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 - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, increasing commodity prices, 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 -
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.
Highly skilled collaborators
– Parivar Arogya 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Strong track record of project management
– Parivar Arogya is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Parivar Arogya 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 Parivar Arogya is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
High brand equity
– Parivar Arogya has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Parivar Arogya to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Parivar Arogya 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.
Products dominated business model
– Even though Parivar Arogya has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Parivar Arogya products
– To increase the profitability and margins on the products, Parivar Arogya needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India, it seems that the employees of Parivar Arogya don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Amitava Chattopadhyay, Jean Wee, Anuj Pasrjia, Olivier Jarry suggests that, Parivar Arogya 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.
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.
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.
Interest costs
– Compare to the competition, Parivar Arogya 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.
Aligning sales with marketing
– It come across in the case study Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India can leverage the sales team experience to cultivate customer relationships as Parivar Arogya is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Parivar Arogya 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. Parivar Arogya even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India 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 Parivar Arogya has relatively successful track record of launching new products.
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 -
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.
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.
Creating value in data economy
– The success of analytics program of Parivar Arogya has opened avenues for new revenue streams for the organization in the industry. This can help Parivar Arogya to build a more holistic ecosystem as suggested in the Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India case study. Parivar Arogya can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Parivar Arogya to increase its market reach. Parivar Arogya will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at 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.
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.
Loyalty marketing
– Parivar Arogya 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Parivar Arogya 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, Arogya Parivar: Novartis' BOP Strategy for Healthcare in Rural India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Parivar Arogya 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.
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 -
Regulatory challenges
– Parivar Arogya 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.
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 Parivar Arogya in the Strategy & Execution sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Parivar Arogya 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.
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.
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.
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.
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.
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.
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.
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.
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. Parivar Arogya needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.