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 inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, geopolitical disruptions, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, technology disruption, 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 -
Operational resilience
– The operational resilience strategy in the Tanner Pharmaceuticals and the Price of a New Drug 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.
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.
Successful track record of launching new products
– Tanner Zorstat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tanner Zorstat 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.
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.
Superior customer experience
– The customer experience strategy of Tanner Zorstat in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Tanner Zorstat 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 Tanner Pharmaceuticals and the Price of a New Drug HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Tanner Zorstat is one of the most innovative firm in sector. Manager in Tanner Pharmaceuticals and the Price of a New Drug Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
High switching costs
– The high switching costs that Tanner Zorstat 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.
Low bargaining power of suppliers
– Suppliers of Tanner Zorstat in the sector have low bargaining power. Tanner Pharmaceuticals and the Price of a New Drug has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tanner Zorstat to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
Slow to strategic competitive environment developments
– As Tanner Pharmaceuticals and the Price of a New Drug HBR case study mentions - Tanner Zorstat 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tanner Zorstat is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tanner Pharmaceuticals and the Price of a New Drug can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Tanner Pharmaceuticals and the Price of a New Drug, 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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tanner Pharmaceuticals and the Price of a New Drug 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 Tanner Zorstat has relatively successful track record of launching new products.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Tanner Zorstat 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. Tanner Zorstat 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 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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tanner Zorstat can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Tanner Zorstat 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tanner Zorstat 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tanner Zorstat 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, Tanner Pharmaceuticals and the Price of a New Drug, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tanner Zorstat in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Tanner Zorstat has opened avenues for new revenue streams for the organization in the industry. This can help Tanner Zorstat to build a more holistic ecosystem as suggested in the Tanner Pharmaceuticals and the Price of a New Drug case study. Tanner Zorstat can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tanner Zorstat is facing challenges because of the dominance of functional experts in the organization. Tanner Pharmaceuticals and the Price of a New Drug case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help 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.
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.
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 -
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.
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.
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.
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 .
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.
Regulatory challenges
– Tanner Zorstat 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tanner Pharmaceuticals and the Price of a New Drug, Tanner Zorstat 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 .
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.
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 Tanner Zorstat business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Tanner Zorstat 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. Tanner Zorstat can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
