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 - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
increasing energy prices, technology disruption, 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 -
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.
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.
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.
Effective Research and Development (R&D)
– Novartis 127,000 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 Novartis: Leading a Global Enterprise - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Learning organization
- Novartis 127,000 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 Novartis 127,000 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Novartis: Leading a Global Enterprise Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Diverse revenue streams
– Novartis 127,000 is present in almost all the verticals within the industry. This has provided firm in Novartis: Leading a Global Enterprise 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.
Cross disciplinary teams
– Horizontal connected teams at the Novartis 127,000 are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Novartis 127,000 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Novartis 127,000 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
Low market penetration in new markets
– Outside its home market of Novartis 127,000, firm in the HBR case study Novartis: Leading a Global Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Novartis 127,000 supply chain. Even after few cautionary changes mentioned in the HBR case study - Novartis: Leading a Global Enterprise, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Novartis 127,000 vulnerable to further global disruptions in South East Asia.
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.
Lack of clear differentiation of Novartis 127,000 products
– To increase the profitability and margins on the products, Novartis 127,000 needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Novartis 127,000 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
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.
Interest costs
– Compare to the competition, Novartis 127,000 has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Novartis 127,000 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Novartis: Leading a Global Enterprise can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
Creating value in data economy
– The success of analytics program of Novartis 127,000 has opened avenues for new revenue streams for the organization in the industry. This can help Novartis 127,000 to build a more holistic ecosystem as suggested in the Novartis: Leading a Global Enterprise case study. Novartis 127,000 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Manufacturing automation
– Novartis 127,000 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Novartis 127,000 is facing challenges because of the dominance of functional experts in the organization. Novartis: Leading a Global Enterprise 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Novartis 127,000 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, Novartis: Leading a Global Enterprise, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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. Novartis 127,000 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Developing new processes and practices
– Novartis 127,000 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.
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 -
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.
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.
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.
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.
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.
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. Novartis 127,000 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Novartis 127,000 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Novartis 127,000 business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Novartis 127,000 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.
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 .
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.
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 .
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.
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.