Novartis: Leading a Global Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Novartis: Leading a Global Enterprise
Novartis, the world's leading healthcare company, was formed in 1996 out of a merger of two very different, mid-tier Switzerland-based pharma companies. The case traces the company's evolution over the past 17 years, as it transformed into a truly global enterprise with 127,000 employees of 153 nationalities in 140 countries generating $56.7 billion in 2012 revenues and $9.6 billion in net income, making the firm one of the world's largest and most profitable companies. CEO since 2010, Joe Jimenez had taken over from one of the merger's architects and visionary legacy CEO Daniel Vasella. He recognized that the global health care environment would create severe challenges for Novartis in the years ahead and that Novartis needed to make sure it had the right strategy, structure, talent and spirit to live up to its ambitions.
Authors :: William W. George, Krishna G. Palepu, Carin-Isabel Knoop
Swot Analysis of "Novartis: Leading a Global Enterprise" written by William W. George, Krishna G. Palepu, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Novartis 127,000 facing as an external strategic factors. Some of the topics covered in Novartis: Leading a Global Enterprise case study are - Strategic Management Strategies, Change management, Globalization, Health, Leading teams, Mergers & acquisitions, Organizational culture, Organizational structure, Talent management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Novartis: Leading a Global Enterprise casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Novartis: Leading a Global Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Novartis: Leading a Global Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Novartis 127,000, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Novartis 127,000 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 Novartis: Leading a Global Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Novartis: Leading a Global Enterprise case study
2. Improving business portfolio management of Novartis 127,000
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 Novartis 127,000
Strengths Novartis: Leading a Global Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Novartis 127,000 in Novartis: Leading a Global Enterprise Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Novartis 127,000 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 Novartis 127,000 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Novartis 127,000 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 William W. George, Krishna G. Palepu, Carin-Isabel Knoop can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Novartis 127,000 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Novartis 127,000 in the sector have low bargaining power. Novartis: Leading a Global Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Novartis 127,000 to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Novartis 127,000 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Novartis 127,000 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.
Innovation driven organization
– Novartis 127,000 is one of the most innovative firm in sector. Manager in Novartis: Leading a Global Enterprise Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Novartis 127,000
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Novartis 127,000 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Novartis 127,000 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Novartis 127,000 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.
Highly skilled collaborators
– Novartis 127,000 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 Novartis: Leading a Global Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Novartis: Leading a Global Enterprise 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.
Superior customer experience
– The customer experience strategy of Novartis 127,000 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– Novartis: Leading a Global Enterprise firm has clearly differentiated products in the market place. This has enabled Novartis 127,000 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Novartis 127,000 to invest into research and development (R&D) and innovation.
Weaknesses Novartis: Leading a Global Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Novartis: Leading a Global Enterprise are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Novartis: Leading a Global Enterprise 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 Novartis 127,000 has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Novartis: Leading a Global Enterprise HBR case study mentions - Novartis 127,000 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Novartis: Leading a Global Enterprise 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 Novartis 127,000 's lucrative customers.
Need for greater diversity
– Novartis 127,000 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Novartis: Leading a Global Enterprise, in the dynamic environment Novartis 127,000 has struggled to respond to the nimble upstart competition. Novartis 127,000 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Novartis 127,000 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.
Increasing silos among functional specialists
– The organizational structure of Novartis 127,000 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Novartis 127,000 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Novartis 127,000 to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Novartis: Leading a Global Enterprise, 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 bargaining power of channel partners
– Because of the regulatory requirements, William W. George, Krishna G. Palepu, Carin-Isabel Knoop suggests that, Novartis 127,000 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.
Aligning sales with marketing
– It come across in the case study Novartis: Leading a Global Enterprise 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 Novartis: Leading a Global Enterprise can leverage the sales team experience to cultivate customer relationships as Novartis 127,000 is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Novartis 127,000 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. Novartis 127,000 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 Novartis: Leading a Global Enterprise | 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 Novartis: Leading a Global Enterprise are -
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. Novartis 127,000 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. Novartis 127,000 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.
Better consumer reach
– The expansion of the 5G network will help Novartis 127,000 to increase its market reach. Novartis 127,000 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Novartis 127,000 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Novartis 127,000 to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Novartis 127,000 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Novartis 127,000 can use these opportunities to build new business models that can help the communities that Novartis 127,000 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Novartis 127,000 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.
Using analytics as competitive advantage
– Novartis 127,000 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 Novartis: Leading a Global Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Novartis 127,000 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Novartis 127,000 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Novartis 127,000 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.
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 Novartis 127,000 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.
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 Novartis 127,000 in the consumer business. Now Novartis 127,000 can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Novartis 127,000 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
– Novartis 127,000 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Novartis: Leading a Global Enterprise 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.
Threats Novartis: Leading a Global Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Novartis: Leading a Global Enterprise are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Novartis 127,000 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Novartis 127,000.
Environmental challenges
– Novartis 127,000 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. Novartis 127,000 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Novartis 127,000
– 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 Novartis 127,000.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Novartis: Leading a Global Enterprise, Novartis 127,000 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 .
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 Novartis 127,000 in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Novartis 127,000 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 Novartis 127,000 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Novartis 127,000 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.
Technology acceleration in Forth Industrial Revolution
– Novartis 127,000 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Novartis 127,000 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Novartis 127,000 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 Novartis: Leading a Global Enterprise .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Novartis 127,000 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.
Weighted SWOT Analysis of Novartis: Leading a Global Enterprise 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 Novartis: Leading a Global Enterprise 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 Novartis: Leading a Global Enterprise 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 Novartis: Leading a Global Enterprise 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 Novartis: Leading a Global Enterprise 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 Novartis 127,000 needs to make to build a sustainable competitive advantage.
