Biocon: From Generics Manufacturing to Biopharmaceutical Innovation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Biocon: From Generics Manufacturing to Biopharmaceutical Innovation
Incorporated in 1978 as a joint venture between Biocon Biochemicals Ltd, Ireland and a company led by Ms. Kiran Mazumdar-Shaw, a young Indian entrepreneur, Biocon had long depended on revenues from the production of enzymes and generic drugs. However, competitive pressure from within the country as well as from other developing economies like China was quickly eroding price levels in these lines of business. Moreover, the 2005 adoption of WTO TRIPS in India meant that the generics-based strategy that many of India's pharma and biotech companies had followed might not be viable anymore. To continue on its current growth path, Biocon needed to consider moving from being a producer of biogenerics to becoming a global biopharmaceutical innovator. Concerned with strategy in an emerging industry, sheds light on the effects of clusters on strategy, as well as the effects of national and supranational factors on strategy. Leadership issues and low-cost strategies for diversification are also addressed.
Authors :: Jeroen Van Den Berg, Michael J. Enright, Venkat Subramanian
Swot Analysis of "Biocon: From Generics Manufacturing to Biopharmaceutical Innovation" written by Jeroen Van Den Berg, Michael J. Enright, Venkat Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Biocon Biopharmaceutical facing as an external strategic factors. Some of the topics covered in Biocon: From Generics Manufacturing to Biopharmaceutical Innovation case study are - Strategic Management Strategies, Innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Biocon: From Generics Manufacturing to Biopharmaceutical Innovation casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of Biocon: From Generics Manufacturing to Biopharmaceutical Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Biocon: From Generics Manufacturing to Biopharmaceutical Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Biocon Biopharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Biocon Biopharmaceutical 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation can be done for the following purposes –
1. Strategic planning using facts provided in Biocon: From Generics Manufacturing to Biopharmaceutical Innovation case study
2. Improving business portfolio management of Biocon Biopharmaceutical
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 Biocon Biopharmaceutical
Strengths Biocon: From Generics Manufacturing to Biopharmaceutical Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Biocon Biopharmaceutical in Biocon: From Generics Manufacturing to Biopharmaceutical Innovation Harvard Business Review case study are -
Effective Research and Development (R&D)
– Biocon Biopharmaceutical 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Biocon Biopharmaceutical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Biocon Biopharmaceutical 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Biocon: From Generics Manufacturing to Biopharmaceutical Innovation firm has clearly differentiated products in the market place. This has enabled Biocon Biopharmaceutical to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Biocon Biopharmaceutical to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Biocon Biopharmaceutical in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Biocon Biopharmaceutical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Biocon Biopharmaceutical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Biocon Biopharmaceutical 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 Biocon Biopharmaceutical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Biocon Biopharmaceutical 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.
Diverse revenue streams
– Biocon Biopharmaceutical is present in almost all the verticals within the industry. This has provided firm in Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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.
Highly skilled collaborators
– Biocon Biopharmaceutical 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Biocon Biopharmaceutical 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.
Organizational Resilience of Biocon Biopharmaceutical
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Biocon Biopharmaceutical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Biocon Biopharmaceutical in the sector have low bargaining power. Biocon: From Generics Manufacturing to Biopharmaceutical Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Biocon Biopharmaceutical to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Biocon: From Generics Manufacturing to Biopharmaceutical Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Biocon: From Generics Manufacturing to Biopharmaceutical Innovation are -
High operating costs
– Compare to the competitors, firm in the HBR case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon Biopharmaceutical 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Biocon Biopharmaceutical, firm in the HBR case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Biocon Biopharmaceutical 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.
No frontier risks strategy
– After analyzing the HBR case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation, in the dynamic environment Biocon Biopharmaceutical has struggled to respond to the nimble upstart competition. Biocon Biopharmaceutical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Biocon Biopharmaceutical 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Biocon Biopharmaceutical is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Biocon Biopharmaceutical 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 - Biocon: From Generics Manufacturing to Biopharmaceutical Innovation should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation can leverage the sales team experience to cultivate customer relationships as Biocon Biopharmaceutical is planning to shift buying processes online.
Interest costs
– Compare to the competition, Biocon Biopharmaceutical 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.
Increasing silos among functional specialists
– The organizational structure of Biocon Biopharmaceutical is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Biocon Biopharmaceutical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Biocon Biopharmaceutical to focus more on services rather than just following the product oriented approach.
Opportunities Biocon: From Generics Manufacturing to Biopharmaceutical Innovation | 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation are -
Learning at scale
– Online learning technologies has now opened space for Biocon Biopharmaceutical 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Biocon Biopharmaceutical is facing challenges because of the dominance of functional experts in the organization. Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Biocon Biopharmaceutical can use these opportunities to build new business models that can help the communities that Biocon Biopharmaceutical operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Biocon Biopharmaceutical 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
– Biocon Biopharmaceutical 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.
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 Biocon Biopharmaceutical in the consumer business. Now Biocon Biopharmaceutical can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Biocon Biopharmaceutical 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.
Buying journey improvements
– Biocon Biopharmaceutical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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.
Using analytics as competitive advantage
– Biocon Biopharmaceutical 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Biocon Biopharmaceutical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Biocon Biopharmaceutical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Biocon Biopharmaceutical 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, Biocon: From Generics Manufacturing to Biopharmaceutical Innovation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Biocon Biopharmaceutical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Biocon Biopharmaceutical 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.
Threats Biocon: From Generics Manufacturing to Biopharmaceutical Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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. Biocon Biopharmaceutical 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.
Stagnating economy with rate increase
– Biocon Biopharmaceutical 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.
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.
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. Biocon Biopharmaceutical 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
– Biocon Biopharmaceutical 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Biocon Biopharmaceutical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Biocon Biopharmaceutical 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.
Increasing wage structure of Biocon Biopharmaceutical
– 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 Biocon Biopharmaceutical.
Regulatory challenges
– Biocon Biopharmaceutical 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. Biocon Biopharmaceutical 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 Biocon Biopharmaceutical 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 Biocon Biopharmaceutical in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon: From Generics Manufacturing to Biopharmaceutical Innovation 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 Biocon Biopharmaceutical needs to make to build a sustainable competitive advantage.