Tanner Pharmaceuticals and the Price of a New Drug SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tanner Pharmaceuticals and the Price of a New Drug
One of the most profitable products for Tanner Pharmaceuticals Inc. (Tanner), a major U.S. pharmaceutical company, was a vaccine with the brand name Zorstat. Tanner was facing increased public scrutiny over the price of Zorstat. The company was being accused of "being greedy and raising prices in ways that victimized vulnerable people." In two days Jack Stevens, the lead independent board member for Tanner, would attend the annual meeting of independent directors. The Zorstat pricing controversy was on the agenda. Stevens would have to take and defend a position on Tanner's drug pricing strategy. Inevitably, there would be a heated discussion on Zorstat and whether management was effectively driving shareholder value with drug pricing decisions.
Swot Analysis of "Tanner Pharmaceuticals and the Price of a New Drug" written by Andrew C. Inkpen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tanner Zorstat facing as an external strategic factors. Some of the topics covered in Tanner Pharmaceuticals and the Price of a New Drug case study are - Strategic Management Strategies, International business, Pricing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tanner Pharmaceuticals and the Price of a New Drug casestudy better are - – increasing energy prices, there is backlash against globalization, supply chains are disrupted by pandemic , wage bills are increasing, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Tanner Pharmaceuticals and the Price of a New Drug
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tanner Pharmaceuticals and the Price of a New Drug case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tanner Zorstat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tanner Zorstat 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 Tanner Pharmaceuticals and the Price of a New Drug can be done for the following purposes –
1. Strategic planning using facts provided in Tanner Pharmaceuticals and the Price of a New Drug case study
2. Improving business portfolio management of Tanner Zorstat
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 Tanner Zorstat
Strengths Tanner Pharmaceuticals and the Price of a New Drug | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tanner Zorstat in Tanner Pharmaceuticals and the Price of a New Drug Harvard Business Review case study are -
Effective Research and Development (R&D)
– Tanner Zorstat 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 Tanner Pharmaceuticals and the Price of a New Drug - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Tanner Zorstat 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 Andrew C. Inkpen 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
– Tanner Zorstat is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Tanner Zorstat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tanner Zorstat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Tanner Zorstat is one of the leading recruiters in the industry. Managers in the Tanner Pharmaceuticals and the Price of a New Drug are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Tanner Pharmaceuticals and the Price of a New Drug firm has clearly differentiated products in the market place. This has enabled Tanner Zorstat to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tanner Zorstat to invest into research and development (R&D) and innovation.
Learning organization
- Tanner Zorstat 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 Tanner Zorstat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tanner Pharmaceuticals and the Price of a New Drug Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Tanner Zorstat is present in almost all the verticals within the industry. This has provided firm in Tanner Pharmaceuticals and the Price of a New Drug 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.
Training and development
– Tanner Zorstat has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tanner Pharmaceuticals and the Price of a New Drug 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.
Cross disciplinary teams
– Horizontal connected teams at the Tanner Zorstat 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.
Organizational Resilience of Tanner Zorstat
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tanner Zorstat does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Tanner Zorstat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tanner Zorstat 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.
Weaknesses Tanner Pharmaceuticals and the Price of a New Drug | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tanner Pharmaceuticals and the Price of a New Drug are -
High bargaining power of channel partners
– Because of the regulatory requirements, Andrew C. Inkpen suggests that, Tanner Zorstat 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Zorstat 's lucrative customers.
Products dominated business model
– Even though Tanner Zorstat 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 - Tanner Pharmaceuticals and the Price of a New Drug should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Tanner Zorstat 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 Tanner Zorstat, firm in the HBR case study Tanner Pharmaceuticals and the Price of a New Drug needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tanner Pharmaceuticals and the Price of a New Drug, is just above the industry average. Tanner Zorstat 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.
Skills based hiring
– The stress on hiring functional specialists at Tanner Zorstat 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, Tanner Zorstat 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tanner Pharmaceuticals and the Price of a New Drug, in the dynamic environment Tanner Zorstat has struggled to respond to the nimble upstart competition. Tanner Zorstat has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Tanner Zorstat is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tanner Zorstat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tanner Zorstat to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Pharmaceuticals and the Price of a New Drug can leverage the sales team experience to cultivate customer relationships as Tanner Zorstat is planning to shift buying processes online.
Opportunities Tanner Pharmaceuticals and the Price of a New Drug | 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 Tanner Pharmaceuticals and the Price of a New Drug are -
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. Tanner Zorstat can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Tanner Zorstat 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 Tanner Zorstat 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.
Manufacturing automation
– Tanner Zorstat 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.
Loyalty marketing
– Tanner Zorstat 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.
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. Tanner Zorstat 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. Tanner Zorstat 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.
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 Tanner Zorstat in the consumer business. Now Tanner Zorstat can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Tanner Zorstat 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.
Developing new processes and practices
– Tanner Zorstat 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tanner Zorstat can use these opportunities to build new business models that can help the communities that Tanner Zorstat operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Tanner Zorstat can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tanner Pharmaceuticals and the Price of a New Drug 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.
Learning at scale
– Online learning technologies has now opened space for Tanner Zorstat 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.
Better consumer reach
– The expansion of the 5G network will help Tanner Zorstat to increase its market reach. Tanner Zorstat 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 Tanner Pharmaceuticals and the Price of a New Drug External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tanner Pharmaceuticals and the Price of a New Drug are -
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. Tanner Zorstat needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Tanner Zorstat 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tanner Zorstat 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 Tanner Pharmaceuticals and the Price of a New Drug .
Stagnating economy with rate increase
– Tanner Zorstat 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.
Increasing wage structure of Tanner Zorstat
– 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 Tanner Zorstat.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tanner Zorstat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Tanner Zorstat.
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 Tanner Zorstat in the Strategy & Execution sector and impact the bottomline of the organization.
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. Tanner Zorstat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Tanner Zorstat is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Tanner Zorstat has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tanner Zorstat 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.
Consumer confidence and its impact on Tanner Zorstat 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.
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.
Weighted SWOT Analysis of Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Zorstat needs to make to build a sustainable competitive advantage.