Eli Lilly and Co.: Innovation in Diabetes Care SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Eli Lilly and Co.: Innovation in Diabetes Care
Summarizes Eli Lilly's history of innovation in its business, describing how the dimensions along which innovations have been made in the industry have changed. Lilly's innovation strategy has been to pursue ever higher performance products, while others in the industry have pursued more convenient products. At the time of the case, Lilly is contemplating offering services, not just products, to diabetic patients.
Swot Analysis of "Eli Lilly and Co.: Innovation in Diabetes Care" written by Clayton M. Christensen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lilly's Eli facing as an external strategic factors. Some of the topics covered in Eli Lilly and Co.: Innovation in Diabetes Care case study are - Strategic Management Strategies, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Eli Lilly and Co.: Innovation in Diabetes Care casestudy better are - – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, technology disruption, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Eli Lilly and Co.: Innovation in Diabetes Care
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eli Lilly and Co.: Innovation in Diabetes Care case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lilly's Eli, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lilly's Eli 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 Eli Lilly and Co.: Innovation in Diabetes Care can be done for the following purposes –
1. Strategic planning using facts provided in Eli Lilly and Co.: Innovation in Diabetes Care case study
2. Improving business portfolio management of Lilly's Eli
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lilly's Eli
Strengths Eli Lilly and Co.: Innovation in Diabetes Care | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lilly's Eli in Eli Lilly and Co.: Innovation in Diabetes Care Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Lilly's Eli in the sector have low bargaining power. Eli Lilly and Co.: Innovation in Diabetes Care has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lilly's Eli to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Lilly's Eli has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eli Lilly and Co.: Innovation in Diabetes Care 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.
High brand equity
– Lilly's Eli has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lilly's Eli to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Lilly's Eli 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.
Superior customer experience
– The customer experience strategy of Lilly's Eli in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Technology & Operations field
– Lilly's Eli 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 Lilly's Eli in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Lilly's Eli is one of the most innovative firm in sector. Manager in Eli Lilly and Co.: Innovation in Diabetes Care Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Lilly's Eli 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 Eli Lilly and Co.: Innovation in Diabetes Care - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Lilly's Eli has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lilly's Eli 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.
Organizational Resilience of Lilly's Eli
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lilly's Eli does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Lilly's Eli 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 Clayton M. Christensen 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.
Sustainable margins compare to other players in Technology & Operations industry
– Eli Lilly and Co.: Innovation in Diabetes Care firm has clearly differentiated products in the market place. This has enabled Lilly's Eli to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Lilly's Eli to invest into research and development (R&D) and innovation.
Weaknesses Eli Lilly and Co.: Innovation in Diabetes Care | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eli Lilly and Co.: Innovation in Diabetes Care are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Eli Lilly and Co.: Innovation in Diabetes Care 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 Lilly's Eli has relatively successful track record of launching new products.
Need for greater diversity
– Lilly's Eli 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.
Slow to strategic competitive environment developments
– As Eli Lilly and Co.: Innovation in Diabetes Care HBR case study mentions - Lilly's Eli takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Clayton M. Christensen suggests that, Lilly's Eli 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Eli Lilly and Co.: Innovation in Diabetes Care 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 Lilly's Eli 's lucrative customers.
Interest costs
– Compare to the competition, Lilly's Eli 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 Eli Lilly and Co.: Innovation in Diabetes Care 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 Eli Lilly and Co.: Innovation in Diabetes Care can leverage the sales team experience to cultivate customer relationships as Lilly's Eli is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Eli Lilly and Co.: Innovation in Diabetes Care, in the dynamic environment Lilly's Eli has struggled to respond to the nimble upstart competition. Lilly's Eli has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Lilly's Eli, firm in the HBR case study Eli Lilly and Co.: Innovation in Diabetes Care needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Lilly's Eli 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eli Lilly and Co.: Innovation in Diabetes Care, it seems that the employees of Lilly's Eli 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.
Opportunities Eli Lilly and Co.: Innovation in Diabetes Care | 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 Eli Lilly and Co.: Innovation in Diabetes Care are -
Better consumer reach
– The expansion of the 5G network will help Lilly's Eli to increase its market reach. Lilly's Eli 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.
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. Lilly's Eli can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lilly's Eli 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, Eli Lilly and Co.: Innovation in Diabetes Care, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lilly's Eli 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.
Building a culture of innovation
– managers at Lilly's Eli 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 Technology & Operations segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lilly's Eli 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. Lilly's Eli 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Lilly's Eli can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lilly's Eli can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lilly's Eli is facing challenges because of the dominance of functional experts in the organization. Eli Lilly and Co.: Innovation in Diabetes Care 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.
Developing new processes and practices
– Lilly's Eli can develop new processes and procedures in Technology & Operations 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.
Using analytics as competitive advantage
– Lilly's Eli 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 Eli Lilly and Co.: Innovation in Diabetes Care - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lilly's Eli to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Lilly's Eli in the consumer business. Now Lilly's Eli can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Lilly's Eli can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Eli Lilly and Co.: Innovation in Diabetes Care External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eli Lilly and Co.: Innovation in Diabetes Care are -
High dependence on third party suppliers
– Lilly's Eli high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology 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.
Shortening product life cycle
– it is one of the major threat that Lilly's Eli is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Lilly's Eli 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 Technology & Operations industry regulations.
Environmental challenges
– Lilly's Eli 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. Lilly's Eli can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Lilly's Eli.
Increasing wage structure of Lilly's Eli
– 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 Lilly's Eli.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Eli Lilly and Co.: Innovation in Diabetes Care, Lilly's Eli may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Lilly's Eli business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Lilly's Eli 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.
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. Lilly's Eli 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.
Consumer confidence and its impact on Lilly's Eli 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.
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 Lilly's Eli in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Eli Lilly and Co.: Innovation in Diabetes Care 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 Eli Lilly and Co.: Innovation in Diabetes Care 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 Eli Lilly and Co.: Innovation in Diabetes Care 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 Eli Lilly and Co.: Innovation in Diabetes Care 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 Eli Lilly and Co.: Innovation in Diabetes Care 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 Lilly's Eli needs to make to build a sustainable competitive advantage.