Eli Lilly and Co.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993
In 1993, Eli Lilly is preparing to build manufacturing capacity for three new pharmaceutical products that it expects to launch in 1996. Management wrestles with a decision of whether to add specialized manufacturing capacity or flexible capacity. This question touches off a broad debate within the company about which strategy to follow for future facilities decisions. This case presents two alternatives (flexible and specialized plants) and describes the benefits and costs associated with each.
Swot Analysis of "Eli Lilly and Co.: The Flexible Facility Decision--1993" written by Gary P. Pisano, Sharon Rossi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Flexible Eli facing as an external strategic factors. Some of the topics covered in Eli Lilly and Co.: The Flexible Facility Decision--1993 case study are - Strategic Management Strategies, Costs, Decision making, Manufacturing, Product development and Technology & Operations.
Some of the macro environment factors that can be used to understand the Eli Lilly and Co.: The Flexible Facility Decision--1993 casestudy better are - – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Eli Lilly and Co.: The Flexible Facility Decision--1993
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eli Lilly and Co.: The Flexible Facility Decision--1993 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flexible Eli, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flexible 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.: The Flexible Facility Decision--1993 can be done for the following purposes –
1. Strategic planning using facts provided in Eli Lilly and Co.: The Flexible Facility Decision--1993 case study
2. Improving business portfolio management of Flexible 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 Flexible Eli
Strengths Eli Lilly and Co.: The Flexible Facility Decision--1993 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flexible Eli in Eli Lilly and Co.: The Flexible Facility Decision--1993 Harvard Business Review case study are -
Ability to recruit top talent
– Flexible Eli is one of the leading recruiters in the industry. Managers in the Eli Lilly and Co.: The Flexible Facility Decision--1993 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Flexible Eli in the sector have low bargaining power. Eli Lilly and Co.: The Flexible Facility Decision--1993 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Flexible Eli to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Flexible Eli
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Flexible Eli does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Flexible Eli is one of the most innovative firm in sector. Manager in Eli Lilly and Co.: The Flexible Facility Decision--1993 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Flexible Eli is present in almost all the verticals within the industry. This has provided firm in Eli Lilly and Co.: The Flexible Facility Decision--1993 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.
Learning organization
- Flexible Eli 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 Flexible Eli is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eli Lilly and Co.: The Flexible Facility Decision--1993 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Flexible Eli 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 Eli Lilly and Co.: The Flexible Facility Decision--1993 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Flexible 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.: The Flexible Facility Decision--1993 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.
Successful track record of launching new products
– Flexible Eli has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Flexible 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.
Strong track record of project management
– Flexible Eli is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Flexible 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 Gary P. Pisano, Sharon Rossi 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.
Operational resilience
– The operational resilience strategy in the Eli Lilly and Co.: The Flexible Facility Decision--1993 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.
Weaknesses Eli Lilly and Co.: The Flexible Facility Decision--1993 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eli Lilly and Co.: The Flexible Facility Decision--1993 are -
Products dominated business model
– Even though Flexible Eli 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 - Eli Lilly and Co.: The Flexible Facility Decision--1993 should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Flexible Eli 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gary P. Pisano, Sharon Rossi suggests that, Flexible 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Flexible Eli is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Eli Lilly and Co.: The Flexible Facility Decision--1993 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
Flexible Eli 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Flexible Eli needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Flexible Eli supply chain. Even after few cautionary changes mentioned in the HBR case study - Eli Lilly and Co.: The Flexible Facility Decision--1993, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Flexible Eli vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eli Lilly and Co.: The Flexible Facility Decision--1993, it seems that the employees of Flexible 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Eli Lilly and Co.: The Flexible Facility Decision--1993 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 Flexible Eli 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Flexible Eli is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Flexible Eli needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Flexible Eli to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Flexible 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.
Opportunities Eli Lilly and Co.: The Flexible Facility Decision--1993 | 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.: The Flexible Facility Decision--1993 are -
Learning at scale
– Online learning technologies has now opened space for Flexible Eli 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. Flexible Eli can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Flexible Eli 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Flexible Eli 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 Flexible Eli to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Flexible 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.: The Flexible Facility Decision--1993 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Flexible Eli to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Flexible 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. Flexible 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Flexible Eli can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Flexible Eli can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Flexible Eli to increase its market reach. Flexible 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Flexible 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.: The Flexible Facility Decision--1993, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Flexible Eli has opened avenues for new revenue streams for the organization in the industry. This can help Flexible Eli to build a more holistic ecosystem as suggested in the Eli Lilly and Co.: The Flexible Facility Decision--1993 case study. Flexible Eli can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Flexible 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.
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 Flexible Eli in the consumer business. Now Flexible Eli can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Eli Lilly and Co.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993 are -
Consumer confidence and its impact on Flexible 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.
Shortening product life cycle
– it is one of the major threat that Flexible Eli is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.: The Flexible Facility Decision--1993, Flexible 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 Flexible Eli business can come under increasing regulations regarding data privacy, data security, etc.
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. Flexible 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.
Stagnating economy with rate increase
– Flexible 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Flexible Eli 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 Eli Lilly and Co.: The Flexible Facility Decision--1993 .
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.
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 Flexible Eli in the Technology & Operations sector and impact the bottomline of the organization.
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 Flexible Eli.
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. Flexible Eli needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Flexible Eli with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Eli Lilly and Co.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993 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.: The Flexible Facility Decision--1993 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 Flexible Eli needs to make to build a sustainable competitive advantage.
