Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction
In 2000, Millennium Pharmaceuticals was the poster child for successful genomic companies. Millennium's fast growth and exuberant valuations were due to the elegant alliances the company had forged with top pharmaceutical, biotechnology, and agricultural companies. However, as the market shifted and Millennium was forced to fully integrate, the type and structure of its alliances no longer worked.
Authors :: Alicia Loffler, Markus Solf, Edward J. Zajac
Swot Analysis of "Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction" written by Alicia Loffler, Markus Solf, Edward J. Zajac includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Millennium Alliances facing as an external strategic factors. Some of the topics covered in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction case study are - Strategic Management Strategies, Financial analysis, Growth strategy, Joint ventures, Product development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Millennium Alliances, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Millennium Alliances 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction can be done for the following purposes –
1. Strategic planning using facts provided in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction case study
2. Improving business portfolio management of Millennium Alliances
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 Millennium Alliances
Strengths Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Millennium Alliances in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction Harvard Business Review case study are -
Analytics focus
– Millennium Alliances 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 Alicia Loffler, Markus Solf, Edward J. Zajac 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.
Low bargaining power of suppliers
– Suppliers of Millennium Alliances in the sector have low bargaining power. Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Millennium Alliances to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Millennium Alliances 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Millennium Alliances in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Millennium Alliances 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 Millennium Alliances is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Millennium Alliances is present in almost all the verticals within the industry. This has provided firm in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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.
High switching costs
– The high switching costs that Millennium Alliances 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.
Innovation driven organization
– Millennium Alliances is one of the most innovative firm in sector. Manager in Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Millennium Alliances 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.
Effective Research and Development (R&D)
– Millennium Alliances 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Millennium Alliances has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Millennium Alliances to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Millennium Alliances is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction are -
Slow to strategic competitive environment developments
– As Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction HBR case study mentions - Millennium Alliances 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.
High cash cycle compare to competitors
Millennium Alliances 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.
Skills based hiring
– The stress on hiring functional specialists at Millennium Alliances 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.
No frontier risks strategy
– After analyzing the HBR case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, is just above the industry average. Millennium Alliances needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, in the dynamic environment Millennium Alliances has struggled to respond to the nimble upstart competition. Millennium Alliances has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Millennium Alliances 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.
Aligning sales with marketing
– It come across in the case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction can leverage the sales team experience to cultivate customer relationships as Millennium Alliances is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Millennium Alliances is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, it seems that the employees of Millennium Alliances 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Millennium Alliances supply chain. Even after few cautionary changes mentioned in the HBR case study - Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Millennium Alliances vulnerable to further global disruptions in South East Asia.
Opportunities Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction | 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction are -
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 Millennium Alliances 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, Millennium Alliances is facing challenges because of the dominance of functional experts in the organization. Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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.
Leveraging digital technologies
– Millennium Alliances 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Millennium Alliances can use these opportunities to build new business models that can help the communities that Millennium Alliances operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Millennium Alliances can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Millennium Alliances 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
– Millennium Alliances 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Millennium Alliances to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Millennium Alliances 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. Millennium Alliances 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 Millennium Alliances 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.
Loyalty marketing
– Millennium Alliances has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Millennium Alliances 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.
Better consumer reach
– The expansion of the 5G network will help Millennium Alliances to increase its market reach. Millennium Alliances 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.
Learning at scale
– Online learning technologies has now opened space for Millennium Alliances 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.
Threats Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction are -
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 Millennium Alliances.
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. Millennium Alliances 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.
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 Millennium Alliances business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Millennium Alliances in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Millennium Alliances 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.
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.
Consumer confidence and its impact on Millennium Alliances 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.
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 Millennium Alliances in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Millennium Alliances 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.
Stagnating economy with rate increase
– Millennium Alliances 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.
Technology acceleration in Forth Industrial Revolution
– Millennium Alliances has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Millennium Alliances 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.
Shortening product life cycle
– it is one of the major threat that Millennium Alliances is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction, Millennium Alliances may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Bayer & Millennium Pharmaceuticals: Success Based on Perfect Interaction 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 Millennium Alliances needs to make to build a sustainable competitive advantage.
