Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India
"With the publication of CK Prahalad's "The Fortune at the Bottom of the Pyramid" (2005), the poor were suddenly seen as a potential market in the eyes of multinational corporations (MNCs). Although poor, the BOP is a large and growing market. The development community tends to focus on meeting the needs of the poorest of the poor (the 1 billion people who live on less than US$1 a day), but there is a larger segment of the low-income population, comprised of 3.8 billion people with incomes between $2 and $5 a day, that could be the focus of a market-oriented approach. They have no bank accounts, no access to modern financial services, no phones, are dependent on informal or subsistence livelihoods, and lack access to amenities and basic healthcare. Influenced by Prahalad's work, the top management at Novartis decided that it was time to seriously consider the pursuit of commercial opportunities among the world's poor. The case offers a description of the first steps to setting up the Arogya Parivar initiative by Novartis in India and raises strategic questions like how to improve its supply chain reliability, how to deal with the fact that many consumers were women and yet there were few female health educators, how to make the treatment affordable, whether to launch new brands of medicines for this segment, how to convince consumers to seek medical treatment and ensure compliance with the treatment protocol, etc., going forward. Please visit the dedicated case website http://cases.insead.edu/arogya-parivar/ (copy and paste the url into a browser) to access case videos and other support material."
Authors :: Amitava Chattopadhyay, Jean Wee, Anuj Pasrjia, Olivier Jarry
Swot Analysis of "Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India" written by Amitava Chattopadhyay, Jean Wee, Anuj Pasrjia, Olivier Jarry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Parivar Arogya facing as an external strategic factors. Some of the topics covered in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India case study are - Strategic Management Strategies, Innovation, Marketing, Social enterprise, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Parivar Arogya, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Parivar Arogya 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India can be done for the following purposes –
1. Strategic planning using facts provided in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India case study
2. Improving business portfolio management of Parivar Arogya
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 Parivar Arogya
Strengths Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Parivar Arogya in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India Harvard Business Review case study are -
Diverse revenue streams
– Parivar Arogya is present in almost all the verticals within the industry. This has provided firm in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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.
Successful track record of launching new products
– Parivar Arogya has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Parivar Arogya 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 Parivar Arogya in the sector have low bargaining power. Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Parivar Arogya to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Parivar Arogya is one of the leading recruiters in the industry. Managers in the Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Parivar Arogya in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Parivar Arogya has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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.
Effective Research and Development (R&D)
– Parivar Arogya 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India firm has clearly differentiated products in the market place. This has enabled Parivar Arogya to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Parivar Arogya to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Parivar Arogya 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Parivar Arogya digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Parivar Arogya 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.
Operational resilience
– The operational resilience strategy in the Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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.
Analytics focus
– Parivar Arogya 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 Amitava Chattopadhyay, Jean Wee, Anuj Pasrjia, Olivier Jarry 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.
Weaknesses Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India are -
Low market penetration in new markets
– Outside its home market of Parivar Arogya, firm in the HBR case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Parivar Arogya 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 operating costs
– Compare to the competitors, firm in the HBR case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Parivar Arogya 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Parivar Arogya is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Parivar Arogya 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India, in the dynamic environment Parivar Arogya has struggled to respond to the nimble upstart competition. Parivar Arogya has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Parivar Arogya 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India, is just above the industry average. Parivar Arogya 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Parivar Arogya 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 Parivar Arogya is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Parivar Arogya needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Parivar Arogya to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India HBR case study mentions - Parivar Arogya 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.
Opportunities Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India | 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India are -
Manufacturing automation
– Parivar Arogya 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.
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 Parivar Arogya in the consumer business. Now Parivar Arogya can target international markets with far fewer capital restrictions requirements than the existing system.
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. Parivar Arogya 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. Parivar Arogya 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Parivar Arogya can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Parivar Arogya 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Parivar Arogya 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 Parivar Arogya 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Parivar Arogya is facing challenges because of the dominance of functional experts in the organization. Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Parivar Arogya can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Parivar Arogya can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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.
Learning at scale
– Online learning technologies has now opened space for Parivar Arogya 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Parivar Arogya 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.
Developing new processes and practices
– Parivar Arogya 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.
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 Parivar Arogya to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Parivar Arogya 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India .
Consumer confidence and its impact on Parivar Arogya 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.
Increasing wage structure of Parivar Arogya
– 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 Parivar Arogya.
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.
Stagnating economy with rate increase
– Parivar Arogya 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.
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.
Shortening product life cycle
– it is one of the major threat that Parivar Arogya is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Parivar Arogya.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Parivar Arogya will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Parivar Arogya with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Parivar Arogya 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India, Parivar Arogya 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 .
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. Parivar Arogya can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Parivar Arogya needs to make to build a sustainable competitive advantage.