Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug
In August 2002, the FDA had notified the executive steering committee for Abbott Laboratories' new rheumatoid arthritis drug to expect approval significantly ahead of schedule. If everything went smoothly, the compound D2E7 (brand name HUMIRA) would be approved for sale in the United States before the end of the year. This gave Abbott and its HUMIRA brand team no more than four months to complete preparations for the product's launch. Abbott acquired D2E7, a biologic disease-modifying antirheumatic drug, when the company purchased Knoll Pharmaceuticals in March 2001. With a significant head start and combined 2002 sales anticipated to exceed $2 billion, Enbrel (from Immunex, later acquired by Amgen) and Remicade (from the Johnson & Johnson subsidiary Centocor) would provide HUMIRA with tough competition. Yet, with the rheumatoid arthritis market expected to grow to over $7.5 billion by 2008, there was still a significant opportunity for Abbott. The executive steering committee knew that the HUMIRA team would have to orchestrate every aspect of the product's global launch carefully to quickly and effectively establish HUMIRA in this challenging market.
Authors :: Stefanos Zenios, Robert Chess, Lyn Denend
Swot Analysis of "Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug" written by Stefanos Zenios, Robert Chess, Lyn Denend includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Humira Abbott facing as an external strategic factors. Some of the topics covered in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug case study are - Strategic Management Strategies, Financial analysis, Government, Marketing, Product development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Humira Abbott, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Humira Abbott 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug can be done for the following purposes –
1. Strategic planning using facts provided in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug case study
2. Improving business portfolio management of Humira Abbott
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 Humira Abbott
Strengths Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Humira Abbott in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Humira Abbott digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Humira Abbott 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.
Effective Research and Development (R&D)
– Humira Abbott 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug - 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
– Humira Abbott has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Humira Abbott to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Humira Abbott 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 Stefanos Zenios, Robert Chess, Lyn Denend 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.
Successful track record of launching new products
– Humira Abbott has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Humira Abbott 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.
Innovation driven organization
– Humira Abbott is one of the most innovative firm in sector. Manager in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Humira Abbott in the sector have low bargaining power. Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Humira Abbott to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Humira Abbott is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Humira Abbott is present in almost all the verticals within the industry. This has provided firm in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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.
Organizational Resilience of Humira Abbott
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Humira Abbott does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Humira Abbott 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 Humira Abbott in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Humira Abbott 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug are -
Capital Spending Reduction
– Even during the low interest decade, Humira Abbott has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug can leverage the sales team experience to cultivate customer relationships as Humira Abbott is planning to shift buying processes online.
Interest costs
– Compare to the competition, Humira Abbott 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.
Need for greater diversity
– Humira Abbott 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.
High cash cycle compare to competitors
Humira Abbott 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.
Slow decision making process
– As mentioned earlier in the report, Humira Abbott has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Humira Abbott even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug, in the dynamic environment Humira Abbott has struggled to respond to the nimble upstart competition. Humira Abbott has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Humira Abbott 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug, it seems that the employees of Humira Abbott 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Humira Abbott is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Humira Abbott 's lucrative customers.
Opportunities Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug | 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Humira Abbott 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 Humira Abbott to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Humira Abbott can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Humira Abbott can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Humira Abbott 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Humira Abbott 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.
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 Humira Abbott 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Humira Abbott 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, Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Humira Abbott is facing challenges because of the dominance of functional experts in the organization. Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Humira Abbott 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.
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 Humira Abbott in the consumer business. Now Humira Abbott can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Humira Abbott 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Humira Abbott to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Humira Abbott has opened avenues for new revenue streams for the organization in the industry. This can help Humira Abbott to build a more holistic ecosystem as suggested in the Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug case study. Humira Abbott can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Humira Abbott 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.
Threats Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug are -
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 Humira Abbott in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Humira Abbott 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.
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.
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 Humira Abbott business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Humira Abbott is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Humira Abbott 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 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. Humira Abbott needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Humira Abbott has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Humira Abbott 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 Humira Abbott 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 wage structure of Humira Abbott
– 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 Humira Abbott.
Stagnating economy with rate increase
– Humira Abbott 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.
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. Humira Abbott 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.
High dependence on third party suppliers
– Humira Abbott 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.
Weighted SWOT Analysis of Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Humira Abbott needs to make to build a sustainable competitive advantage.