The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

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

Topics :: Sales & Marketing

Tags :: Marketing, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing energy prices, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, there is increasing trade war between United States & China, etc

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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.

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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

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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 -

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.

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.

Low bargaining power of suppliers

– Suppliers of Alliance Chains in the sector have low bargaining power. The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alliance Chains to manage not only supply disruptions but also source products at highly competitive prices.

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.

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.

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.

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.

Superior customer experience

– The customer experience strategy of Alliance Chains in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Operational resilience

– The operational resilience strategy in the The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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.

Diverse revenue streams

– Alliance Chains is present in almost all the verticals within the industry. This has provided firm in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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.

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.

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.

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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 -

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.

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.

Capital Spending Reduction

– Even during the low interest decade, Alliance Chains has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

High cash cycle compare to competitors

Alliance Chains 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 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 bargaining power of channel partners

– Because of the regulatory requirements, Victor Quinones, Diana Gonzalez, Ines Marchany, Javier Pagan suggests that, Alliance Chains 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.

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.

Products dominated business model

– Even though Alliance Chains 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 - The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains should strive to include more intangible value offerings along with its core products and services.

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.

Workers concerns about automation

– As automation is fast increasing in the segment, Alliance Chains 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.

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.

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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 -

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.

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.

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.

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. Alliance Chains can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Alliance Chains 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.

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.

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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Alliance Chains 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.

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.

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.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Alliance Chains 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. Alliance Chains 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.

Building a culture of innovation

– managers at Alliance Chains 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.

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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 -

High dependence on third party suppliers

– Alliance Chains 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.

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.

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.

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 .

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 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.

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. Alliance Chains 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.

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.

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 Alliance Chains in the Sales & Marketing sector and impact the bottomline of the organization.

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 Alliance Chains business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Alliance Chains in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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.

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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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