Cipla Global Ltd.: Generics versus Drug Discovery SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cipla Global Ltd.: Generics versus Drug Discovery
Cipla Global Ltd. (CGL) is a real-life, undisguised decision case. CGL is one of India's top pharmaceutical companies. Thanks to India's process patent regime (1970-2005), Dr. Yusuf Hamied, the company's chairman, managed to catapult the company to its position as a leading generics manufacturer. However, in 2005, India changed its Patents Act to make it TRIPS compliant. Faced with Western pharmaceutical companies' 'evergreening', CGL became a prominent crusader against multinationals. It fought and won patent cases in Indian courts. On the other hand, the government of India took advantage of the TRIPS provisions to authorize Indian companies to manufacture copies of patented drugs without the patent holder's permission. This infuriated Western pharmaceutical companies because they saw this provision as an infringement on their rights, which would lead to decreased revenues. As a consequence, they started lobbying their respective governments to put pressure on the Indian government. The case ends with a dilemma about the best course of action for CGL going forward, given the various options offered by the industry, on the one hand, and the ambitions of its chairman, on the other.
Swot Analysis of "Cipla Global Ltd.: Generics versus Drug Discovery" written by V.S. Pai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cgl Cipla facing as an external strategic factors. Some of the topics covered in Cipla Global Ltd.: Generics versus Drug Discovery case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cipla Global Ltd.: Generics versus Drug Discovery casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, cloud computing is disrupting traditional business models,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Cipla Global Ltd.: Generics versus Drug Discovery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cipla Global Ltd.: Generics versus Drug Discovery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cgl Cipla, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cgl Cipla 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 Cipla Global Ltd.: Generics versus Drug Discovery can be done for the following purposes –
1. Strategic planning using facts provided in Cipla Global Ltd.: Generics versus Drug Discovery case study
2. Improving business portfolio management of Cgl Cipla
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 Cgl Cipla
Strengths Cipla Global Ltd.: Generics versus Drug Discovery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cgl Cipla in Cipla Global Ltd.: Generics versus Drug Discovery Harvard Business Review case study are -
Successful track record of launching new products
– Cgl Cipla has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cgl Cipla 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.
Low bargaining power of suppliers
– Suppliers of Cgl Cipla in the sector have low bargaining power. Cipla Global Ltd.: Generics versus Drug Discovery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cgl Cipla to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Cgl Cipla 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 Cipla Global Ltd.: Generics versus Drug Discovery HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Cgl Cipla 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 V.S. Pai 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.
Strong track record of project management
– Cgl Cipla is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Cipla Global Ltd.: Generics versus Drug Discovery firm has clearly differentiated products in the market place. This has enabled Cgl Cipla to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cgl Cipla to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Cgl Cipla is present in almost all the verticals within the industry. This has provided firm in Cipla Global Ltd.: Generics versus Drug Discovery 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cgl Cipla digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cgl Cipla 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 brand equity
– Cgl Cipla has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cgl Cipla to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Cgl Cipla 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.
Learning organization
- Cgl Cipla 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 Cgl Cipla is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cipla Global Ltd.: Generics versus Drug Discovery Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Cgl Cipla has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cipla Global Ltd.: Generics versus Drug Discovery 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.
Weaknesses Cipla Global Ltd.: Generics versus Drug Discovery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cipla Global Ltd.: Generics versus Drug Discovery are -
Increasing silos among functional specialists
– The organizational structure of Cgl Cipla is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cgl Cipla needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cgl Cipla to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cipla Global Ltd.: Generics versus Drug Discovery, it seems that the employees of Cgl Cipla 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cipla Global Ltd.: Generics versus Drug Discovery, in the dynamic environment Cgl Cipla has struggled to respond to the nimble upstart competition. Cgl Cipla has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Cgl Cipla 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.
Low market penetration in new markets
– Outside its home market of Cgl Cipla, firm in the HBR case study Cipla Global Ltd.: Generics versus Drug Discovery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Cgl Cipla 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cgl Cipla is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cipla Global Ltd.: Generics versus Drug Discovery can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cipla Global Ltd.: Generics versus Drug Discovery, is just above the industry average. Cgl Cipla 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.
Products dominated business model
– Even though Cgl Cipla has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Cipla Global Ltd.: Generics versus Drug Discovery should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Cgl Cipla 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.
Slow decision making process
– As mentioned earlier in the report, Cgl Cipla 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. Cgl Cipla 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.
Opportunities Cipla Global Ltd.: Generics versus Drug Discovery | 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 Cipla Global Ltd.: Generics versus Drug Discovery are -
Better consumer reach
– The expansion of the 5G network will help Cgl Cipla to increase its market reach. Cgl Cipla 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 Cgl Cipla 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.
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. Cgl Cipla 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. Cgl Cipla 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.
Creating value in data economy
– The success of analytics program of Cgl Cipla has opened avenues for new revenue streams for the organization in the industry. This can help Cgl Cipla to build a more holistic ecosystem as suggested in the Cipla Global Ltd.: Generics versus Drug Discovery case study. Cgl Cipla can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cgl Cipla 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cgl Cipla 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, Cipla Global Ltd.: Generics versus Drug Discovery, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Cgl Cipla can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Cgl Cipla can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cipla Global Ltd.: Generics versus Drug Discovery 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cgl Cipla 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.
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. Cgl Cipla 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 Cgl Cipla in the consumer business. Now Cgl Cipla can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cgl Cipla is facing challenges because of the dominance of functional experts in the organization. Cipla Global Ltd.: Generics versus Drug Discovery 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 Cgl Cipla can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Cipla Global Ltd.: Generics versus Drug Discovery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cipla Global Ltd.: Generics versus Drug Discovery are -
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 Cgl Cipla business can come under increasing regulations regarding data privacy, data security, etc.
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
– Cgl Cipla 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.
Stagnating economy with rate increase
– Cgl Cipla 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.
Regulatory challenges
– Cgl Cipla 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.
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. Cgl Cipla can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cipla Global Ltd.: Generics versus Drug Discovery, Cgl Cipla 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cgl Cipla with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Cgl Cipla has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Cgl Cipla 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, Cgl Cipla 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 Cipla Global Ltd.: Generics versus Drug Discovery .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cgl Cipla 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 Cgl Cipla.
Weighted SWOT Analysis of Cipla Global Ltd.: Generics versus Drug Discovery 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 Cipla Global Ltd.: Generics versus Drug Discovery 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 Cipla Global Ltd.: Generics versus Drug Discovery 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 Cipla Global Ltd.: Generics versus Drug Discovery 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 Cipla Global Ltd.: Generics versus Drug Discovery 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 Cgl Cipla needs to make to build a sustainable competitive advantage.
