Genentech (in 2011): After the Acquisition by Roche SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Genentech (in 2011): After the Acquisition by Roche
Roche had just finished purchasing the last public shares of Genentech in an effort to secure their expertise in biotechnology. However, the recent failure of the colon cancer drug, Avastin, had raised questions about the partnership. Roche's main motives in the acquisition were to gain rights to Avastin and use it for a myriad of other applications. Positive clinical trials would have lead to significantly increased sales and growth into other cancer applications. Instead, the negative results caused Roche shares to drop by 10 percent. The incident raised questions at Roche about the efficiency of drug development at Genentech. Phase III trial failures represented a significant loss of time and money. And, in this case, the FDA revoked Avastin's approval for treatment of breast cancer causing further harm to revenue opportunities for Roche. Now that Roche was in charge, expectations were raised for producing successful Phase III trials that would bring more products to market. But, what was the appropriate resource allocation for early drug discovery and Phase II and III trials? On one side, Genentech wanted to focus on early drug development as a means to keep the future product pipeline well stocked; on the other side, Roche was focused on getting drugs through Phase II and III trials and into the market to generate revenue.
Authors :: Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang
Swot Analysis of "Genentech (in 2011): After the Acquisition by Roche" written by Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Roche Genentech facing as an external strategic factors. Some of the topics covered in Genentech (in 2011): After the Acquisition by Roche case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Genentech (in 2011): After the Acquisition by Roche casestudy better are - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing energy prices, wage bills are increasing, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Genentech (in 2011): After the Acquisition by Roche
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Genentech (in 2011): After the Acquisition by Roche case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Roche Genentech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche can be done for the following purposes –
1. Strategic planning using facts provided in Genentech (in 2011): After the Acquisition by Roche case study
2. Improving business portfolio management of Roche Genentech
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 Roche Genentech
Strengths Genentech (in 2011): After the Acquisition by Roche | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Roche Genentech in Genentech (in 2011): After the Acquisition by Roche Harvard Business Review case study are -
High switching costs
– The high switching costs that Roche Genentech has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Genentech (in 2011): After the Acquisition by Roche 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.
Effective Research and Development (R&D)
– Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Roche Genentech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Roche Genentech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Roche Genentech
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Roche Genentech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Roche Genentech 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 Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang 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
– Roche Genentech has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Genentech (in 2011): After the Acquisition by Roche 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.
Cross disciplinary teams
– Horizontal connected teams at the Roche Genentech 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
– Roche Genentech 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 Roche Genentech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Roche Genentech is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Roche Genentech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Genentech (in 2011): After the Acquisition by Roche Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Roche Genentech is one of the most innovative firm in sector. Manager in Genentech (in 2011): After the Acquisition by Roche Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Genentech (in 2011): After the Acquisition by Roche | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Genentech (in 2011): After the Acquisition by Roche are -
High operating costs
– Compare to the competitors, firm in the HBR case study Genentech (in 2011): After the Acquisition by Roche 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 Roche Genentech 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Roche Genentech 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.
Low market penetration in new markets
– Outside its home market of Roche Genentech, firm in the HBR case study Genentech (in 2011): After the Acquisition by Roche needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Genentech (in 2011): After the Acquisition by Roche HBR case study mentions - Roche Genentech 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.
Lack of clear differentiation of Roche Genentech products
– To increase the profitability and margins on the products, Roche Genentech needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Roche Genentech is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Genentech (in 2011): After the Acquisition by Roche 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 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 Roche Genentech supply chain. Even after few cautionary changes mentioned in the HBR case study - Genentech (in 2011): After the Acquisition by Roche, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Roche Genentech vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Genentech (in 2011): After the Acquisition by Roche HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Roche Genentech has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang suggests that, Roche Genentech 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.
Need for greater diversity
– Roche Genentech has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche can leverage the sales team experience to cultivate customer relationships as Roche Genentech is planning to shift buying processes online.
Opportunities Genentech (in 2011): After the Acquisition by Roche | 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 Genentech (in 2011): After the Acquisition by Roche are -
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. Roche Genentech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Roche Genentech 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 Roche Genentech to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Roche Genentech 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.
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. Roche Genentech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Roche Genentech 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Roche Genentech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Roche Genentech 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.
Developing new processes and practices
– Roche Genentech 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Roche Genentech can use these opportunities to build new business models that can help the communities that Roche Genentech operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Roche Genentech 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. Roche Genentech 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.
Learning at scale
– Online learning technologies has now opened space for Roche Genentech 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Roche Genentech 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.
Buying journey improvements
– Roche Genentech can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Genentech (in 2011): After the Acquisition by Roche 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.
Threats Genentech (in 2011): After the Acquisition by Roche External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Genentech (in 2011): After the Acquisition by Roche are -
Consumer confidence and its impact on Roche Genentech 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Roche Genentech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Technology acceleration in Forth Industrial Revolution
– Roche Genentech has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Roche Genentech 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.
Environmental challenges
– Roche Genentech 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. Roche Genentech can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Roche Genentech 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche .
Stagnating economy with rate increase
– Roche Genentech 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.
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. Roche Genentech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Roche Genentech.
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 Roche Genentech in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Roche Genentech 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. Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Roche Genentech needs to make to build a sustainable competitive advantage.
