Genentech (in 2011): After the Acquisition by Roche SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Genentech (in 2011): After the Acquisition by Roche
Roche had just finished purchasing the last public shares of Genentech in an effort to secure their expertise in biotechnology. However, the recent failure of the colon cancer drug, Avastin, had raised questions about the partnership. Roche's main motives in the acquisition were to gain rights to Avastin and use it for a myriad of other applications. Positive clinical trials would have lead to significantly increased sales and growth into other cancer applications. Instead, the negative results caused Roche shares to drop by 10 percent. The incident raised questions at Roche about the efficiency of drug development at Genentech. Phase III trial failures represented a significant loss of time and money. And, in this case, the FDA revoked Avastin's approval for treatment of breast cancer causing further harm to revenue opportunities for Roche. Now that Roche was in charge, expectations were raised for producing successful Phase III trials that would bring more products to market. But, what was the appropriate resource allocation for early drug discovery and Phase II and III trials? On one side, Genentech wanted to focus on early drug development as a means to keep the future product pipeline well stocked; on the other side, Roche was focused on getting drugs through Phase II and III trials and into the market to generate revenue.
Authors :: Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang
Swot Analysis of "Genentech (in 2011): After the Acquisition by Roche" written by Marne L. Arthaud-Day, Frank T. Rothaermel, Wei Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Roche Genentech facing as an external strategic factors. Some of the topics covered in Genentech (in 2011): After the Acquisition by Roche case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Genentech (in 2011): After the Acquisition by Roche casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Genentech (in 2011): After the Acquisition by Roche
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Genentech (in 2011): After the Acquisition by Roche case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Roche Genentech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche can be done for the following purposes –
1. Strategic planning using facts provided in Genentech (in 2011): After the Acquisition by Roche case study
2. Improving business portfolio management of Roche Genentech
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 Roche Genentech
Strengths Genentech (in 2011): After the Acquisition by Roche | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Roche Genentech in Genentech (in 2011): After the Acquisition by Roche Harvard Business Review case study are -
Learning organization
- Roche Genentech 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 Roche Genentech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Genentech (in 2011): After the Acquisition by Roche Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Roche Genentech has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Genentech (in 2011): After the Acquisition by Roche 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.
Successful track record of launching new products
– Roche Genentech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Roche Genentech has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Roche Genentech in the sector have low bargaining power. Genentech (in 2011): After the Acquisition by Roche has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Roche Genentech to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Roche Genentech 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 Roche Genentech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Roche Genentech in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Roche Genentech is one of the leading recruiters in the industry. Managers in the Genentech (in 2011): After the Acquisition by Roche are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Roche Genentech is present in almost all the verticals within the industry. This has provided firm in Genentech (in 2011): After the Acquisition by Roche 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.
Operational resilience
– The operational resilience strategy in the Genentech (in 2011): After the Acquisition by Roche 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.
High brand equity
– Roche Genentech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Roche Genentech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Genentech (in 2011): After the Acquisition by Roche | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Genentech (in 2011): After the Acquisition by Roche are -
Slow decision making process
– As mentioned earlier in the report, Roche Genentech 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. Roche Genentech 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.
Slow to strategic competitive environment developments
– As Genentech (in 2011): After the Acquisition by Roche HBR case study mentions - Roche Genentech 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Roche Genentech 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche can leverage the sales team experience to cultivate customer relationships as Roche Genentech is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Genentech (in 2011): After the Acquisition by Roche, is just above the industry average. Roche Genentech 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.
Increasing silos among functional specialists
– The organizational structure of Roche Genentech is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Roche Genentech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Roche Genentech to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Roche Genentech 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 cash cycle compare to competitors
Roche Genentech 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 Roche Genentech, firm in the HBR case study Genentech (in 2011): After the Acquisition by Roche needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Genentech (in 2011): After the Acquisition by Roche, 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.
Skills based hiring
– The stress on hiring functional specialists at Roche Genentech 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.
Opportunities Genentech (in 2011): After the Acquisition by Roche | 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 Genentech (in 2011): After the Acquisition by Roche are -
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 Roche Genentech in the consumer business. Now Roche Genentech can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Roche Genentech is facing challenges because of the dominance of functional experts in the organization. Genentech (in 2011): After the Acquisition by Roche 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.
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. Roche Genentech 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. Roche Genentech 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.
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. Roche Genentech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Roche Genentech 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.
Learning at scale
– Online learning technologies has now opened space for Roche Genentech 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 Roche Genentech to increase its market reach. Roche Genentech 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.
Loyalty marketing
– Roche Genentech 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 Roche Genentech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Roche Genentech can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Genentech (in 2011): After the Acquisition by Roche suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Roche Genentech 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
– Roche Genentech 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.
Creating value in data economy
– The success of analytics program of Roche Genentech has opened avenues for new revenue streams for the organization in the industry. This can help Roche Genentech to build a more holistic ecosystem as suggested in the Genentech (in 2011): After the Acquisition by Roche case study. Roche Genentech can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Genentech (in 2011): After the Acquisition by Roche External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Genentech (in 2011): After the Acquisition by Roche are -
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 Roche Genentech.
Technology acceleration in Forth Industrial Revolution
– Roche Genentech has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Roche Genentech 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Genentech (in 2011): After the Acquisition by Roche, Roche Genentech 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 .
Shortening product life cycle
– it is one of the major threat that Roche Genentech is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Roche Genentech 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.
Increasing wage structure of Roche Genentech
– 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 Roche Genentech.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Roche Genentech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Roche Genentech 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. Roche Genentech can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Roche Genentech needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Roche Genentech 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
– Roche Genentech 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.
Weighted SWOT Analysis of Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Genentech (in 2011): After the Acquisition by Roche 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 Roche Genentech needs to make to build a sustainable competitive advantage.