Case Study Description of The Novartis Malaria Initiative
The Novartis Malaria Initiative was designed, as a result of a precedent-setting agreement with the World Health Organization in 2001, to provide a breakthrough treatment for malaria-"at no profit"-for public health systems. What had begun as an exemplary act of corporate responsibility had succeeded beyond any expectations. In 2012, for the second year in a row, Novartis had manufactured and distributed over 100 million units of the anti-malarial drug Coartem A?. But with the significantly increased volumes came increased costs, bringing into question the sustainability of the program. In 2013, Dr. Linus Igwemezie, executive vice president and head of the Novartis Malaria Initiative, reflected on the evolution of the program and the way forward. His goal was to expand access to Coartem in the private sector through a low-margin, high-volume social business model to eventually enable the Malaria Initiative to break even and become financially sustainable. Was this the right strategy?
Authors :: Michael Chu, Vincent Dessain, Emilie Billaud
Topics :: Strategy & Execution
Tags :: Social enterprise, Social responsibility, Strategy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "The Novartis Malaria Initiative" written by Michael Chu, Vincent Dessain, Emilie Billaud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Malaria Novartis facing as an external strategic factors. Some of the topics covered in The Novartis Malaria Initiative case study are - Strategic Management Strategies, Social enterprise, Social responsibility, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Novartis Malaria Initiative casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of The Novartis Malaria Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Novartis Malaria Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Malaria Novartis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Malaria Novartis 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 The Novartis Malaria Initiative can be done for the following purposes –
1. Strategic planning using facts provided in The Novartis Malaria Initiative case study
2. Improving business portfolio management of Malaria Novartis
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 Malaria Novartis
Strengths The Novartis Malaria Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Malaria Novartis in The Novartis Malaria Initiative Harvard Business Review case study are -
Diverse revenue streams
– Malaria Novartis is present in almost all the verticals within the industry. This has provided firm in The Novartis Malaria Initiative 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.
Ability to lead change in Strategy & Execution field
– Malaria Novartis is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Malaria Novartis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Malaria Novartis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Malaria Novartis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Malaria Novartis 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 The Novartis Malaria Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Malaria Novartis 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 Michael Chu, Vincent Dessain, Emilie Billaud 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.
High switching costs
– The high switching costs that Malaria Novartis 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
– Malaria Novartis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Malaria Novartis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Malaria Novartis is one of the leading recruiters in the industry. Managers in the The Novartis Malaria Initiative are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Malaria Novartis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Malaria Novartis 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.
Training and development
– Malaria Novartis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Novartis Malaria Initiative 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.
Strong track record of project management
– Malaria Novartis 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 Malaria Novartis digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Malaria Novartis 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 The Novartis Malaria Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Novartis Malaria Initiative are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Novartis Malaria Initiative 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 Malaria Novartis has relatively successful track record of launching new products.
Need for greater diversity
– Malaria Novartis has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Malaria Novartis 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.
Low market penetration in new markets
– Outside its home market of Malaria Novartis, firm in the HBR case study The Novartis Malaria Initiative needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Malaria Novartis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Novartis Malaria Initiative 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 The Novartis Malaria Initiative, is just above the industry average. Malaria Novartis 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.
No frontier risks strategy
– After analyzing the HBR case study The Novartis Malaria Initiative, 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.
Slow decision making process
– As mentioned earlier in the report, Malaria Novartis 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. Malaria Novartis 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Novartis Malaria Initiative 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 Malaria Novartis 's lucrative customers.
Slow to strategic competitive environment developments
– As The Novartis Malaria Initiative HBR case study mentions - Malaria Novartis 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.
Increasing silos among functional specialists
– The organizational structure of Malaria Novartis is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Malaria Novartis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Malaria Novartis to focus more on services rather than just following the product oriented approach.
Opportunities The Novartis Malaria Initiative | 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 The Novartis Malaria Initiative are -
Better consumer reach
– The expansion of the 5G network will help Malaria Novartis to increase its market reach. Malaria Novartis 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.
Building a culture of innovation
– managers at Malaria Novartis 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.
Leveraging digital technologies
– Malaria Novartis 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.
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 Malaria Novartis in the consumer business. Now Malaria Novartis can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Malaria Novartis 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.
Manufacturing automation
– Malaria Novartis 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
– Malaria Novartis 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Malaria Novartis is facing challenges because of the dominance of functional experts in the organization. The Novartis Malaria Initiative 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.
Creating value in data economy
– The success of analytics program of Malaria Novartis has opened avenues for new revenue streams for the organization in the industry. This can help Malaria Novartis to build a more holistic ecosystem as suggested in the The Novartis Malaria Initiative case study. Malaria Novartis can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Malaria Novartis can use these opportunities to build new business models that can help the communities that Malaria Novartis operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Malaria Novartis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Novartis Malaria Initiative 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Malaria Novartis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Malaria Novartis 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, The Novartis Malaria Initiative, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats The Novartis Malaria Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Novartis Malaria Initiative are -
Increasing wage structure of Malaria Novartis
– 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 Malaria Novartis.
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.
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 Malaria Novartis business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Malaria Novartis 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 The Novartis Malaria Initiative .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Malaria Novartis 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.
Technology acceleration in Forth Industrial Revolution
– Malaria Novartis has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Malaria Novartis 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.
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 Malaria Novartis in the Strategy & Execution sector and impact the bottomline 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 The Novartis Malaria Initiative, Malaria Novartis 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
– Malaria Novartis 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.
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. Malaria Novartis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Malaria Novartis needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Malaria Novartis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Malaria Novartis 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.
Weighted SWOT Analysis of The Novartis Malaria Initiative 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 The Novartis Malaria Initiative 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 The Novartis Malaria Initiative 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 The Novartis Malaria Initiative 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 The Novartis Malaria Initiative 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 Malaria Novartis needs to make to build a sustainable competitive advantage.
