Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A)
This is a Thunderbird Case Study.It was late on Thursday, April 22, 2004, and Jean-Francois Dehecq, the Chief Executive Officer (CEO) of Sanofi-Synthei€ˆlabo (Sanofi), France's second largest pharmaceutical company, was sitting in his office thinking about what had happened over the last three months. On January 26, 2004, he had launched a hostile tender offer to acquire Aventis, France's largest pharmaceutical company. The merger between Sanofi and Aventis would have created the world's third largest pharmaceutical company, closing the gap with U.S.-based Pfizer and U.K.-based GlaxoSmith-Kline (GSK). Jean-Francois Dehecq had offered a‚¬48.6 billion, but his offer had been rejected by Aventis's Supervisory Board. Since the end of January, Aventis had been fighting back, launching a poison pill and inviting Novartis, Switzerland's largest pharmaceutical company, to act as a white knight.
Swot Analysis of "Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A)" written by Barbara S. Petitt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sanofi Aventis facing as an external strategic factors. Some of the topics covered in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sanofi Aventis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sanofi Aventis 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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) can be done for the following purposes –
1. Strategic planning using facts provided in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) case study
2. Improving business portfolio management of Sanofi Aventis
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sanofi Aventis
Strengths Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sanofi Aventis in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) Harvard Business Review case study are -
Ability to recruit top talent
– Sanofi Aventis is one of the leading recruiters in the industry. Managers in the Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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.
Training and development
– Sanofi Aventis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) 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.
Low bargaining power of suppliers
– Suppliers of Sanofi Aventis in the sector have low bargaining power. Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sanofi Aventis to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Sanofi Aventis 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 Sanofi Aventis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) firm has clearly differentiated products in the market place. This has enabled Sanofi Aventis to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Sanofi Aventis to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Sanofi Aventis is present in almost all the verticals within the industry. This has provided firm in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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.
High brand equity
– Sanofi Aventis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sanofi Aventis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Sanofi Aventis are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Sanofi Aventis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sanofi Aventis 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
- Sanofi Aventis 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 Sanofi Aventis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Sanofi Aventis 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 Barbara S. Petitt 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.
Organizational Resilience of Sanofi Aventis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sanofi Aventis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A), it seems that the employees of Sanofi Aventis 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, Sanofi Aventis 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.
Low market penetration in new markets
– Outside its home market of Sanofi Aventis, firm in the HBR case study Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Sanofi Aventis 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, Barbara S. Petitt suggests that, Sanofi Aventis 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.
Interest costs
– Compare to the competition, Sanofi Aventis 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.
Increasing silos among functional specialists
– The organizational structure of Sanofi Aventis is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Sanofi Aventis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sanofi Aventis to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
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 Sanofi Aventis supply chain. Even after few cautionary changes mentioned in the HBR case study - Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sanofi Aventis vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A), in the dynamic environment Sanofi Aventis has struggled to respond to the nimble upstart competition. Sanofi Aventis has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Sanofi Aventis 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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) are -
Better consumer reach
– The expansion of the 5G network will help Sanofi Aventis to increase its market reach. Sanofi Aventis will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Sanofi Aventis has opened avenues for new revenue streams for the organization in the industry. This can help Sanofi Aventis to build a more holistic ecosystem as suggested in the Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) case study. Sanofi Aventis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Sanofi Aventis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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.
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 Sanofi Aventis in the consumer business. Now Sanofi Aventis can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Sanofi Aventis 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.
Building a culture of innovation
– managers at Sanofi Aventis 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 Finance & Accounting segment.
Leveraging digital technologies
– Sanofi Aventis 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.
Manufacturing automation
– Sanofi Aventis can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Sanofi Aventis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sanofi Aventis 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 Sanofi Aventis 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 Sanofi Aventis to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Sanofi Aventis 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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sanofi Aventis to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sanofi Aventis 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, Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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.
Threats Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) are -
Stagnating economy with rate increase
– Sanofi Aventis 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sanofi Aventis in the Finance & Accounting industry. The Finance & Accounting 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.
Technology acceleration in Forth Industrial Revolution
– Sanofi Aventis has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Sanofi Aventis needs to keep up with the evolution of technology in the Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sanofi Aventis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Sanofi Aventis 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.
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 Sanofi Aventis.
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. Sanofi Aventis needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Sanofi Aventis business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sanofi Aventis 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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A) .
Regulatory challenges
– Sanofi Aventis 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 Finance & Accounting industry regulations.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sanofi Aventis 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 Sanofi Aventis
– 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 Sanofi Aventis.
Weighted SWOT Analysis of Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi-Synthelabo and Aventis: The Birth of a National Champion (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 Sanofi Aventis needs to make to build a sustainable competitive advantage.