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 - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, talent flight as more people leaving formal jobs, technology disruption, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Learning organization
- Humira Abbott 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 Humira Abbott is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
Training and development
– Humira Abbott has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug 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 Humira Abbott 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 recruit top talent
– Humira Abbott is one of the leading recruiters in the industry. Managers in the Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of Humira Abbott, firm in the HBR case study Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 Humira Abbott supply chain. Even after few cautionary changes mentioned in the HBR case study - Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Humira Abbott vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Humira Abbott products
– To increase the profitability and margins on the products, Humira Abbott needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Humira Abbott 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 - Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Humira Abbott is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Humira Abbott needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Humira Abbott to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
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. Humira Abbott can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Humira Abbott 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.
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.
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.
Developing new processes and practices
– Humira Abbott 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.
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. Humira Abbott 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. Humira Abbott 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.
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.
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.
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.
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.
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. Humira Abbott can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Humira Abbott can use these opportunities to build new business models that can help the communities that Humira Abbott operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Humira Abbott 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 Abbott Laboratories and HUMIRA: Launching a Blockbuster Drug .
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.
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. Humira Abbott can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Humira Abbott with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
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.
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.
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.