Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version
Describes the alliance between Farmacias Ahumada S.A. (FASA), the largest drugstore chain in Chile, and the Las Rosas Foundation (Fundacion Las Rosas, or FLR), a nonprofit organization that provides shelter and care to needy elders. The collaboration began in 1997. The board at FASA opted to partner with a NGO to enhance its public image as a good community neighbor. FASA trained its salespeople to ask drugstore customers for a small monetary contribution at store cash registers to benefit FLR. By 2002, fundraising among FASA customers amounted to $381,000, covering approximately 5% of FLR's operating expenses. One half of store purchases resulted in a small donation for FLR. In recent years, FLR underwent remarkable growth. However, this growth called for an increase in financial resources if the institution were to fulfill its mission appropriately. The nonprofit was offered the chance to enter into a new partnership with an international supermarket chain. A new alliance posed a potential risk to the relationship with FASA, and the foundation's vice-president faced a critical decision. The visibility of a new partnership between FLR and the supermarket might make FLR a less attractive partner for the drugstore chain. Addresses issues of alliance development, strategy valuation, and selection of cross-sector collaborations.
Swot Analysis of "Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version" written by Mladen Koljatic, Monica Silva includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Flr Fasa facing as an external strategic factors. Some of the topics covered in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version case study are - Strategic Management Strategies, Joint ventures, Social enterprise and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version casestudy better are - – increasing commodity prices, wage bills are increasing, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flr Fasa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version case study
2. Improving business portfolio management of Flr Fasa
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Flr Fasa
Strengths Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flr Fasa in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version Harvard Business Review case study are -
Organizational Resilience of Flr Fasa
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Flr Fasa does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Flr Fasa 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 Mladen Koljatic, Monica Silva 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.
Cross disciplinary teams
– Horizontal connected teams at the Flr Fasa 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.
Effective Research and Development (R&D)
– Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Flr Fasa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Flr Fasa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Flr Fasa is one of the most innovative firm in sector. Manager in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Flr Fasa is one of the leading recruiters in the industry. Managers in the Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Flr Fasa digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Flr Fasa 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.
Low bargaining power of suppliers
– Suppliers of Flr Fasa in the sector have low bargaining power. Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Flr Fasa to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Flr Fasa 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.
Training and development
– Flr Fasa has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version are -
Slow decision making process
– As mentioned earlier in the report, Flr Fasa 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. Flr Fasa 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Flr Fasa 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 Flr Fasa 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 - Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Flr Fasa 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, in the dynamic environment Flr Fasa has struggled to respond to the nimble upstart competition. Flr Fasa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, it seems that the employees of Flr Fasa 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.
Slow to strategic competitive environment developments
– As Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version HBR case study mentions - Flr Fasa 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 Flr Fasa, firm in the HBR case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Flr Fasa 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 Flr Fasa supply chain. Even after few cautionary changes mentioned in the HBR case study - Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Flr Fasa vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Opportunities Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version | 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Flr Fasa in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Flr Fasa has opened avenues for new revenue streams for the organization in the industry. This can help Flr Fasa to build a more holistic ecosystem as suggested in the Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version case study. Flr Fasa can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Flr Fasa 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
– Flr Fasa can develop new processes and procedures in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Flr Fasa can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Flr Fasa can use these opportunities to build new business models that can help the communities that Flr Fasa operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Flr Fasa can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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 Flr Fasa in the consumer business. Now Flr Fasa can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Flr Fasa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Flr Fasa 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, Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Flr Fasa 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Flr Fasa is facing challenges because of the dominance of functional experts in the organization. Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Flr Fasa 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. Flr Fasa 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.
Threats Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version are -
Stagnating economy with rate increase
– Flr Fasa 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.
High dependence on third party suppliers
– Flr Fasa 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Flr Fasa can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version, Flr Fasa may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Flr Fasa needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Flr Fasa 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 Strategy & Execution industry regulations.
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. Flr Fasa 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Flr Fasa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Flr Fasa 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.
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.
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 Flr Fasa business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Flr Fasa
– 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 Flr Fasa.
Weighted SWOT Analysis of Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Flr Fasa needs to make to build a sustainable competitive advantage.
