Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists
This suite of cases begins with an overview of a promising alliance between a multinational Swiss pharmaceuticals firm and a start-up with cutting-edge technology in drug delivery systems. At the end of the case, the alliance has slid into crisis. In the six B caselets, three stakeholder groups from each partner in the alliance prepare to advance their visions of how it should continue - or end.
Authors :: Reinhard Angelmar, Mark Hunter, Yves L. Doz
Swot Analysis of "Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists" written by Reinhard Angelmar, Mark Hunter, Yves L. Doz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alliance Alza's facing as an external strategic factors. Some of the topics covered in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists case study are - Strategic Management Strategies, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, technology disruption, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alliance Alza's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alliance Alza's 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists can be done for the following purposes –
1. Strategic planning using facts provided in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists case study
2. Improving business portfolio management of Alliance Alza's
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 Alliance Alza's
Strengths Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alliance Alza's in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Alliance Alza's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Alliance Alza's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alliance Alza's 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.
Diverse revenue streams
– Alliance Alza's is present in almost all the verticals within the industry. This has provided firm in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists firm has clearly differentiated products in the market place. This has enabled Alliance Alza's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Alliance Alza's to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Alliance Alza's 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.
Organizational Resilience of Alliance Alza's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alliance Alza's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Alliance Alza's in the sector have low bargaining power. Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alliance Alza's to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Alliance Alza's 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.
Learning organization
- Alliance Alza's 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 Alliance Alza's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Alliance Alza's 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 Alliance Alza's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Alliance Alza's 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Alliance Alza's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alliance Alza's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists are -
Skills based hiring
– The stress on hiring functional specialists at Alliance Alza's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alliance Alza's 's lucrative customers.
Interest costs
– Compare to the competition, Alliance Alza's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists, in the dynamic environment Alliance Alza's has struggled to respond to the nimble upstart competition. Alliance Alza's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists HBR case study mentions - Alliance Alza's 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.
Low market penetration in new markets
– Outside its home market of Alliance Alza's, firm in the HBR case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Alliance Alza's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Alliance Alza's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alliance Alza's to focus more on services rather than just following the product oriented approach.
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 Alliance Alza's supply chain. Even after few cautionary changes mentioned in the HBR case study - Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alliance Alza's vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists can leverage the sales team experience to cultivate customer relationships as Alliance Alza's is planning to shift buying processes online.
Products dominated business model
– Even though Alliance Alza's 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 - Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists, is just above the industry average. Alliance Alza's 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.
Opportunities Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists | 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists are -
Loyalty marketing
– Alliance Alza's 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.
Developing new processes and practices
– Alliance Alza's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alliance Alza's 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 Alliance Alza's to hire the very best people irrespective of their geographical location.
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. Alliance Alza's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alliance Alza's can use these opportunities to build new business models that can help the communities that Alliance Alza's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Alliance Alza's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alliance Alza's is facing challenges because of the dominance of functional experts in the organization. Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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.
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. Alliance Alza's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Alliance Alza's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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.
Creating value in data economy
– The success of analytics program of Alliance Alza's has opened avenues for new revenue streams for the organization in the industry. This can help Alliance Alza's to build a more holistic ecosystem as suggested in the Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists case study. Alliance Alza's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Alliance Alza's 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.
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. Alliance Alza's 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. Alliance Alza's 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.
Building a culture of innovation
– managers at Alliance Alza's 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.
Threats Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists are -
Shortening product life cycle
– it is one of the major threat that Alliance Alza's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Alliance Alza's
– 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 Alliance Alza's.
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. Alliance Alza's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Alliance Alza's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alliance Alza's 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.
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 Alliance Alza's in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Alliance Alza's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists, Alliance Alza's 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 .
Environmental challenges
– Alliance Alza's 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. Alliance Alza's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Alliance Alza's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Alliance Alza's 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.
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. Alliance Alza's 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.
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.
Consumer confidence and its impact on Alliance Alza's 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.
Weighted SWOT Analysis of Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alza and Ciba-Geigy: Renewing the Collaboration? (B6): ALZA's Scientists 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 Alliance Alza's needs to make to build a sustainable competitive advantage.
