Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan
Pharmaceutical company Merck had created the U.S. Managed Distribution Team to handle a unique problem. In March, 1996, the U.S. Food and Drug Administration (FDA) had approved Merck's new drug application for Crixivan, a novel antiviral drug to fight acquired immunodeficiency syndrome (AIDS). Driven by positive early data from the clinical studies, a tremendous medical need for new human immunodeficiency virus (HIV) treatments, and the demands of AIDS activists to make new medicines available as quickly as possible, the FDA had approved Merck's application in a record-setting 42 days from submission. Since Merck's manufacturing facilities would not be ready to produce the drug at capacity for at least six months, a small pilot plant facility would immediately supply Crixivan for an estimated 25,000 to 30,000 patients. Propelled by the need to make Crixivan quickly available, but concerned about ensuring a continuous supply to individual patients so that immune resistance to the drug would not develop as a result of insufficient dosage, the team had grappled with the issue of how to distribute a drug in limited supply. The worst situation would be to start patients on therapy only to discontinue treatment because Merck could not continue to supply the drug. Such a situation was a setup for the emergence of viral resistance, which would markedly exacerbate the AIDS epidemic. After much consideration, the U.S. Managed Distribution Team decided to: (1) abandon traditional distribution channels; (2) manage distribution from one source; and (3) track all patients starting on therapy with Crixivan. The team had gathered to review the progress and success of its plan.
Authors :: Margaret L. Eaton, Madhi Roy, Marko Curavic
Swot Analysis of "Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan" written by Margaret L. Eaton, Madhi Roy, Marko Curavic includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crixivan Drug facing as an external strategic factors. Some of the topics covered in Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan case study are - Strategic Management Strategies, Marketing, Policy, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing commodity prices, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crixivan Drug, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan can be done for the following purposes –
1. Strategic planning using facts provided in Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan case study
2. Improving business portfolio management of Crixivan Drug
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 Crixivan Drug
Strengths Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crixivan Drug in Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan Harvard Business Review case study are -
Analytics focus
– Crixivan Drug 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 Margaret L. Eaton, Madhi Roy, Marko Curavic 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.
Superior customer experience
– The customer experience strategy of Crixivan Drug in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Crixivan Drug has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crixivan Drug 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.
Operational resilience
– The operational resilience strategy in the Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of Crixivan Drug
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crixivan Drug does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Crixivan Drug is one of the leading recruiters in the industry. Managers in the Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Technology & Operations field
– Crixivan Drug 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 Crixivan Drug in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Crixivan Drug digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Crixivan Drug 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.
Training and development
– Crixivan Drug has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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.
Sustainable margins compare to other players in Technology & Operations industry
– Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan firm has clearly differentiated products in the market place. This has enabled Crixivan Drug to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Crixivan Drug to invest into research and development (R&D) and innovation.
High brand equity
– Crixivan Drug has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crixivan Drug to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan are -
Capital Spending Reduction
– Even during the low interest decade, Crixivan Drug has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Crixivan Drug is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Crixivan Drug needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Crixivan Drug to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Crixivan Drug 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 - Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Crixivan Drug 's lucrative customers.
Lack of clear differentiation of Crixivan Drug products
– To increase the profitability and margins on the products, Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan can leverage the sales team experience to cultivate customer relationships as Crixivan Drug is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crixivan Drug is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Crixivan Drug has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Crixivan Drug, firm in the HBR case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan HBR case study mentions - Crixivan Drug takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan | 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan are -
Building a culture of innovation
– managers at Crixivan Drug 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.
Better consumer reach
– The expansion of the 5G network will help Crixivan Drug to increase its market reach. Crixivan Drug 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Crixivan Drug 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, Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crixivan Drug can use these opportunities to build new business models that can help the communities that Crixivan Drug operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Using analytics as competitive advantage
– Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Crixivan Drug to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crixivan Drug is facing challenges because of the dominance of functional experts in the organization. Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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.
Manufacturing automation
– Crixivan Drug 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crixivan Drug 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.
Creating value in data economy
– The success of analytics program of Crixivan Drug has opened avenues for new revenue streams for the organization in the industry. This can help Crixivan Drug to build a more holistic ecosystem as suggested in the Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan case study. Crixivan Drug can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Crixivan Drug to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Crixivan Drug can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Crixivan Drug in the consumer business. Now Crixivan Drug can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crixivan Drug 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. Crixivan Drug 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.
Threats Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan are -
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. Crixivan Drug 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.
Shortening product life cycle
– it is one of the major threat that Crixivan Drug is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan, Crixivan Drug 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 .
High dependence on third party suppliers
– Crixivan Drug 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.
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 Crixivan Drug business can come under increasing regulations regarding data privacy, data security, etc.
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. Crixivan Drug can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crixivan Drug in the Technology & Operations industry. The Technology & Operations 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.
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. Crixivan Drug needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan .
Technology acceleration in Forth Industrial Revolution
– Crixivan Drug has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Crixivan Drug 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.
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 Crixivan Drug.
Consumer confidence and its impact on Crixivan Drug 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Merck's U.S. Managed Distribution Program for the HIV Drug Crixivan 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 Crixivan Drug needs to make to build a sustainable competitive advantage.
