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 inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing commodity prices, there is backlash against globalization,
cloud computing is disrupting traditional business models, geopolitical disruptions, 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 -
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.
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.
Ability to lead change in Strategy & Execution field
– Flr Fasa 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 Flr Fasa in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version firm has clearly differentiated products in the market place. This has enabled Flr Fasa to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Flr Fasa to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Flr Fasa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Flr Fasa 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.
Superior customer experience
– The customer experience strategy of Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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.
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 -
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.
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.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Flr Fasa is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Flr Fasa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Flr Fasa to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Flr Fasa is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Flr Fasa 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Mladen Koljatic, Monica Silva suggests that, Flr Fasa 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Flr Fasa 's lucrative customers.
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 -
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.
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.
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 Flr Fasa 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.
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.
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.
Leveraging digital technologies
– Flr Fasa 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.
Using analytics as competitive advantage
– Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Flr Fasa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Flr Fasa 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.
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 -
Technology acceleration in Forth Industrial Revolution
– Flr Fasa has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Flr Fasa needs to keep up with the evolution of technology in the Strategy & Execution 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.
Environmental challenges
– Flr Fasa 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. Flr Fasa can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Flr Fasa 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version .
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.
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 Flr Fasa.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Flr Fasa in the Strategy & Execution industry. The Strategy & Execution 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Flr Fasa is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.