Case Study Description of Oral Insulin: Breakthrough Innovation at Biocon
This case deals with the innovation challenges of a medium sized firm (under $1 billion) in an emerging economy (India), particularly the challenges of product development and commercialization. The management has to decide how to proceed with a promising novel formula for oral insulin - a promising therapeutic area both in terms of financial returns as well as social impact. The company had spent several years of R&D in getting the drug through Phase I and Phase II trials, and was entering the most critical stage, Phase III. The case is set in 2009, a period that was punctuated with a lot of economic uncertainty. Students are asked to decide if Biocon should go ahead with Phase III, and if so, whether it should be done locally or globally and with a partner or alone. The case also deals with transitioning research and development strategies in emerging markets, wherein firms that have traditionally focused on 'imitation' (or generic drugs) are moving to high risk drug discovery.
Authors :: Nita Sachan, Prasad Kaipa, Anand Nandkumar, Charles Dhanaraj
Swot Analysis of "Oral Insulin: Breakthrough Innovation at Biocon" written by Nita Sachan, Prasad Kaipa, Anand Nandkumar, Charles Dhanaraj includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Phase Biocon facing as an external strategic factors. Some of the topics covered in Oral Insulin: Breakthrough Innovation at Biocon case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Operations management, Research & development, Strategy, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Oral Insulin: Breakthrough Innovation at Biocon casestudy better are - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of Oral Insulin: Breakthrough Innovation at Biocon
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Oral Insulin: Breakthrough Innovation at Biocon case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Phase Biocon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Phase Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon can be done for the following purposes –
1. Strategic planning using facts provided in Oral Insulin: Breakthrough Innovation at Biocon case study
2. Improving business portfolio management of Phase Biocon
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 Phase Biocon
Strengths Oral Insulin: Breakthrough Innovation at Biocon | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Phase Biocon in Oral Insulin: Breakthrough Innovation at Biocon Harvard Business Review case study are -
High brand equity
– Phase Biocon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Phase Biocon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Phase Biocon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Phase Biocon 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.
Operational resilience
– The operational resilience strategy in the Oral Insulin: Breakthrough Innovation at Biocon 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 recruit top talent
– Phase Biocon is one of the leading recruiters in the industry. Managers in the Oral Insulin: Breakthrough Innovation at Biocon are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Phase Biocon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Phase Biocon in the sector have low bargaining power. Oral Insulin: Breakthrough Innovation at Biocon has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Phase Biocon to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Phase Biocon 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.
Training and development
– Phase Biocon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Oral Insulin: Breakthrough Innovation at Biocon 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.
Organizational Resilience of Phase Biocon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Phase Biocon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Phase Biocon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Phase Biocon 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 Phase Biocon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Oral Insulin: Breakthrough Innovation at Biocon firm has clearly differentiated products in the market place. This has enabled Phase Biocon to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Phase Biocon to invest into research and development (R&D) and innovation.
Weaknesses Oral Insulin: Breakthrough Innovation at Biocon | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Oral Insulin: Breakthrough Innovation at Biocon are -
Workers concerns about automation
– As automation is fast increasing in the segment, Phase Biocon 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.
No frontier risks strategy
– After analyzing the HBR case study Oral Insulin: Breakthrough Innovation at Biocon, 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.
Interest costs
– Compare to the competition, Phase Biocon 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.
Increasing silos among functional specialists
– The organizational structure of Phase Biocon is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Phase Biocon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Phase Biocon to focus more on services rather than just following the product 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 Phase Biocon supply chain. Even after few cautionary changes mentioned in the HBR case study - Oral Insulin: Breakthrough Innovation at Biocon, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Phase Biocon vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Phase Biocon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Oral Insulin: Breakthrough Innovation at Biocon can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Oral Insulin: Breakthrough Innovation at Biocon 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 Phase Biocon 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Nita Sachan, Prasad Kaipa, Anand Nandkumar, Charles Dhanaraj suggests that, Phase Biocon is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Phase Biocon 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.
Slow to strategic competitive environment developments
– As Oral Insulin: Breakthrough Innovation at Biocon HBR case study mentions - Phase Biocon 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Oral Insulin: Breakthrough Innovation at Biocon, in the dynamic environment Phase Biocon has struggled to respond to the nimble upstart competition. Phase Biocon has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Oral Insulin: Breakthrough Innovation at Biocon | 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 Oral Insulin: Breakthrough Innovation at Biocon are -
Buying journey improvements
– Phase Biocon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Oral Insulin: Breakthrough Innovation at Biocon 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Phase Biocon can use these opportunities to build new business models that can help the communities that Phase Biocon operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Phase Biocon to increase its market reach. Phase Biocon 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 Phase Biocon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Phase Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Phase Biocon 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. Phase Biocon can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Phase Biocon 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Phase Biocon 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 Phase Biocon to hire the very best people irrespective of their geographical location.
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. Phase Biocon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Phase Biocon 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Phase Biocon 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.
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 Phase Biocon 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.
Developing new processes and practices
– Phase Biocon 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.
Threats Oral Insulin: Breakthrough Innovation at Biocon External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Oral Insulin: Breakthrough Innovation at Biocon are -
Consumer confidence and its impact on Phase Biocon 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.
Environmental challenges
– Phase Biocon 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. Phase Biocon can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Phase Biocon is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Phase Biocon 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Phase Biocon 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.
Technology acceleration in Forth Industrial Revolution
– Phase Biocon has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Phase Biocon 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Phase Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon .
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.
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 Phase Biocon business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Phase Biocon.
High dependence on third party suppliers
– Phase Biocon 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.
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 Phase Biocon in the Strategy & Execution sector and impact the bottomline 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. Phase Biocon 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.
Weighted SWOT Analysis of Oral Insulin: Breakthrough Innovation at Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon 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 Oral Insulin: Breakthrough Innovation at Biocon 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 Phase Biocon needs to make to build a sustainable competitive advantage.