Genentech (in 2011): After the Acquisition by Roche SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, wage bills are increasing, 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 -
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.
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.
Low bargaining power of suppliers
– Suppliers of Roche Genentech in the sector have low bargaining power. Genentech (in 2011): After the Acquisition by Roche has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Roche Genentech to manage not only supply disruptions but also source products at highly competitive prices.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Genentech (in 2011): After the Acquisition by Roche firm has clearly differentiated products in the market place. This has enabled Roche Genentech to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Roche Genentech to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Roche Genentech is present in almost all the verticals within the industry. This has provided firm in Genentech (in 2011): After the Acquisition by Roche 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.
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.
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.
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.
Strong track record of project management
– Roche Genentech is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 -
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.
High cash cycle compare to competitors
Roche Genentech 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.
Products dominated business model
– Even though Roche Genentech 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 - Genentech (in 2011): After the Acquisition by Roche should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Genentech (in 2011): After the Acquisition by Roche, in the dynamic environment Roche Genentech has struggled to respond to the nimble upstart competition. Roche Genentech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Roche Genentech is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Roche Genentech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Roche Genentech to focus more on services rather than just following the product oriented approach.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Roche Genentech 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.
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.
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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Roche Genentech is facing challenges because of the dominance of functional experts in the organization. Genentech (in 2011): After the Acquisition by Roche 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.
Better consumer reach
– The expansion of the 5G network will help Roche Genentech to increase its market reach. Roche Genentech 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Roche Genentech 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Roche Genentech 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, Genentech (in 2011): After the Acquisition by Roche, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 Roche Genentech in the consumer business. Now Roche Genentech can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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 Roche Genentech 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.
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.
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 .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Genentech (in 2011): After the Acquisition by Roche, Roche Genentech 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 .
Shortening product life cycle
– it is one of the major threat that Roche Genentech is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Roche Genentech business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Roche Genentech 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.
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.
Increasing wage structure of Roche Genentech
– 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 Roche Genentech.
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.
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.
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.