Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision
Describes the leadership dilemmas facing the top management team of a leading Indian pharmaceutical company--the first in its industry to be listed on the NYSE. Much admired for its impressive growth, Dr. Reddy's stands at a crossroad. How much emphasis should it place on the legacy business of active pharmaceutical ingredients and generics that have brought the company its current stature, and how much should it focus on future business like specialty pharmaceuticals and discovering new chemical entities? The two represent different business models and straddling the strategy, organization, and human resources demands of each one is the challenge for Dr. Reddy's top team.
Swot Analysis of "Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision" written by Bala Chakravarthy, Anand Jha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reddy's Dr facing as an external strategic factors. Some of the topics covered in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision case study are - Strategic Management Strategies, Leadership, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision casestudy better are - – cloud computing is disrupting traditional business models, increasing energy prices, geopolitical disruptions, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reddy's Dr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reddy's Dr 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision can be done for the following purposes –
1. Strategic planning using facts provided in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision case study
2. Improving business portfolio management of Reddy's Dr
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 Reddy's Dr
Strengths Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reddy's Dr in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Reddy's Dr is present in almost all the verticals within the industry. This has provided firm in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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.
Successful track record of launching new products
– Reddy's Dr has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reddy's Dr 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.
Ability to lead change in Strategy & Execution field
– Reddy's Dr is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Reddy's Dr in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Reddy's Dr 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
– Reddy's Dr is one of the leading recruiters in the industry. Managers in the Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Reddy's Dr has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reddy's Dr to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision firm has clearly differentiated products in the market place. This has enabled Reddy's Dr to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Reddy's Dr to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Reddy's Dr 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Reddy's Dr 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 Reddy's Dr
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reddy's Dr does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Reddy's Dr 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 Reddy's Dr is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision are -
Low market penetration in new markets
– Outside its home market of Reddy's Dr, firm in the HBR case study Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Reddy's Dr 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 strategic competitive environment developments
– As Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision HBR case study mentions - Reddy's Dr takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Reddy's Dr 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. Reddy's Dr 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.
Increasing silos among functional specialists
– The organizational structure of Reddy's Dr is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Reddy's Dr needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reddy's Dr to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Reddy's Dr 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Reddy's Dr has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Reddy's Dr has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Reddy's Dr 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 bargaining power of channel partners
– Because of the regulatory requirements, Bala Chakravarthy, Anand Jha suggests that, Reddy's Dr is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision, it seems that the employees of Reddy's Dr don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision | 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision are -
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. Reddy's Dr can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Reddy's Dr 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reddy's Dr can use these opportunities to build new business models that can help the communities that Reddy's Dr operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reddy's Dr 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Reddy's Dr is facing challenges because of the dominance of functional experts in the organization. Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reddy's Dr can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Reddy's Dr 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, Reddy's Dr 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, Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Reddy's Dr can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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.
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. Reddy's Dr can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Reddy's Dr in the consumer business. Now Reddy's Dr can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Reddy's Dr 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.
Better consumer reach
– The expansion of the 5G network will help Reddy's Dr to increase its market reach. Reddy's Dr 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.
Threats Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reddy's Dr 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reddy's Dr with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Reddy's Dr 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. Reddy's Dr can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Reddy's Dr 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 Reddy's Dr is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
High dependence on third party suppliers
– Reddy's Dr 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 Reddy's Dr 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Reddy's Dr.
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. Reddy's Dr needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Reddy's Dr can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Reddy's Dr business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Dr. Reddy's Laboratories Ltd.: Chasing a Daring Vision 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 Reddy's Dr needs to make to build a sustainable competitive advantage.
