The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights
This case is designed for MBA students in M&A or derivatives courses. In January 2011, Sanofi-Aventis was finalizing its offer terms for acquiring Genzyme. The M&A valuation disputes were about the market potential of alemtuzumab, a drug in Genzyme's pipeline, and how quickly Genzyme could resolve some of its manufacturing issues. To bridge the gap in their estimates, advisers had suggested an up-front cash payment and a contingent value right (CVR). Was a CVR the magical solution to bridging the valuation gap?
Swot Analysis of "The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights" written by Pedro Matos, Dmitriy Aleyev, Chong Xu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Genzyme Cvr facing as an external strategic factors. Some of the topics covered in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights case study are - Strategic Management Strategies, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, there is backlash against globalization, wage bills are increasing, supply chains are disrupted by pandemic , increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Genzyme Cvr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights can be done for the following purposes –
1. Strategic planning using facts provided in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights case study
2. Improving business portfolio management of Genzyme Cvr
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 Genzyme Cvr
Strengths The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Genzyme Cvr in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights Harvard Business Review case study are -
Analytics focus
– Genzyme Cvr 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 Pedro Matos, Dmitriy Aleyev, Chong Xu 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights firm has clearly differentiated products in the market place. This has enabled Genzyme Cvr to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Genzyme Cvr to invest into research and development (R&D) and innovation.
Training and development
– Genzyme Cvr has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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.
Highly skilled collaborators
– Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Genzyme Cvr is present in almost all the verticals within the industry. This has provided firm in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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.
Cross disciplinary teams
– Horizontal connected teams at the Genzyme Cvr 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
- Genzyme Cvr 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 Genzyme Cvr is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Genzyme Cvr digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Genzyme Cvr 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.
High brand equity
– Genzyme Cvr has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Genzyme Cvr to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Genzyme Cvr 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.
Operational resilience
– The operational resilience strategy in the The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Finance & Accounting field
– Genzyme Cvr 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 Genzyme Cvr in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights are -
Capital Spending Reduction
– Even during the low interest decade, Genzyme Cvr 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Genzyme Cvr 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.
Products dominated business model
– Even though Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights, 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.
Lack of clear differentiation of Genzyme Cvr products
– To increase the profitability and margins on the products, Genzyme Cvr needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Genzyme Cvr 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.
Aligning sales with marketing
– It come across in the case study The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights can leverage the sales team experience to cultivate customer relationships as Genzyme Cvr is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Genzyme Cvr, firm in the HBR case study The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights, in the dynamic environment Genzyme Cvr has struggled to respond to the nimble upstart competition. Genzyme Cvr has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Genzyme Cvr has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Genzyme Cvr even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Genzyme Cvr 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.
Opportunities The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights | 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights are -
Loyalty marketing
– Genzyme Cvr 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, Genzyme Cvr can use these opportunities to build new business models that can help the communities that Genzyme Cvr operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Genzyme Cvr 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 Genzyme Cvr to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Genzyme Cvr has opened avenues for new revenue streams for the organization in the industry. This can help Genzyme Cvr to build a more holistic ecosystem as suggested in the The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights case study. Genzyme Cvr can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Genzyme Cvr to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Genzyme Cvr can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Genzyme Cvr to increase its market reach. Genzyme Cvr 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 Genzyme Cvr can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Genzyme Cvr in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Genzyme Cvr 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.
Developing new processes and practices
– Genzyme Cvr 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights, 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, Genzyme Cvr is facing challenges because of the dominance of functional experts in the organization. The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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.
Threats The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights are -
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. Genzyme Cvr needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Environmental challenges
– Genzyme Cvr 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. Genzyme Cvr can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Genzyme Cvr can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Genzyme Cvr is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Genzyme Cvr 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights .
Technology acceleration in Forth Industrial Revolution
– Genzyme Cvr has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Genzyme Cvr 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.
Stagnating economy with rate increase
– Genzyme Cvr 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.
Regulatory challenges
– Genzyme Cvr needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Genzyme Cvr with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Genzyme Cvr 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.
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 Genzyme Cvr in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Genzyme Cvr
– 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 Genzyme Cvr.
Weighted SWOT Analysis of The Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Sanofi-Aventis Acquisition of Genzyme: Contingent Value Rights 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 Genzyme Cvr needs to make to build a sustainable competitive advantage.
