The Board of Alere, Inc, a leading medical diagnostic firm, is evaluating the offer made by Ron Zwanziger, the firm's founder and former CEO, to acquire the company and take it private. The offer arrives at the end of a tumultuous year for the company, which saw Zwanziger fighting and ultimately losing a confrontation with activist investors Coppersmith Capital. How should the board evaluate this offer? Should they reject it, on the basis that Zwanziger's decision to expand into integrated healthcare solutions was the main reason behind the company's poor stock performance, as Coppersmith claimed? Or should they once more place their trust in Zwanziger's leadership, and in Alere's ability to effectively implement his vision?
Swot Analysis of "Alere" written by Raffaella Sadun, Catherine Slater, Channing Spencer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alere Coppersmith facing as an external strategic factors. Some of the topics covered in Alere case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alere casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, increasing household debt because of falling income levels, geopolitical disruptions, technology disruption, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alere case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alere Coppersmith, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alere Coppersmith 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 Alere can be done for the following purposes –
1. Strategic planning using facts provided in Alere case study
2. Improving business portfolio management of Alere Coppersmith
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 Alere Coppersmith
Strengths Alere | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alere Coppersmith in Alere Harvard Business Review case study are -
Innovation driven organization
– Alere Coppersmith is one of the most innovative firm in sector. Manager in Alere Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Alere Coppersmith 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.
High brand equity
– Alere Coppersmith has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alere Coppersmith to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Alere Coppersmith 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 Raffaella Sadun, Catherine Slater, Channing Spencer 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.
Training and development
– Alere Coppersmith has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alere 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.
Low bargaining power of suppliers
– Suppliers of Alere Coppersmith in the sector have low bargaining power. Alere has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alere Coppersmith to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Alere Coppersmith
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alere Coppersmith does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Alere Coppersmith is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Alere Coppersmith digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alere Coppersmith 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.
Ability to recruit top talent
– Alere Coppersmith is one of the leading recruiters in the industry. Managers in the Alere are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Alere Coppersmith in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Alere Coppersmith has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alere Coppersmith 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.
Weaknesses Alere | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alere are -
Skills based hiring
– The stress on hiring functional specialists at Alere Coppersmith 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Alere Coppersmith 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.
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 Alere Coppersmith supply chain. Even after few cautionary changes mentioned in the HBR case study - Alere, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alere Coppersmith vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Alere Coppersmith is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Alere Coppersmith needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alere Coppersmith to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Alere 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 Alere Coppersmith 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alere Coppersmith is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alere can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Raffaella Sadun, Catherine Slater, Channing Spencer suggests that, Alere Coppersmith 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alere, in the dynamic environment Alere Coppersmith has struggled to respond to the nimble upstart competition. Alere Coppersmith has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Alere Coppersmith 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.
No frontier risks strategy
– After analyzing the HBR case study Alere, 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.
Products dominated business model
– Even though Alere Coppersmith 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 - Alere should strive to include more intangible value offerings along with its core products and services.
Opportunities Alere | 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 Alere are -
Creating value in data economy
– The success of analytics program of Alere Coppersmith has opened avenues for new revenue streams for the organization in the industry. This can help Alere Coppersmith to build a more holistic ecosystem as suggested in the Alere case study. Alere Coppersmith can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Alere Coppersmith 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.
Using analytics as competitive advantage
– Alere Coppersmith 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 Alere - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alere Coppersmith to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Alere Coppersmith 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.
Leveraging digital technologies
– Alere Coppersmith 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.
Learning at scale
– Online learning technologies has now opened space for Alere Coppersmith 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.
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. Alere Coppersmith can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alere Coppersmith is facing challenges because of the dominance of functional experts in the organization. Alere 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.
Buying journey improvements
– Alere Coppersmith can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alere 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alere Coppersmith can use these opportunities to build new business models that can help the communities that Alere Coppersmith operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Alere Coppersmith 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alere Coppersmith can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Alere Coppersmith 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.
Threats Alere External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alere are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alere Coppersmith 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 Alere .
Technology acceleration in Forth Industrial Revolution
– Alere Coppersmith has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Alere Coppersmith 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.
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. Alere Coppersmith needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Alere Coppersmith
– 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 Alere Coppersmith.
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 Alere Coppersmith.
Environmental challenges
– Alere Coppersmith 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. Alere Coppersmith can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Alere Coppersmith 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.
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. Alere Coppersmith will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Alere Coppersmith is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alere Coppersmith with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alere, Alere Coppersmith 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 .
High dependence on third party suppliers
– Alere Coppersmith 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.
Weighted SWOT Analysis of Alere 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 Alere 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 Alere 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 Alere 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 Alere 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 Alere Coppersmith needs to make to build a sustainable competitive advantage.
