepatitis Gilead needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hepatitis Gilead to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Hepatitis Gilead, firm in the HBR case study Gilead: Hepatitis-C Access Strategy (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Hepatitis Gilead 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 - Gilead: Hepatitis-C Access Strategy (A) should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gilead: Hepatitis-C Access Strategy (A), it seems that the employees of Hepatitis Gilead 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.
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 Hepatitis Gilead supply chain. Even after few cautionary changes mentioned in the HBR case study - Gilead: Hepatitis-C Access Strategy (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hepatitis Gilead vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Hepatitis Gilead 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 cash cycle compare to competitors
Hepatitis Gilead has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Gilead: Hepatitis-C Access Strategy (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 Gilead: Hepatitis-C Access Strategy (A) are -
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 Hepatitis Gilead 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.
Developing new processes and practices
– Hepatitis Gilead can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hepatitis Gilead 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hepatitis Gilead can use these opportunities to build new business models that can help the communities that Hepatitis Gilead operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Building a culture of innovation
– managers at Hepatitis Gilead 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hepatitis Gilead 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hepatitis Gilead is facing challenges because of the dominance of functional experts in the organization. Gilead: Hepatitis-C Access Strategy (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.
Using analytics as competitive advantage
– Hepatitis Gilead has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Gilead: Hepatitis-C Access Strategy (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hepatitis Gilead to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Hepatitis Gilead 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.
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 Hepatitis Gilead in the consumer business. Now Hepatitis Gilead can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Hepatitis Gilead can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gilead: Hepatitis-C Access Strategy (A) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hepatitis Gilead can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Hepatitis Gilead has opened avenues for new revenue streams for the organization in the industry. This can help Hepatitis Gilead to build a more holistic ecosystem as suggested in the Gilead: Hepatitis-C Access Strategy (A) case study. Hepatitis Gilead can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Gilead: Hepatitis-C Access Strategy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gilead: Hepatitis-C Access Strategy (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hepatitis Gilead with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Hepatitis Gilead
– 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 Hepatitis Gilead.
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.
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. Hepatitis Gilead needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Hepatitis Gilead.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hepatitis Gilead 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gilead: Hepatitis-C Access Strategy (A), Hepatitis Gilead 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 Hepatitis Gilead in the Sales & Marketing sector and impact the bottomline of the organization.
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. Hepatitis Gilead 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 Hepatitis Gilead is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hepatitis Gilead can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Hepatitis Gilead 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.
Environmental challenges
– Hepatitis Gilead 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. Hepatitis Gilead can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Gilead: Hepatitis-C Access Strategy (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 Gilead: Hepatitis-C Access Strategy (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 Gilead: Hepatitis-C Access Strategy (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 Gilead: Hepatitis-C Access Strategy (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 Gilead: Hepatitis-C Access Strategy (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 Hepatitis Gilead needs to make to build a sustainable competitive advantage.