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 - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, wage bills are increasing, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, increasing household debt because of falling income levels, 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 -
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.
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 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.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Alliance Chains digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alliance Chains 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.
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.
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.
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.
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.
Training and development
– Alliance Chains has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Alliance Chains, firm in the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains 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 Alliance Chains 's lucrative customers.
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.
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 -
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alliance Chains 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 Alliance Chains to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Alliance Chains has opened avenues for new revenue streams for the organization in the industry. This can help Alliance Chains to build a more holistic ecosystem as suggested in the The Alliance of Community-Based Pharmacy Owners of Puerto Rico: Challenging Competition from U.S. Chains case study. Alliance Chains can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
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.
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.
Consumer confidence and its impact on Alliance Chains demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Alliance Chains is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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 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.
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.
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.
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.
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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