Abiomed and the AbioCor Clinical Trials (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Abiomed and the AbioCor Clinical Trials (A)

To protect patient confidentiality, Abiomed, makers of the AbioCor artificial heart, adopt a 30-day "quiet period" surrounding implantations, which is construed by mainstream media as a "news blackout." In late 2002, James Quinn, the fifth transplant recipient, dies after 289 days. A month later, in a New York Times article describing Quinn's pain and suffering, Quinn's widow claims that her husband had not been adequately informed of the likely ordeal. This case raises issues about transparency and communication with stakeholders. The A-case may lead some students to focus on the public sensationalism surrounding the Quinn story, but a closer examination of the case reveals that the more urgent issue for AbioMed is getting the stalled clinical trial back on track and bouying a slumping stock price. The B-case provides a detailed epilogue, including reactions to the Quinns' informed consent lawsuit and AbioMed's handling of the on-going clinical trial and investor relations.

Authors :: Elizabeth A. Powell, Rebecca O. Goldberg

Topics :: Technology & Operations

Tags :: Crisis management, Ethics, Public relations, Research & development, Transparency, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Abiomed and the AbioCor Clinical Trials (A)" written by Elizabeth A. Powell, Rebecca O. Goldberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abiomed Abiocor facing as an external strategic factors. Some of the topics covered in Abiomed and the AbioCor Clinical Trials (A) case study are - Strategic Management Strategies, Crisis management, Ethics, Public relations, Research & development, Transparency and Technology & Operations.

Some of the macro environment factors that can be used to understand the Abiomed and the AbioCor Clinical Trials (A) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, technology disruption, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Abiomed and the AbioCor Clinical Trials (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Abiomed and the AbioCor Clinical Trials (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abiomed Abiocor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abiomed Abiocor 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Abiomed and the AbioCor Clinical Trials (A) can be done for the following purposes –
1. Strategic planning using facts provided in Abiomed and the AbioCor Clinical Trials (A) case study
2. Improving business portfolio management of Abiomed Abiocor
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 Abiomed Abiocor

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Strengths Abiomed and the AbioCor Clinical Trials (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Abiomed Abiocor in Abiomed and the AbioCor Clinical Trials (A) Harvard Business Review case study are -

Strong track record of project management

– Abiomed Abiocor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High switching costs

– The high switching costs that Abiomed Abiocor 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.

Sustainable margins compare to other players in Technology & Operations industry

– Abiomed and the AbioCor Clinical Trials (A) firm has clearly differentiated products in the market place. This has enabled Abiomed Abiocor to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Abiomed Abiocor to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Abiomed Abiocor is present in almost all the verticals within the industry. This has provided firm in Abiomed and the AbioCor Clinical Trials (A) 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.

Digital Transformation in Technology & Operations segment

- digital transformation varies from industry to industry. For Abiomed Abiocor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abiomed Abiocor 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.

Highly skilled collaborators

– Abiomed Abiocor 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 Abiomed and the AbioCor Clinical Trials (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

High brand equity

– Abiomed Abiocor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abiomed Abiocor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Abiomed Abiocor 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 Abiomed Abiocor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Abiomed and the AbioCor Clinical Trials (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– Abiomed Abiocor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abiomed Abiocor 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 Abiomed Abiocor in the sector have low bargaining power. Abiomed and the AbioCor Clinical Trials (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abiomed Abiocor to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of Abiomed Abiocor 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

– Abiomed Abiocor 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 Abiomed Abiocor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses Abiomed and the AbioCor Clinical Trials (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Abiomed and the AbioCor Clinical Trials (A) are -

Skills based hiring

– The stress on hiring functional specialists at Abiomed Abiocor 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.

Increasing silos among functional specialists

– The organizational structure of Abiomed Abiocor is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Abiomed Abiocor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abiomed Abiocor to focus more on services rather than just following the product oriented approach.

Low market penetration in new markets

– Outside its home market of Abiomed Abiocor, firm in the HBR case study Abiomed and the AbioCor Clinical Trials (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, Abiomed Abiocor 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Abiomed and the AbioCor Clinical Trials (A), it seems that the employees of Abiomed Abiocor 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abiomed Abiocor is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Abiomed and the AbioCor Clinical Trials (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Slow decision making process

– As mentioned earlier in the report, Abiomed Abiocor 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. Abiomed Abiocor 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.

Need for greater diversity

– Abiomed Abiocor 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.

Lack of clear differentiation of Abiomed Abiocor products

– To increase the profitability and margins on the products, Abiomed Abiocor needs to provide more differentiated products than what it is currently offering in the marketplace.

Aligning sales with marketing

– It come across in the case study Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed and the AbioCor Clinical Trials (A) can leverage the sales team experience to cultivate customer relationships as Abiomed Abiocor 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 Abiomed and the AbioCor Clinical Trials (A), in the dynamic environment Abiomed Abiocor has struggled to respond to the nimble upstart competition. Abiomed Abiocor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Opportunities Abiomed and the AbioCor Clinical Trials (A) | 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 Abiomed and the AbioCor Clinical Trials (A) are -

Leveraging digital technologies

– Abiomed Abiocor 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.

Loyalty marketing

– Abiomed Abiocor 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.

Better consumer reach

– The expansion of the 5G network will help Abiomed Abiocor to increase its market reach. Abiomed Abiocor 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.

Manufacturing automation

– Abiomed Abiocor can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Abiomed Abiocor 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, Abiomed and the AbioCor Clinical Trials (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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. Abiomed Abiocor 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. Abiomed Abiocor 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abiomed Abiocor 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 Abiomed Abiocor to hire the very best people irrespective of their geographical location.

Low interest rates

– Even though inflation is raising its head in most developed economies, Abiomed Abiocor 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.

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 Abiomed Abiocor 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, Abiomed Abiocor is facing challenges because of the dominance of functional experts in the organization. Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed Abiocor in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.

Using analytics as competitive advantage

– Abiomed Abiocor 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 Abiomed and the AbioCor Clinical Trials (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abiomed Abiocor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abiomed Abiocor can use these opportunities to build new business models that can help the communities that Abiomed Abiocor operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.

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Threats Abiomed and the AbioCor Clinical Trials (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Abiomed and the AbioCor Clinical Trials (A) are -

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.

Consumer confidence and its impact on Abiomed Abiocor 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.

Environmental challenges

– Abiomed Abiocor 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. Abiomed Abiocor can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.

High dependence on third party suppliers

– Abiomed Abiocor 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.

Easy access to finance

– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abiomed Abiocor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Abiomed Abiocor 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.

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 Abiomed Abiocor business can come under increasing regulations regarding data privacy, data security, 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 Abiomed Abiocor.

Technology acceleration in Forth Industrial Revolution

– Abiomed Abiocor has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Abiomed Abiocor needs to keep up with the evolution of technology in the Technology & Operations 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Abiomed and the AbioCor Clinical Trials (A), Abiomed Abiocor 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 .

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 Abiomed Abiocor is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Abiomed Abiocor 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 Abiomed and the AbioCor Clinical Trials (A) .

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Weighted SWOT Analysis of Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed and the AbioCor Clinical Trials (A) 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 Abiomed Abiocor needs to make to build a sustainable competitive advantage.

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