The Highly Regulated German Medical Supplies Industry (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Highly Regulated German Medical Supplies Industry (A)
Executives in heavily regulated industries often feel their hands are tied by rules and regulations which some claim to even interfere with their ability to innovate. As such, it is not uncommon to find regulated firms competing in the same way for decades without ever challenging the status quo. The case "Rehability (A)" describes the conditions of the highly regulated medical supplies industry in Germany and shows how traditional players, bounded by the conventional logic about how to compete in such an industry, focused on providing the lowest-cost standardized products and the widest range of ancillary supplements in stores while overlooking the pain points experienced by users of these products, thereby trapping themselves in ever intensifying and price-based competition.
Authors :: W. Chan Kim, Renee Mauborgne, Lauren Hancock Mathys
Swot Analysis of "The Highly Regulated German Medical Supplies Industry (A)" written by W. Chan Kim, Renee Mauborgne, Lauren Hancock Mathys includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Regulated Supplies facing as an external strategic factors. Some of the topics covered in The Highly Regulated German Medical Supplies Industry (A) case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Highly Regulated German Medical Supplies Industry (A) casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of The Highly Regulated German Medical Supplies Industry (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Highly Regulated German Medical Supplies Industry (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Regulated Supplies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Regulated Supplies 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 The Highly Regulated German Medical Supplies Industry (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Highly Regulated German Medical Supplies Industry (A) case study
2. Improving business portfolio management of Regulated Supplies
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 Regulated Supplies
Strengths The Highly Regulated German Medical Supplies Industry (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Regulated Supplies in The Highly Regulated German Medical Supplies Industry (A) Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Regulated Supplies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Regulated Supplies 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.
Organizational Resilience of Regulated Supplies
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Regulated Supplies does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Regulated Supplies 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 W. Chan Kim, Renee Mauborgne, Lauren Hancock Mathys 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.
Training and development
– Regulated Supplies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Highly Regulated German Medical Supplies Industry (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Regulated Supplies is one of the leading recruiters in the industry. Managers in the The Highly Regulated German Medical Supplies Industry (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Regulated Supplies is one of the most innovative firm in sector. Manager in The Highly Regulated German Medical Supplies Industry (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Regulated Supplies 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 Regulated Supplies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Highly Regulated German Medical Supplies Industry (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Strategy & Execution industry
– The Highly Regulated German Medical Supplies Industry (A) firm has clearly differentiated products in the market place. This has enabled Regulated Supplies to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Regulated Supplies to invest into research and development (R&D) and innovation.
High brand equity
– Regulated Supplies has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Regulated Supplies to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Regulated Supplies 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.
Cross disciplinary teams
– Horizontal connected teams at the Regulated Supplies 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.
Low bargaining power of suppliers
– Suppliers of Regulated Supplies in the sector have low bargaining power. The Highly Regulated German Medical Supplies Industry (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Regulated Supplies to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses The Highly Regulated German Medical Supplies Industry (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Highly Regulated German Medical Supplies Industry (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study The Highly Regulated German Medical Supplies Industry (A) 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 Regulated Supplies 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Regulated Supplies is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Regulated Supplies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Regulated Supplies to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Highly Regulated German Medical Supplies Industry (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Regulated Supplies has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Highly Regulated German Medical Supplies Industry (A), in the dynamic environment Regulated Supplies has struggled to respond to the nimble upstart competition. Regulated Supplies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Regulated Supplies is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Highly Regulated German Medical Supplies Industry (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Regulated Supplies 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.
High cash cycle compare to competitors
Regulated Supplies 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Regulated Supplies 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.
Low market penetration in new markets
– Outside its home market of Regulated Supplies, firm in the HBR case study The Highly Regulated German Medical Supplies Industry (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Regulated Supplies 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. Regulated Supplies 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.
Capital Spending Reduction
– Even during the low interest decade, Regulated Supplies 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.
Opportunities The Highly Regulated German Medical Supplies Industry (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Highly Regulated German Medical Supplies Industry (A) are -
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 Regulated Supplies in the consumer business. Now Regulated Supplies can target international markets with far fewer capital restrictions requirements than the existing system.
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. Regulated Supplies 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. Regulated Supplies 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Regulated Supplies 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.
Creating value in data economy
– The success of analytics program of Regulated Supplies has opened avenues for new revenue streams for the organization in the industry. This can help Regulated Supplies to build a more holistic ecosystem as suggested in the The Highly Regulated German Medical Supplies Industry (A) case study. Regulated Supplies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Regulated Supplies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Highly Regulated German Medical Supplies Industry (A) 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
– Regulated Supplies 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Regulated Supplies 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, The Highly Regulated German Medical Supplies Industry (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Regulated Supplies 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 Regulated Supplies to hire the very best people irrespective of their geographical location.
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. Regulated Supplies can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Regulated Supplies 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Regulated Supplies is facing challenges because of the dominance of functional experts in the organization. The Highly Regulated German Medical Supplies Industry (A) 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.
Better consumer reach
– The expansion of the 5G network will help Regulated Supplies to increase its market reach. Regulated Supplies will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Regulated Supplies 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.
Threats The Highly Regulated German Medical Supplies Industry (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Highly Regulated German Medical Supplies Industry (A) 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. Regulated Supplies 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.
Regulatory challenges
– Regulated Supplies 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.
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 Regulated Supplies in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Regulated Supplies high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Regulated Supplies 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 Regulated Supplies 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 Regulated Supplies 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.
Environmental challenges
– Regulated Supplies needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Regulated Supplies can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Regulated Supplies 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.
Increasing wage structure of Regulated Supplies
– 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 Regulated Supplies.
Technology acceleration in Forth Industrial Revolution
– Regulated Supplies has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Regulated Supplies 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Regulated Supplies 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 The Highly Regulated German Medical Supplies Industry (A) .
Weighted SWOT Analysis of The Highly Regulated German Medical Supplies Industry (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Highly Regulated German Medical Supplies Industry (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Highly Regulated German Medical Supplies Industry (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Highly Regulated German Medical Supplies Industry (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Highly Regulated German Medical Supplies Industry (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Regulated Supplies needs to make to build a sustainable competitive advantage.
