Case Study Description of Merck & Co., Inc.: Addressing Third-World Needs (A)
Researchers at Merck & Co. believe that a drug they had developed for animals might be an effective treatment for human river blindness, a debilitating illness that affects hundreds of thousands of poor people in the Third World. The process of development and testing, however, will be enormously costly. Should the company devote critical resources to developing the drug, knowing that, even if it were medically successful, it would yield little financial return? The case presents background on economic and scientific constraints that shape the pharmaceutical industry. It provides a framework for discussing ethical aspects of product innovation and the risks and benefits of investments in research. It may be used in Strategic Management, Business and Society, and Ethics courses.
Authors :: Kirk O. Hanson, Stephen Weiss
Topics :: Strategy & Execution
Tags :: Health, Managing people, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Merck & Co., Inc.: Addressing Third-World Needs (A)" written by Kirk O. Hanson, Stephen Weiss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merck Debilitating facing as an external strategic factors. Some of the topics covered in Merck & Co., Inc.: Addressing Third-World Needs (A) case study are - Strategic Management Strategies, Health, Managing people, Social enterprise, Social responsibility and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Merck & Co., Inc.: Addressing Third-World Needs (A) casestudy better are - – there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, geopolitical disruptions, wage bills are increasing,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Merck & Co., Inc.: Addressing Third-World Needs (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merck & Co., Inc.: Addressing Third-World Needs (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merck Debilitating, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merck Debilitating 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 Merck & Co., Inc.: Addressing Third-World Needs (A) can be done for the following purposes –
1. Strategic planning using facts provided in Merck & Co., Inc.: Addressing Third-World Needs (A) case study
2. Improving business portfolio management of Merck Debilitating
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 Merck Debilitating
Strengths Merck & Co., Inc.: Addressing Third-World Needs (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merck Debilitating in Merck & Co., Inc.: Addressing Third-World Needs (A) Harvard Business Review case study are -
Diverse revenue streams
– Merck Debilitating is present in almost all the verticals within the industry. This has provided firm in Merck & Co., Inc.: Addressing Third-World Needs (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Merck Debilitating 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Merck Debilitating digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merck Debilitating has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Merck Debilitating has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Merck & Co., Inc.: Addressing Third-World Needs (A) 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.
Ability to lead change in Strategy & Execution field
– Merck Debilitating 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 Merck Debilitating in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Merck Debilitating is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Merck Debilitating is one of the most innovative firm in sector. Manager in Merck & Co., Inc.: Addressing Third-World Needs (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Merck & Co., Inc.: Addressing Third-World Needs (A) 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
– Merck Debilitating is one of the leading recruiters in the industry. Managers in the Merck & Co., Inc.: Addressing Third-World Needs (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Merck Debilitating
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Merck Debilitating 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 Merck Debilitating in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Merck Debilitating 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 Merck & Co., Inc.: Addressing Third-World Needs (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck & Co., Inc.: Addressing Third-World Needs (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck Debilitating has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Merck Debilitating is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Merck & Co., Inc.: Addressing Third-World Needs (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Merck Debilitating products
– To increase the profitability and margins on the products, Merck Debilitating needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Merck & Co., Inc.: Addressing Third-World Needs (A), it seems that the employees of Merck Debilitating don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Merck Debilitating 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 - Merck & Co., Inc.: Addressing Third-World Needs (A) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Merck Debilitating 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.
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 Merck Debilitating supply chain. Even after few cautionary changes mentioned in the HBR case study - Merck & Co., Inc.: Addressing Third-World Needs (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merck Debilitating vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck & Co., Inc.: Addressing Third-World Needs (A) can leverage the sales team experience to cultivate customer relationships as Merck Debilitating is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Merck Debilitating 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.
Skills based hiring
– The stress on hiring functional specialists at Merck Debilitating 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.
Increasing silos among functional specialists
– The organizational structure of Merck Debilitating is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Merck Debilitating needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merck Debilitating to focus more on services rather than just following the product oriented approach.
Opportunities Merck & Co., Inc.: Addressing Third-World Needs (A) | 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 Merck & Co., Inc.: Addressing Third-World Needs (A) are -
Using analytics as competitive advantage
– Merck Debilitating 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 Merck & Co., Inc.: Addressing Third-World Needs (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merck Debilitating to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Merck Debilitating can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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. Merck Debilitating 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. Merck Debilitating 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.
Developing new processes and practices
– Merck Debilitating 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, Merck Debilitating can use these opportunities to build new business models that can help the communities that Merck Debilitating 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 Merck Debilitating to increase its market reach. Merck Debilitating 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 Merck Debilitating 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merck Debilitating 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.
Learning at scale
– Online learning technologies has now opened space for Merck Debilitating 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.
Creating value in data economy
– The success of analytics program of Merck Debilitating has opened avenues for new revenue streams for the organization in the industry. This can help Merck Debilitating to build a more holistic ecosystem as suggested in the Merck & Co., Inc.: Addressing Third-World Needs (A) case study. Merck Debilitating can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merck Debilitating 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 Merck Debilitating to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merck Debilitating can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Merck Debilitating can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Merck & Co., Inc.: Addressing Third-World Needs (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merck & Co., Inc.: Addressing Third-World Needs (A) are -
Regulatory challenges
– Merck Debilitating 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.
High dependence on third party suppliers
– Merck Debilitating 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.
Shortening product life cycle
– it is one of the major threat that Merck Debilitating 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. Merck Debilitating 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merck & Co., Inc.: Addressing Third-World Needs (A), Merck Debilitating 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 .
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. Merck Debilitating needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Merck Debilitating 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merck Debilitating 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 Merck & Co., Inc.: Addressing Third-World Needs (A) .
Consumer confidence and its impact on Merck Debilitating 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.
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 Merck Debilitating 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. Merck Debilitating can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Merck Debilitating
– 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 Merck Debilitating.
Stagnating economy with rate increase
– Merck Debilitating 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.
Weighted SWOT Analysis of Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck & Co., Inc.: Addressing Third-World Needs (A) 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 Merck Debilitating needs to make to build a sustainable competitive advantage.