The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains
The presence in Puerto Rico of U.S. drugstore chains like Walgreens and CVS, as well as megastores like Walmart, Costco, and Kmart led to the closure of around 30 percent of locally owned community-based pharmacies between 2005 and 2011. To address competition from U.S. chains, owner-pharmacists pursued collective action, including organizing buying groups and, in 2009, the Alliance of Community-Based Pharmacy Owners. One of the two purposes of the Alliance was to educate consumers on how "patriotic" and beneficial it was for them to buy at community-based pharmacies instead of U.S. chains. The other was to help Alliance members (pharmacists) improve the skills needed to manage their businesses and confront outsiders. By December 2011, however, the Alliance was barely surviving due to the lack of sufficient members. A new strategic roadmap for the Alliance was needed if it was to become the organization its founders planned.
Authors :: Victor Quinones, Diana Gonzalez, Ines Marchany, Javier Pagan
Swot Analysis of "The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains" written by Victor Quinones, Diana Gonzalez, Ines Marchany, Javier Pagan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alliance Chains facing as an external strategic factors. Some of the topics covered in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains casestudy better are - – cloud computing is disrupting traditional business models, technology disruption, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alliance Chains, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains can be done for the following purposes –
1. Strategic planning using facts provided in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains case study
2. Improving business portfolio management of Alliance Chains
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 Alliance Chains
Strengths The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alliance Chains in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains firm has clearly differentiated products in the market place. This has enabled Alliance Chains to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Alliance Chains to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Alliance Chains is one of the leading recruiters in the industry. Managers in the The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Sales & Marketing field
– Alliance Chains 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 Alliance Chains in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Alliance Chains 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 Alliance Chains is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Alliance Chains 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.
Highly skilled collaborators
– Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Alliance Chains
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alliance Chains does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Alliance Chains has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alliance Chains to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Alliance Chains 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
– Alliance Chains has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alliance Chains 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.
Strong track record of project management
– Alliance Chains is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, in the dynamic environment Alliance Chains has struggled to respond to the nimble upstart competition. Alliance Chains has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, is just above the industry average. Alliance Chains 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 Alliance Chains supply chain. Even after few cautionary changes mentioned in the HBR case study - The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alliance Chains vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 Alliance Chains has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Alliance Chains 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.
Slow to strategic competitive environment developments
– As The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains HBR case study mentions - Alliance Chains 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.
Increasing silos among functional specialists
– The organizational structure of Alliance Chains is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Alliance Chains needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alliance Chains to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Alliance Chains 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, it seems that the employees of Alliance Chains 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.
No frontier risks strategy
– After analyzing the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Alliance Chains products
– To increase the profitability and margins on the products, Alliance Chains needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains | 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains are -
Using analytics as competitive advantage
– Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alliance Chains 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 Alliance Chains 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.
Developing new processes and practices
– Alliance Chains 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.
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 Alliance Chains 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.
Leveraging digital technologies
– Alliance Chains 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
– Alliance Chains 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alliance Chains 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, The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alliance Chains is facing challenges because of the dominance of functional experts in the organization. The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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.
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 Alliance Chains in the consumer business. Now Alliance Chains 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, Alliance Chains can use these opportunities to build new business models that can help the communities that Alliance Chains operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alliance Chains 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
– Alliance Chains 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.
Better consumer reach
– The expansion of the 5G network will help Alliance Chains to increase its market reach. Alliance Chains 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.
Threats The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains are -
Environmental challenges
– Alliance Chains 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. Alliance Chains can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alliance Chains with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Alliance Chains.
Stagnating economy with rate increase
– Alliance Chains can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains .
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. Alliance Chains needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Alliance Chains 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.
Increasing wage structure of Alliance Chains
– 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 Alliance Chains.
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.
Technology acceleration in Forth Industrial Revolution
– Alliance Chains has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Alliance Chains needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains, Alliance Chains 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 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Alliance Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 Alliance Chains needs to make to build a sustainable competitive advantage.
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