Theranos Inc.: Pivoting Consumer Health Care SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Theranos Inc.: Pivoting Consumer Health Care
Theranos Inc. (Theranos) was a medical diagnostics enterprise based in Palo Alto, California. Having developed an innovative blood-testing system for deployment in clinical trials by pharmaceutical companies, Theranos was keen on extending the use of its system to individual consumers in the United States and Mexico. In leveraging growth opportunities for its innovation in the burgeoning field of personalized medicine, the company's chief executive officer faced two managerial dilemmas: How should Theranos navigate the chasm between early adopters (the pharmaceutical companies) and mainstream consumers? And how should Theranos navigate the cost-benefit trade-off, as perceived by individual consumers, in a bid to promote product adoption in the mainstream market?
Swot Analysis of "Theranos Inc.: Pivoting Consumer Health Care" written by Kersi Antia, Rajesh Chandy, Ramasastry Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Theranos Navigate facing as an external strategic factors. Some of the topics covered in Theranos Inc.: Pivoting Consumer Health Care case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Theranos Inc.: Pivoting Consumer Health Care casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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%, there is backlash against globalization,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Theranos Inc.: Pivoting Consumer Health Care
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Theranos Inc.: Pivoting Consumer Health Care case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Theranos Navigate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Theranos Navigate 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 Theranos Inc.: Pivoting Consumer Health Care can be done for the following purposes –
1. Strategic planning using facts provided in Theranos Inc.: Pivoting Consumer Health Care case study
2. Improving business portfolio management of Theranos Navigate
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 Theranos Navigate
Strengths Theranos Inc.: Pivoting Consumer Health Care | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Theranos Navigate in Theranos Inc.: Pivoting Consumer Health Care Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Theranos Navigate 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.
Organizational Resilience of Theranos Navigate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Theranos Navigate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Theranos Inc.: Pivoting Consumer Health Care firm has clearly differentiated products in the market place. This has enabled Theranos Navigate to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Theranos Navigate to invest into research and development (R&D) and innovation.
Learning organization
- Theranos Navigate 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 Theranos Navigate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Theranos Inc.: Pivoting Consumer Health Care Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Theranos Navigate 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.
Strong track record of project management
– Theranos Navigate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Theranos Navigate is one of the leading recruiters in the industry. Managers in the Theranos Inc.: Pivoting Consumer Health Care are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Theranos Navigate 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 Theranos Inc.: Pivoting Consumer Health Care - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Theranos Navigate is present in almost all the verticals within the industry. This has provided firm in Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Navigate in the sector have low bargaining power. Theranos Inc.: Pivoting Consumer Health Care has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Theranos Navigate to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Theranos Inc.: Pivoting Consumer Health Care 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
– Theranos Navigate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Theranos Navigate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Theranos Inc.: Pivoting Consumer Health Care | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Theranos Inc.: Pivoting Consumer Health Care are -
Slow to strategic competitive environment developments
– As Theranos Inc.: Pivoting Consumer Health Care HBR case study mentions - Theranos Navigate takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Theranos Navigate 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Theranos Inc.: Pivoting Consumer Health Care, in the dynamic environment Theranos Navigate has struggled to respond to the nimble upstart competition. Theranos Navigate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Theranos Navigate supply chain. Even after few cautionary changes mentioned in the HBR case study - Theranos Inc.: Pivoting Consumer Health Care, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Theranos Navigate vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Theranos Inc.: Pivoting Consumer Health Care, is just above the industry average. Theranos Navigate 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.
Lack of clear differentiation of Theranos Navigate products
– To increase the profitability and margins on the products, Theranos Navigate needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Theranos Navigate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Theranos Inc.: Pivoting Consumer Health Care can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Theranos Navigate 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, Kersi Antia, Rajesh Chandy, Ramasastry Chandrasekhar suggests that, Theranos Navigate 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 Theranos Navigate 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 - Theranos Inc.: Pivoting Consumer Health Care should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Navigate 's lucrative customers.
Opportunities Theranos Inc.: Pivoting Consumer Health Care | 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 Theranos Inc.: Pivoting Consumer Health Care are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Theranos Navigate 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 Theranos Navigate to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Theranos Navigate 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.
Better consumer reach
– The expansion of the 5G network will help Theranos Navigate to increase its market reach. Theranos Navigate 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.
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. Theranos Navigate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Theranos Navigate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Theranos Inc.: Pivoting Consumer Health Care 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Theranos Navigate can use these opportunities to build new business models that can help the communities that Theranos Navigate operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Theranos Navigate 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.
Building a culture of innovation
– managers at Theranos Navigate 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.
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 Theranos Navigate 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Theranos Navigate 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, Theranos Inc.: Pivoting Consumer Health Care, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Theranos Navigate 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Theranos Navigate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Theranos Navigate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Theranos Inc.: Pivoting Consumer Health Care External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Theranos Inc.: Pivoting Consumer Health Care are -
Regulatory challenges
– Theranos Navigate 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 Theranos Navigate business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Theranos Inc.: Pivoting Consumer Health Care, Theranos Navigate 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 .
Environmental challenges
– Theranos Navigate 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. Theranos Navigate can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Theranos Navigate 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 Theranos Navigate 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 Theranos Navigate in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Theranos Navigate 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.
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. Theranos Navigate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Theranos Navigate 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 Theranos Navigate.
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.
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. Theranos Navigate 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.
Weighted SWOT Analysis of Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Inc.: Pivoting Consumer Health Care 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 Theranos Navigate needs to make to build a sustainable competitive advantage.
