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 (D)" written by Kirk O. Hanson, Stephen Weiss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merck Addressing facing as an external strategic factors. Some of the topics covered in Merck & Co., Inc.: Addressing Third-World Needs (D) 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 (D) casestudy better are - – increasing commodity prices, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, 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, geopolitical disruptions, there is increasing trade war between United States & China,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Merck & Co., Inc.: Addressing Third-World Needs (D)
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 (D) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merck Addressing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merck Addressing 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 (D) can be done for the following purposes –
1. Strategic planning using facts provided in Merck & Co., Inc.: Addressing Third-World Needs (D) case study
2. Improving business portfolio management of Merck Addressing
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 Addressing
Strengths Merck & Co., Inc.: Addressing Third-World Needs (D) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merck Addressing in Merck & Co., Inc.: Addressing Third-World Needs (D) Harvard Business Review case study are -
Learning organization
- Merck Addressing 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 Merck Addressing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Merck & Co., Inc.: Addressing Third-World Needs (D) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Merck Addressing is one of the most innovative firm in sector. Manager in Merck & Co., Inc.: Addressing Third-World Needs (D) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Merck & Co., Inc.: Addressing Third-World Needs (D) firm has clearly differentiated products in the market place. This has enabled Merck Addressing to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Merck Addressing to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Merck Addressing in the sector have low bargaining power. Merck & Co., Inc.: Addressing Third-World Needs (D) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merck Addressing to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Merck Addressing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merck Addressing 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.
Cross disciplinary teams
– Horizontal connected teams at the Merck Addressing 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.
High brand equity
– Merck Addressing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Merck Addressing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Merck Addressing 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 Merck Addressing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merck Addressing 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.
High switching costs
– The high switching costs that Merck Addressing 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.
Superior customer experience
– The customer experience strategy of Merck Addressing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Merck Addressing 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 Merck & Co., Inc.: Addressing Third-World Needs (D) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Merck & Co., Inc.: Addressing Third-World Needs (D) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck & Co., Inc.: Addressing Third-World Needs (D) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Merck & Co., Inc.: Addressing Third-World Needs (D), in the dynamic environment Merck Addressing has struggled to respond to the nimble upstart competition. Merck Addressing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Merck & Co., Inc.: Addressing Third-World Needs (D), 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.
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 (D) 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 Addressing has relatively successful track record of launching new products.
High cash cycle compare to competitors
Merck Addressing 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.
Low market penetration in new markets
– Outside its home market of Merck Addressing, firm in the HBR case study Merck & Co., Inc.: Addressing Third-World Needs (D) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Merck & Co., Inc.: Addressing Third-World Needs (D) 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 Merck Addressing 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Merck Addressing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Merck Addressing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merck Addressing to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Merck Addressing 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.
Aligning sales with marketing
– It come across in the case study Merck & Co., Inc.: Addressing Third-World Needs (D) 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 (D) can leverage the sales team experience to cultivate customer relationships as Merck Addressing is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Merck Addressing 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Merck Addressing 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.
Opportunities Merck & Co., Inc.: Addressing Third-World Needs (D) | 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 (D) are -
Better consumer reach
– The expansion of the 5G network will help Merck Addressing to increase its market reach. Merck Addressing 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.
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 Merck Addressing 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, Merck Addressing 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, Merck & Co., Inc.: Addressing Third-World Needs (D), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merck Addressing 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.
Manufacturing automation
– Merck Addressing 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.
Buying journey improvements
– Merck Addressing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Merck & Co., Inc.: Addressing Third-World Needs (D) 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.
Developing new processes and practices
– Merck Addressing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merck Addressing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Addressing 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 Addressing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merck Addressing is facing challenges because of the dominance of functional experts in the organization. Merck & Co., Inc.: Addressing Third-World Needs (D) 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.
Building a culture of innovation
– managers at Merck Addressing 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.
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. Merck Addressing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Merck Addressing 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 (D) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merck Addressing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Merck & Co., Inc.: Addressing Third-World Needs (D) 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 (D) are -
Shortening product life cycle
– it is one of the major threat that Merck Addressing is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merck Addressing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Addressing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Merck Addressing in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Stagnating economy with rate increase
– Merck Addressing 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.
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 Addressing business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Merck Addressing 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.
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 Addressing 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.
Increasing wage structure of Merck Addressing
– 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 Addressing.
Technology acceleration in Forth Industrial Revolution
– Merck Addressing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Merck Addressing 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.
High dependence on third party suppliers
– Merck Addressing 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.
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 Addressing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Merck & Co., Inc.: Addressing Third-World Needs (D) 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 (D) 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 (D) 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 (D) 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 (D) 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 Addressing needs to make to build a sustainable competitive advantage.
