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 - – there is backlash against globalization, technology disruption, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Diverse revenue streams
– Flr Fasa is present in almost all the verticals within the industry. This has provided firm in Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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.
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 -
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 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.
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.
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.
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 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Flr Fasa 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 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.
Aligning sales with marketing
– It come across in the case study Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version 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 Farmacias Ahumada S.A. and the Fundacion Las Rosas, Spanish Version can leverage the sales team experience to cultivate customer relationships as Flr Fasa is planning to shift buying processes online.
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 -
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.
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.
Building a culture of innovation
– managers at Flr Fasa 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 Strategy & Execution segment.
Better consumer reach
– The expansion of the 5G network will help Flr Fasa to increase its market reach. Flr Fasa 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.
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.
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. Flr Fasa can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Flr Fasa 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 Flr Fasa to hire the very best people irrespective of their geographical location.
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 -
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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 .
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.
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.
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 Flr Fasa in the Strategy & Execution sector and impact the bottomline of the organization.
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.