Case Study Description of Genzyme: The Synvisc-One Investment Decision
Executives at biotechnology firm Genzyme are debating funding a clinical trial for a new version of a medical device called Synvisc. The trial is expensive and the odds of success are not high, but the upside is substantial. The case presents a common business question: invest or not? The case forces students to wrestle with a number of complex issues and analyze the financials of their decisions.
Swot Analysis of "Genzyme: The Synvisc-One Investment Decision" written by Tim Calkins, Ann Deming includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Synvisc Genzyme facing as an external strategic factors. Some of the topics covered in Genzyme: The Synvisc-One Investment Decision case study are - Strategic Management Strategies, Financial management, Marketing, Research & development and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Genzyme: The Synvisc-One Investment Decision casestudy better are - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Genzyme: The Synvisc-One Investment Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Genzyme: The Synvisc-One Investment Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Synvisc Genzyme, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Synvisc Genzyme 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 Genzyme: The Synvisc-One Investment Decision can be done for the following purposes –
1. Strategic planning using facts provided in Genzyme: The Synvisc-One Investment Decision case study
2. Improving business portfolio management of Synvisc Genzyme
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 Synvisc Genzyme
Strengths Genzyme: The Synvisc-One Investment Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Synvisc Genzyme in Genzyme: The Synvisc-One Investment Decision Harvard Business Review case study are -
Successful track record of launching new products
– Synvisc Genzyme has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Synvisc Genzyme 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.
Highly skilled collaborators
– Synvisc Genzyme 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 Genzyme: The Synvisc-One Investment Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Synvisc Genzyme 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 Tim Calkins, Ann Deming 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.
Effective Research and Development (R&D)
– Synvisc Genzyme 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 Genzyme: The Synvisc-One Investment Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Synvisc Genzyme in the sector have low bargaining power. Genzyme: The Synvisc-One Investment Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Synvisc Genzyme to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Genzyme: The Synvisc-One Investment Decision firm has clearly differentiated products in the market place. This has enabled Synvisc Genzyme to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Synvisc Genzyme to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Synvisc Genzyme is present in almost all the verticals within the industry. This has provided firm in Genzyme: The Synvisc-One Investment Decision 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Synvisc Genzyme digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Synvisc Genzyme 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.
Strong track record of project management
– Synvisc Genzyme is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Synvisc Genzyme 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.
Learning organization
- Synvisc Genzyme 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 Synvisc Genzyme is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Genzyme: The Synvisc-One Investment Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Synvisc Genzyme 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 Synvisc Genzyme in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Genzyme: The Synvisc-One Investment Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Genzyme: The Synvisc-One Investment Decision are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Genzyme: The Synvisc-One Investment Decision, in the dynamic environment Synvisc Genzyme has struggled to respond to the nimble upstart competition. Synvisc Genzyme has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Genzyme: The Synvisc-One Investment Decision, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Genzyme: The Synvisc-One Investment Decision, is just above the industry average. Synvisc Genzyme 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.
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 Synvisc Genzyme supply chain. Even after few cautionary changes mentioned in the HBR case study - Genzyme: The Synvisc-One Investment Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Synvisc Genzyme vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Genzyme: The Synvisc-One Investment Decision 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 Genzyme: The Synvisc-One Investment Decision can leverage the sales team experience to cultivate customer relationships as Synvisc Genzyme is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Genzyme: The Synvisc-One Investment Decision, it seems that the employees of Synvisc Genzyme 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 operating costs
– Compare to the competitors, firm in the HBR case study Genzyme: The Synvisc-One Investment Decision 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 Synvisc Genzyme 's lucrative customers.
Interest costs
– Compare to the competition, Synvisc Genzyme 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 cash cycle compare to competitors
Synvisc Genzyme 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Genzyme: The Synvisc-One Investment Decision HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Synvisc Genzyme has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Synvisc Genzyme, firm in the HBR case study Genzyme: The Synvisc-One Investment Decision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Genzyme: The Synvisc-One Investment Decision | 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 Genzyme: The Synvisc-One Investment Decision are -
Developing new processes and practices
– Synvisc Genzyme can develop new processes and procedures in Finance & Accounting 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.
Using analytics as competitive advantage
– Synvisc Genzyme 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 Genzyme: The Synvisc-One Investment Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Synvisc Genzyme to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Synvisc Genzyme is facing challenges because of the dominance of functional experts in the organization. Genzyme: The Synvisc-One Investment Decision 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.
Manufacturing automation
– Synvisc Genzyme 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.
Buying journey improvements
– Synvisc Genzyme can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Genzyme: The Synvisc-One Investment Decision 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.
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 Synvisc Genzyme 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.
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 Synvisc Genzyme in the consumer business. Now Synvisc Genzyme can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Synvisc Genzyme can use these opportunities to build new business models that can help the communities that Synvisc Genzyme operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help Synvisc Genzyme to increase its market reach. Synvisc Genzyme 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Synvisc Genzyme can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Synvisc Genzyme 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Synvisc Genzyme 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. Synvisc Genzyme 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.
Creating value in data economy
– The success of analytics program of Synvisc Genzyme has opened avenues for new revenue streams for the organization in the industry. This can help Synvisc Genzyme to build a more holistic ecosystem as suggested in the Genzyme: The Synvisc-One Investment Decision case study. Synvisc Genzyme can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Genzyme: The Synvisc-One Investment Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Genzyme: The Synvisc-One Investment Decision are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Synvisc Genzyme 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 Genzyme: The Synvisc-One Investment Decision .
Stagnating economy with rate increase
– Synvisc Genzyme 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.
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 Synvisc Genzyme.
Technology acceleration in Forth Industrial Revolution
– Synvisc Genzyme has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Synvisc Genzyme 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.
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. Synvisc Genzyme 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Genzyme: The Synvisc-One Investment Decision, Synvisc Genzyme may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Synvisc Genzyme 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.
Environmental challenges
– Synvisc Genzyme 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. Synvisc Genzyme can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Synvisc Genzyme with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Synvisc Genzyme 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 Synvisc Genzyme business can come under increasing regulations regarding data privacy, data security, etc.
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. Synvisc Genzyme can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Genzyme: The Synvisc-One Investment Decision 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 Genzyme: The Synvisc-One Investment Decision 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 Genzyme: The Synvisc-One Investment Decision 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 Genzyme: The Synvisc-One Investment Decision 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 Genzyme: The Synvisc-One Investment Decision 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 Synvisc Genzyme needs to make to build a sustainable competitive advantage.